Monday, June 6, 2016

John Oliver Exposes Most Sleazy "Legal" Business Ever: Zombie Debt Collection

Many people years ago were unable to pay debts, mostly medical payments. The statutes of limitations have long since expired on these debts, so generally those people would no longer be responsible for paying the debt

Except for some sleazy, sleazy businesses, that are made legal by corrupt state legislatures, or not made illegal by corrupt state legislatures.

BoingBoing explains the debt thing well:

"The sums themselves are "zombie debts" --- debts that have been long written off and generally don't have to be paid, which are bought up by collection firms that terrorize their victims and embroil them in difficult-to-navigate litigation that must execute perfectly, or the debts are resurrected and collected through paycheck confiscation."

These sleazy companies buy these debts for fractions of a penny on the dollar, then go after their victim. So you can see they can make a lot of money terrorizing people of modest means who are definitely not financial lawyers.

It's an outrage, and should be illegal, but some discrete campaign contributions to lawmakers probably helps keep these things going.

John Oliver recently had a brilliant segment on this outrage, in which he revealed how some state legislatures actually made it easier for these zombie debt collection agencies to terrorize former debtors, and how they remove the assumption of innocense in the proceedings against the people they're going after.

He also went to a debt collector's conference and captured video of people in the industry joking about bullying victims and ruining their lives.

Yeah, that's such a barrel of laughs. Awful people.

Then Oliver did something brilliant. He formed his own debt collection agency just like the sleazes who terrorize people.

He calls his new company Central Asset Recovery Professionals, whose acronym is CARP named for the bottom feeder fish.

Oliver was able to form this corporation, based in Mississippi with just a $50 fee. The company consists of just a web site that has the CARP logo and that's it.

According to Consumerist:

"'With little more to go on than that website,' says Oliver, 'we were soon offered a portfolio of nearly $15 million of out-of-statue medical debt from Texas'

The asking price was less than $60,000 for $14,922,261.76 in this zombie debt - ir around $0.004 for every dollar of debt owed. Purchasing the debt would CARP the names, current addresses, Social Security numbers, and amount owed (or previously owed, as the statute of limitations had expired) for nearly 9,000 individuals."

Says Oliver:

"So we bought it, which is absolutely terrifying....because it means if I wanted to, I could legally have CARP take possession of that list and have employees start calling people, turning their lives upside down over medical debt they no longer had to pay.

There would be absolutely nothing wrong with that, except for the fact that absolutely everything is wrong with that."

Rather than calling people and houding them, Oliver took the money an organization called RIP Medical Debt, an organization of accountants and legal eagles that forgive the debts without tax repecussions for the would-be debtors.

Once RIP Medical Debt gets their hands on the zombie debts, they go away, never to rear their ugly heads again.

Since Oliver was able to spend just $60,000 to ditch $15 million in debt, I see a charitable opportunity here. Maybe some fairly rich philanthropists can form debt companies like Oliver did to funnel debts away from the sleazy debt collection agencies so they can't profit in such an evil way.

Here's John Oliver's segment.

It's amazing this a segment on medical debt that lasts 20 minutes and you can't stop watching it:

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