Debt Buyers: Last Week Tonight with John Oliver (HBO)

Det it's the reason Nicolas Cage has made so many great choices in recent years and presumably it's the fuel he uses to power performances like this one from his recent movie the trust he delivered that line like a child on PCP opening birthday presents which he clearly hopes are full of more PCP American households collectively owe over twelve trillion dollars in debt and right now 436 billion of that debt is seriously delinquent meaning it's 90 or more days past jus and it is not good when anything is that late if your baby were three months overdue you'll effectively just be giving birth to a floppy toddler look clearly if you have debts you should pay them if you can but many people can find themselves in debts for no direct fault of their own take Bob wine cough a few years ago he was in intensive care over breathing trouble and after four days of treatment the hospital told his wife that their insurance was not going to cover the costs she said the bill is up to eighty thousand dollars already and she said mrs. wine cough I hope you realize that you're responsible for this bill I was just hysterical I thought what am I gonna do I've worked my whole life is this how my life is gonna end that's terrible because some debts are completely unavoidable this isn't someone spending 80 thousand dollars on this Versace coat that looks like a banana a Rorschach test this is someone spending 80 thousand dollars to breathe but the fact that so many people have money trouble is not really surprising what may surprise you is the extent to which seriously delinquent debts have now given birth to an entire debt buying industry when most consumers get a call and say I'm calling in your Bank of America debt you assume that it's someone a bay America but what happens is Bank America's sold off that debt for pennies on the dollar years ago and it's been bought and sold and bought and sold bought and sold most of the big banks do it and not just banks by payday loans book club membership Jim fees auto loans every year billions of dollars of this debt is sold off cheap it's true debt buying companies like these that you've probably never heard of have amassed a huge amount of Americans debt in fact the largest encore Capital Group which has these subsidiaries tell investors that one in five consumers either owes them money now or has owed them money in the past which is incredible because that means statistically one member of Evanescence owes or has owed on corn money and I think we all know who that would be it would be guitarist and backing vocalist Troy McLawhorn but as you will see almost every step of how this industry is allowed to operate is problematic and let's start at the very beginning let's say you have a thousand dollar credit card debt that you can't pay at a certain point your bank might write off the full thousand dollars on its taxes and then to make just a little extra money sell it off to a debt buyer for a tiny fraction of the cost maybe $50 and that debt buyer can then come after you for the full original amount and if it can't collect potentially it can then we sell that debt for a fraction of what it paid to someone else who can still come after you for the original amount or sell it for a fraction of what it paid and so on and so on and so on now you might think the information changing hands would include a lot of verifiable information but you would be wrong it's I think helpful I understand that when I talk about debt that's being bought and sold here we're really just talking about an Excel spreadsheet the spreadsheet will have debtors name social security number address balance date that the account was opened maybe one or two other fields but that's basically about it that's right the information about your debt may be solved in an Excel spreadsheet which is troubling for two reasons first nothing good happens in Excel most of us go into a cold sweat if we just open it by accident let me go back in time and fix this and second in many states there is little obligation on the part of the debt seller to provide additional documentation many leaked contracts have explicitly stated that debts are being sold as is and with all faults which are weird terms to see in a major business transaction they'd even be troubling in the context of an OkCupid profile as is with all thoughts sometimes I masturbate to the Little Mermaid hey it's the fish half that does it for me now as for debt buyers they aren't always scrupulous about checking their information before collecting which is why it is not surprising to see incidents like this I opened the door and a envelope was thrown at me and the guy said you've been served and left supposedly it was a debt that I owed it was right under five thousand dollars what it was with a company I never had a card with it's humiliating it's intimidating it it provokes a lot of anxiety humiliating intimidating and provokes anxiety and to be honest I've had a similar experience but at least afterwards I got to brag that I finally lost my virginity it was some years after that it's not just it's not just these suits for a debt you don't recognize buyers can end up harassing you over debt that is past the statute of limitations or that you've discharged through bankruptcy or that you've paid you may have seen stories like this on local news because it's got a fun name is called zombie debt that's debt that you thought was dead but starts to take on a whole new life much like a zombie buried old debt coming back to life it's called zombie debt we're not talking about the kind of zombies that terrorize humans each week on The Walking Dead old death thought to be settled and buried coming out of the grave if not to eat your brain and certainly to give you a headache zombies are fun but the comparison is actually quite apt because just like on The Walking Dead zombie debt comes back from the grave is incredibly hard to deal with and seems to disproportionately impact minorities so so once once a company has bought your debt whether the information is accurate or not they are going to try to collect on it and they can either do that themselves or assign it to a collection agency and while many collectors work within the bounds of the law some behave like this is not just horrifying it's stupid how are you gonna put handcuffs on a dog they don't have wrists the cuffs are just gonna slip straight off they're cocky pause your plan is silly and some debt collectors won't just stop at calling you listen to an employee of an upstate New York debt buyer explain one of his tactics to a hidden camera which is pretty nasty though is that I'll find out where somebody works and then I'll find out who the owner their company is find out their number and call them at home that's my favorite thing to do that's your favorite thing that is the weirdest favorite thing I've ever heard and I am including whiskers on kittens and ground paper packages tied up with string that's a parcel bomb she's describing a parcel bomb also what's wrong with the rest of the kitten you creep now tactics like the ones that man described are illegal but debt buyers have been caught operating in flagrant disregard for the law just look at william scott and associates federal prosecutors allege in a criminal trial that will start next month that they lied to debtors telling them they were part of a government force set up to investigate fraud and using this letterhead featuring a clip art image of scales and the logo of for some reason the state's Department and they even gave their employees aliases like senior investigate or ace Rogers and Joe Steele which sound like the stage names of understudy Chippendales sorry ace sorry Joe everyone's here again tonight please put your shirts on and leave and look the debt buying industry will tell you that all these abuses are outliers and that most debt buyers work within the law but one way they do that is that they sue people a lot debt buyers are among the heaviest individual users of our state court systems in fact in some cities like Newark st. Louis and Chicago and this is true debt buyers have been found to file more cases than any other type of plaintiff and if you're wondering how the lawyers representing debt buyers possibly have time to review all those cases they often don't when one New Jersey collection firm was sued they found that one attorney reviewed up to a thousand cases a day reviewing one case for just four seconds and look there are definitely things that you can review in under four seconds Lay's biscuits and gravy flavored potato chips for instance one two three awful there you go or your mother's new boyfriend one Mississippi two missile