Tuesday, August 22, 2006

friggin incredible

"As I discussed in 'Zombie debt is hard to kill,' there is now a booming market in the pursuit of debts so ancient that they used to be considered uncollectible. This year a whopping $110 billion of such debt is expected to be sold to collection agencies, up from virtually nothing 10 years ago.
Because the old liabilities cost collectors as little as 25 cents for each $100 in face value, companies can make a profit if they can get debtors to repay even a tiny fraction. Along the way, some collectors realized they also could squeeze money from people who didn't even owe it.
Some consumers pay because their finances are so disorganized they don't realize the debt isn't theirs. Others are coerced into paying by illegal threats of lawsuits or ruined credit. Some, like Alappat, pay rather than risk losing a desired loan."

Because people aren't bad off enough?

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