5 ms·
Doesn't use the shady, illegal tactics + settles for less than the dollar value of the debt. For instance, they buy it for $.05 and settles for whatever the de
by opendais 12y ago
Doesn't use the shady, illegal tactics + settles for less than the dollar value of the debt.
For instance, they buy it for $.05 and settles for whatever the debtor can reasonably pay that covers costs plus a reasonable margin, like 100%. So they buy it at $.05 and let the debtor pay it off for $.10 + the collector's cost.
I'd guess that is something like 25-50% of the value of face value of the debt.
- jbigelow76 12y agoYou idea of doesn't sound tenable. The "ethical" agency would need an extremely high conversion rate. Something probably in the 75% neighborhood, to cover operating expenses, the 25% that doesn't convert and then a little left over for profit. Judging by the value of write off debt (pennies on the dollar) the implicit conversion rate of collecting is probably closer to what you might see on a Facebook advertising campaign (3-5 percent??). To make that work the agencies need to charge close to the original charge off amount.
- dllthomas 12y agoI wonder if you could run it as a non-profit, offering reductions in exchange for classes on budgeting, &c, (where appropriate) and making up some of the shortfall with donations.