not my real dad but for judging whether you have enough information to sue someone should really take a little longer than that and it turns out there is a strategy behind filing so many lawsuits these companies Bank on consumers ignoring the lawsuits which means they're automatically responsible for the debt they're dealing with ninety to ninety-five percent of these lawsuits going unanswered it's true they go unanswered meaning people don't turn up to their court dates and the debt buyers win by default and the phrase by default makes any situation sound less legitimate hi I want you to meet Carson he's my boyfriend by default oh hi Carson I have a lot of questions then and if they win in many states they then have the power to garnish your wages directly and given all of this it is hardly surprising that the debt collection industry of which debt buyers are a major part can claim a dubious honor we receive more complaints about this industry than any other and last year alone consumers filed over two hundred and eighty thousand complaints with federal authorities related to debt collection Wow there aren't even two hundred and eighty thousand complaints on the Yelp page for Hitler's bunker although though I don't like to add one more why is there a Yelp page for this one star one star for you now regulators and prosecutors have taken some successful actions against big players in the debt industry and some states have tightened their laws concerning debt buyers but others like these have all loosened regulation just look at Arkansas where in 2013 representative John vines proposed HB 2028 which he claimed didn't do much at all what it does is it defines the term credit card which is apparently not been defined throughout our many UCC provisions so all this does is define credit card and other terms that are germane to credit card and credit card usage 2028 now I know that sounds like the most boring man describing the world's most boring bill boringly but that's not all it did because that bill actually defines the legal term creditor to include debt buyers and established a presumption of correctness of the information in favor of the debt buyer that is a very friendly deal for them or anyone like a bank that would want to sell to them and it's worth noting that representative vines his wife works for a bank and I'd say he should have disclosed that but there was really no need to because the legislature was too busy creepily joking about it and is this considered a pro consumer bill or neither not neutral is up for the banking would it I don't I don't know that it's going to have any effect on the consumer it's more just clarify the terms of usage I think presently used in the industry represented Williams if it's not good for banking I suggest it representative representative vines not go home tonight well I would suggest the same way I want to make sure that he's taking care of the bankers always tell you what if I don't take care of the bankers I'm gonna be taking care of myself in the shower for the rest of the week y'all know what I mean five give me five I'll take another five let's make it a twenty by the way that that bill passed the Arkansas House 83 to zero but perhaps what's most concerning about all of this is that in some states there is a shockingly low barrier of entry into this industry in these states you can purchase debt with no license and in these states you can collect on debts with no license essentially that means there are places in this country where you need to fill out less paperwork to start collecting money from people's pockets than you do to collect fish from a king lake now the debt buyers trade group DBA international claims the industry is working to regulate itself in fact it's developed a code of ethics it calls the gold standard of the industry it actually has an annual conference in Las Vegas which does make sense as Vegas as we know is the gold standard of shitty places anyone can go to their conference though I frankly wouldn't recommend it it's pretty bleak and the reason I know that is we sent people with a hidden camera and the footage they brought back was fascinating not fascinating like a good book more fascinating like a rat carrying a wedding ring across some train tracks there's a story there and it's a king sad one but right from the start of the conference there was a defensive tone one seminar was actually titled debt buyers are the good guys how to convince the court although their argument for that seemed shaky at best what we're doing unbeknownst the most of the world is we're helping the economy we're securing monies from sources that wouldn't ordinarily have been paying them we're helping people who were struggling with that to try to restructure that and get their lives back in order oh yeah they're really helping people get their ducks in a row but only in the window of a Chinese restaurant since this good guy conference also featured a free shoeshine booth for a business promising to liquidate your bankrupt and deceased debt which is exactly what it sounds like because their business includes collecting on a debt after the debtor passes away and that is the sleaziest way of making money imaginable other than a petting zoo attendant charging ten bucks extra to let you get to second base with a goat and whenever the Lord did come up speakers could be surprisingly glib for instance some debt buyers try to collect on out of statute debt which is debt that has grown so old you can no longer be sued over it and that is something that some states now require debt buyers notify you about in letters that they sent but watch the contempt with which one speaker dismisses those warnings who's gonna be nourished in these words the unsophisticated consumer I don't know do you think you think we're good is it really gonna impact your collection I'd be curious to know you know but all those disclaimers you want on the letter has it has it really negatively impacted collections nobody inside with it and I know it doesn't but I have a proposed these plaintiffs these lawsuits they already read the letter o Q no not a good guy business model has ever been based on the logic of don't worry about people's legal rights I'm pretty sure half these unsophisticated morons can't read right guys right am i right though guys look it is pretty clear by now debt buying is a grimy business and badly needs more oversight because as it stands any idiot can get into it and I can prove that to you because I'm an idiot and we started a debt buying company [Applause] back in April we spent $50 to incorporate a debt acquisition company online in Mississippi and incidentally over the Internet is the best way to experience Mississippi we called it we called it central asset recovery professionals or carp after the bottom-feeding fish I became chairman of the board and carp set up this very bland website and dipped our toes into the debt market and with little more to go on than that website we were soon offered a portfolio of nearly fifteen million dollars of out of statute medical debt from Texas and a cost of less than half a cent on the dollar which is less than 60 grand for that amount carp would be sent to the personal information including names current addresses and Social Security numbers of nearly 9,000 people 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 debts 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 and that is why we actually decided to go another way because we thought well instead of collecting on the money why not forgive it because on one hand it's obviously the right thing to do but much more importantly we'd be staging the largest one-time giveaway in television show history because as best we can tell the most anyone has ever given away on a TV show at one time to date was this [Applause] that giveaway was worth nearly eight million dollars but we bought nearly twice that in medical debt so instead of having the file sent to carp we had the seller send it directly to a nonprofit organization which specializes in forgiving medical debt with no tax consequences for the debtor and tonight at my signal with the power vested in me as chairman of the board of car they will commence the debt forgiving process so what do you say are you ready to make television history the 9,000 people whose medical debt we bought the larger issue is we need much clearer rules and tougher oversight to protect consumers from potentially predatory companies like the one that we set up but in the mean time it seems the least we can do with this debts that I cannot Qing believe we are allowed to own is to give it away so are you ready to do this give away fifteen million dollars [Applause] [Applause] you [Applause]

