Printer friendly | E-mail to a friend | Other Special Reports
  Pages: [1]  [2]  [3]  [4]  [5]  | [Part One]  [Part Two]  [Part Three] | Series homepage

The above feature requires the free Flash Player. If you cannot see the feature, please visit this website to download the latest version of Flash Player.

Regulators, policy makers seldom intervene

This story was reported by Spotlight team members Michael Rezendes, Beth Healy, Francie Latour, Heather Allen, and editor Walter V. Robinson. It was written by Robinson and Healy.

Last of four parts | August 2, 2006

The debt business, as Donald Friedman, the chief operating officer of debt-buyer Liberty Point Corp., told hundreds of his assembled peers at their March 2005 gathering, is ''one of the sexiest, one of the most financially lucrative businesses you can get into.''

Boastful? Yes. Overstated? Hardly.

That year, businesses that specialize in debt for collection would purchase $66 billion in delinquent bank credit card accounts alone, paying just pennies on the dollar for the right to press consumers to pay up. That $66 billion represented a golden opportunity for them, and sudden vulnerability for an estimated 8 million card holders - all of them earmarked for repeated phone calls, dunning letters, lawsuits, wage garnishment, property seizure, and sometimes even arrest.

They generally owe the money, but seldom anticipate the consequences. A Spotlight Team investigation, which concludes today, found a system where debt collectors have a lopsided advantage; where debtors frequently face high-handed treatment; and where excessive fees can swiftly turn a small delinquency into a life-upending
financial crisis.

 RELATED: Legislators also among collectors' targets
Pop-up GRAPHIC: A growing industry
Message Board MESSAGE BOARD: Post your thoughts on debt collection practices in the US, and tell us if you have had any encounters with debt collectors.
If you are interested in sharing your story with the Spotlight Team, just send an e-mail to

 DEBTORS' HELL PART 1: Preying on red-ink America
 DEBTORS' HELL PART 2: A court system compromised
 DEBTORS' HELL PART 3: Behind the badge

Yet, in spite of all this, there is an eerie silence among regulators, policy makers, and legislators. Those who could intervene to right the balance between collectors and consumers are either unaware of the debt collection free-for-all, and the tens of millions of consumers caught up in it. Or they are simply unwilling to act.

Printer friendly | E-mail to a friend | Other Special Reports
  Pages: [1]  [2]  [3]  [4]  [5]  | [Part One]  [Part Two]  [Part Three] | Series homepage