Buffalo was once the sixth-largest city in America, and late in the 19th century, because of its proximity to hydro-electric power generation, it was known as 'The Electric City.' I knew it had fallen on hard times, but had no idea it had become the debt collection center of America. Thanks to this book, I've learned a few things about 'paper'. Good paper is sold by banks and other financial institutions to collection agencies. One would think that they would do what they could with the paper, wring out whatever was possible and then forget about it. Far from it. Those first tier collection agencies (monitored by the FTC) feel like Tiffany's compared to what happens later. After the paper is worked, incredibly, it is resold over and over to lower tier entities, where you get to the point that the chain-of-title has been corrupted. Buffalo's skilled players, many of whom have criminal records, call plead, threaten and mislead the debtors. Remarkably, good collectors can make up to $100,000 per year, although job security can be sketchy when the entity's owner is another ex-con scouring the netherworld for paper.
This era may be ending as the Great Recession threw a monkey-wrench in the never-ending expansion of credit, and entities like Chase have been so tarnished that they no longer sell paper. Also, the FTC and the new Consumer Protection Bureau are making it harder for many of these abuses to continue.
No comments:
Post a Comment