Channel: LastWeekTonight

Views: 14,457,937

Rating: 4.9044852 out of 5

Keywords: last week tonight with john oliver, john oliver, last week tonight, debt buying, debt buyers, john oliver debt buying

Id: hxUAntt1z2c

Length: 20min 50sec (1250 seconds)

Published: Sun Jun 05 2016

Reddit Comments

[u/[deleted]]

Mirror

[u/Franneboy]

So if you owe money, in theory could you start your own version of CARP and buy the rights to your own debt for pennies on the dollar?

[u/Asiansensationz]

If anything, this video showed me how cheap and easy it is to buy people's personal information.

SSN, name, phone number, and current address are the protections used against gaining your other information which can leverage into more sensitive information.

People who are experienced with social engineering or even have an understanding in that field can access your online banking and more.

It's disgusting and unethical that these information can be even sold in the first place.

[u/8165128200]

I wish it was still possible to donate to Rolling Jubilee to do the same thing, but on a larger scale.

[u/ZXander_makes_noise]

FUCK YOU OPRAH

[u/yushieboy]

Can someone ELI5 wat just happened?

[u/GIGANTIC_SUBWOOFERS]

Just think how many bees you could buy with 14 million.

[u/PeterMus]

There are multiple charities that do exactly this.

It must be a big relief....because their's nothing quite like a person demanding your gross income for the year because you had an accident and broke your leg without insurance.

[u/Cmorebuts]

Mirror please for us Australians :)