Once the collection agency gets hold of you the gloves are off, but you have the upper hand if only you know it. They will have one of two ways of working with the lender. Either they will be employed as an agent working on a commission, or they will buy a list of debts at a cost of 1% to 20% of face value. My Debt Killer letters work in either case.
Commonly they have bought your debt for maybe ten percent of its value and they assume this gives them the right to chase you for the whole amount. They will start by sending letters threatening all kinds of dire consequences. The agent who calls you on the phone is highly trained and is working to a script designed to play on your guilt and vulnerability.
Telephone agents get paid on results and will resort to any trick to get you to either pay the whole amount, or installments. Once you agree, they’ve got you. If you don’t make an arrangement with them they will more than likely come back later with a reduced settlement figure, which will still give them a good profit. They probably paid a maximum of 10% of the debt’s value, sometimes as little as 1%, so they can make what seems like a very attractive offer and still be quids in.
They may threaten to take you to court, ruin your credit rating and even bankrupt you. It all seems very intimidating (you can see some examples here), but you have to look at it from their perspective. As far as they are concerned it’s a commercial deal. It’s a waste of their time and money to make you bankrupt when they have nothing to gain from it. They know they can intimidate enough people on their list to pay up and give them a handsome profit. Once you call their bluff, they know the game’s up. For them it’s a game with high profits.
This is the game.
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