Good news, people: The “boom” is back! Good times are here again, thanks to an economic boom generated by (of all things) bad times.
Tens of millions of Americans have been knocked down and held down in recent years by the collapse of jobs and wages. This calamity has led to a second blow for millions of the same families who now find themselves buried in overdue bills for credit card charges, student loans, and other consumer debt.
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But there’s a bright silver lining in that dark financial cloud. Only, it’s not for the indebted families, but for a booming breed of finance hucksters known as consumer debt buyers. Believe it or not, in the warped world of high finance, “There’s gold in them thar hills” of bad debt.
Such miners of human misery as Encore Capital Group buy bales of unpaid bills from banks and other lenders, paying pennies on the dollar. Then they unlash packs of their hard-nosed, aggressive collectors on the families. If they still can’t extract payment, the debt profiteers turn to their meanest dog: The courts.
Debt firms routinely file thousands of lawsuits a day against financially-devastated Americans. They know that most debtors can’t understand the legal gibberish in the suits, can’t afford a lawyer, and can’t mount an effective defense against the corporate lawyers. So, some 95 percent of these lawsuits produce default judgments against hapless borrowers – meaning debt buyers can then confiscate the wages of borrowers or freeze their bank accounts.
This boom in vulture capitalism is disgusting – but, worse, it’s subsidized by us taxpayers! We pay for that judicial system – the judges, courtrooms, and endless rounds of hearings. Predatory debt corporations have perverted our so-called justice system into their own subsidiary for squeezing profits out of destitute debtors.
“Debt Buyer Faces Fine In Doubtful Lawsuits,” The New York Times, January 9, 2015.