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Debt Collectors: Billions From Other Peoples Money


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The Castle Law Office is a St. Louis-based law firm that helps those who are considering bankruptcy. Our bankruptcy attorneys have years of experience helping St. Louis Citizens through the bankruptcy process. If you or a loved one are considering bankruptcy, contact the Castle Law Group for a free legal consultation today.

 

Would you like to make millions of dollars? Maybe even hundreds of millions of dollars? How about a cool billion?

 Would you like to start a business with extremely low overhead that will give you returns of over 100% on your initial investment?

If you are thinking that this sounds too good to be true, you are wrong. In 2005, fifteen companies earned over $3 billion in revenue, with many of them doing so with the bare minimum of expenditure on employees. In fact, of those fifteen companies, the one that made the most money outsourced the work entirely.

All of this profit and ease of business can be yours for a small investment, as long as you are willing to constantly hound people with phone calls, make a bargain with your conscience, and put those that are in financial trouble even deeper in the hole.

Welcome to the world of professional debt collecting.

 

How It Works

 

Many of us have been on the receiving end of phone calls from collection agencies. We are usually so flustered and irritated by the call that we automatically assume that the call is coming from the bank, or the electric company, or the credit card company, or the hospital. In fact, if you are receiving a call from a collection agency, you can assume that the people that you owe money to gave up on you a long time ago.

Creditors who get tired of waiting for their money cut their losses. Unfortunately for us, this doesn’t mean that they forget about the debt and decide to let us off the hook. What it means is that they sell the debt to another company. Sometimes they sell it for as little as pennies on the dollar. This is their way of getting at least some money out of the deal.

The company that buys the debt now has the right to collect the full amount of the loan. If they are successful in collecting the money, they see a substantial return on their purchase of your loan from the original creditor. So if you’ve noticed a sudden increase in the amount of calls and also a sudden drop in the level of civility of the callers, it’s because your debt has been handed over to someone who has no need to worry about maintaining a customer relationship.

 

The Big Players

 

Make no mistake about it: Debt Collection is big business. The investment is small compared to the possible returns, and the overhead costs are low. All you need are debts to buy and people willing to work the phones and mail the invoices. They even have their own trade website, which markets itself as “The Online Resource for Commercial and Consumer Credit Professionals.”

One article on this website that was particularly interesting to us was a list of the top fifteen most profitable debt buyers of 2005. As you can tell from the listing, these companies are making obscene profits with hardly any overhead at all.

According to its website, Sherman Financial specializes in “…debt recovery solutions for financial institutions, credit card companies, retailers and others.” Their big earner is, obviously, credit card debt. What we find interesting is that Sherman Financial made all of this money without actually having to do any collections. The company simply purchases and resells delinquent unsecured assets such as credit card receivables, student loans, auto deficiencies, and bankruptcy debt. It’s a very simple recipe of “buy low, sell high.” This isn’t a rare occurrence in the debt buying business.  Both the NCO Group and New Century Financial also earn millions by buying debts and then reselling them to smaller collection agencies.

Other companies, such as Asset Acceptance and Cavalry Portfolio keep their collections in house, which means that their overhead is a little higher, but the end result is still profits in the hundreds of millions.

Since the profit margins with these businesses are tremendous, there is a huge incentive to get the money from the debtors as quickly as possible. This means that both the debt buyers and the collection agencies are under pressure to collect. While they have a right to collect the money that they are owed, they don’t have the right to make threats, hound you day and night, or insult and berate you.

 

Castle Law Office: Attorneys Helping St. Louis Through Bankruptcy and Debt Collection Abuse 

The recent subprime crash brought home to many Americans exactly how precarious our financial situation is. Many of us know that all it takes is one injury or illness to ruin us financially. Too many of us are just a few paychecks away from bankruptcy. We are stretched thin.

The fact that there are those who are profiting so immensely on the financial misery of others is frustrating, but if you do find yourself on the verge of ruin, you do have options. In St. Louis, your first call should be to the Castle Law Group.

We have years of experience in helping people through the bankruptcy process, and we also defend those who have suffered from abuse and heavy handed tactics from debt collectors.

Contact the Castle Law Group for a free legal consultation today.

 

 

 

 

 

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