This is a fascinating article on how the debt collection business works. Obviously, it’s a profile of just one agency, but it’s still a great read with lots of good information.
Some of the deals Siegel made were hugely profitable, while others proved more troublesome. As he soon discovered, after creditors sell off unpaid debts, those debts enter a financial netherworld where strange things can happen. A gamut of players — including debt buyers, collectors, brokers, street hustlers and criminals — all work together, and against one another, to recoup every penny on every dollar. In this often-lawless marketplace, large portfolios of debt — usually in the form of spreadsheets holding debtors’ names, contact information and balances — are bought, sold and sometimes simply stolen.
Stolen. This was the word that was foremost in Siegel’s mind on that October afternoon. He had strong reason to believe that a portfolio of paper — his paper — had been stolen and was now being “worked” by one of the many small collection agencies on the impoverished and crime-ridden East Side of Buffalo. Using his spreadsheets, this unknown agency was calling his debtors and collecting debt that was rightfully his. The debtors, of course, had no way of knowing who actually owned the debt. Nor did they have any reason to suspect that they might be paying thieves. They were simply being told they owed the money and had to pay.
This was not a problem Siegel was used to handling. There had been no classes at Simon Business School on how to apprehend crooks who appropriated your assets. He could, of course, call the police or the state attorney general, but by the time they intervened, the paper would be picked clean, worthless. His problem was more fundamental, more pressing. At this point, he didn’t know exactly how many files had been stolen, but he knew he needed immediate intervention.
Fortunately, Siegel had someone to call — a fixer who knew just what to do. (NY Times)
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