Junk Debt Collection Agencies

Junk debt buyers are a growing industry. Their purpose for existence is to purchase bad credit card accounts from creditors to collect on them and make a profit. Junk debt buyers are also referred to as bad debt buyers or simply debt buyers. The accounts purchased by these agencies range from auto loans to retail accounts. It is estimated that about 70% of the accounts often sold to junk debt buyers are credit card accounts. Junk debt collection agencies can often get delinquent accounts for only cents on the dollar. These are typically acquired through a bidding process.

A junk debt buyer may be one of two types of agencies. They may contract with a contingency agency or they may have a secondary contingency agency aside from the junk collection account business. Contingency collection agencies are third party entities that work for another company. Junk collection agencies are first party agencies. They are a new style of debt collection agencies that work for themselves and own the profits they make through collecting debts. They assume the rights of the original creditor once they purchase the debt. Once the junk debt buyers have paid a creditor to own the debt they work to find ways to turn a profit off of collecting the debt. Some have been very successful in spinning profits on debt. Profitable returns have resulted in millions of dollar returns for many of the junk debt agencies.

Debt collection practices are often questionable and subjective. Regulations that govern debt collectors have always been very loose and can vary from state to state. The FDCP has put out some general rules and regulations for all debt collectors that outline the basic governing principles of the practice. The way that these regulations are put into practice can vary considerably depending on the debt collection agency. The practices and tactics used to collect debt often walk the fine lines of legality, which can hold true with any business working for a profit.

The guidelines of the Fair Debt Collections Practices Act outline the perimeters and practices that are expected to be followed by any and all debt collection agency. There are many junk debt agencies that can be researched on the internet. Many of these better known junk collection agencies have been the subject of legal actions against them for questionable collection practices, illegal activities and a variety of code violations. It is not a secret that debt collectors are not viewed in a positive light by society in general because of the nature of their business.