CREDITWRENCH opines on collection agencies
The Enormis Dingleberry says:
Now while Bill Bauer may hate collection agencies and want to see them all out of business, his statement that it would help the economy defies basic economic principles.
Lenders would recover less on their loans making less money available to lend. Supply and demand dictates they would have to charge more for the money that is lent. Additionally, the full write off rather than a partial recovery means their operating costs would increase. Again, inflating the cost of loans.
CREDITWRENCH stating that putting collection agencies out of business would help our economy is false and misleading.
The Enormis Dingleberry does not stop to think that if collection agencies did not exist then creditors would do their collections in house and would be likely to collect far more than collection agencies currently do since they would have a greater interest in getting their money collected. Collection agencies typically collect only about 30% of the debts assigned to them and that is a very poor collection rate.
When selling their junk debt to collectors, large creditors normally sell for about 4 to 5 cents on the dollar. There are multiple reasons they are willing to sell so cheaply and one of them is that all things considered they get more net cash that way than they would if they turned it over to a debt collector. One of the reasons that the return is so low is that good debt collection employees can earn extremely good commissions and that is money that would have been in the creditor's coffers if they used in house collections.
Debt collectors have done such a good job of ripping off their clients that it is now more profitable to sell the chargeoffs for what few pennies on the dollar they can get than it is to assign it to some collection agency only to get ripped off.
Yes, it should be quite clear that forcing creditors to do their collections in house by putting debt collectors out of business would be a great boon to our economy.
CREDITWRENCH CEO Bill Bauer's stated position on collection agencies is:
"every collection agency we can put out of business is a definite help to our economy"
Now while Bill Bauer may hate collection agencies and want to see them all out of business, his statement that it would help the economy defies basic economic principles.
Lenders would recover less on their loans making less money available to lend. Supply and demand dictates they would have to charge more for the money that is lent. Additionally, the full write off rather than a partial recovery means their operating costs would increase. Again, inflating the cost of loans.
CREDITWRENCH stating that putting collection agencies out of business would help our economy is false and misleading.
The Enormis Dingleberry does not stop to think that if collection agencies did not exist then creditors would do their collections in house and would be likely to collect far more than collection agencies currently do since they would have a greater interest in getting their money collected. Collection agencies typically collect only about 30% of the debts assigned to them and that is a very poor collection rate.
When selling their junk debt to collectors, large creditors normally sell for about 4 to 5 cents on the dollar. There are multiple reasons they are willing to sell so cheaply and one of them is that all things considered they get more net cash that way than they would if they turned it over to a debt collector. One of the reasons that the return is so low is that good debt collection employees can earn extremely good commissions and that is money that would have been in the creditor's coffers if they used in house collections.
Debt collectors have done such a good job of ripping off their clients that it is now more profitable to sell the chargeoffs for what few pennies on the dollar they can get than it is to assign it to some collection agency only to get ripped off.
Yes, it should be quite clear that forcing creditors to do their collections in house by putting debt collectors out of business would be a great boon to our economy.
posted by Creditwrench @ 6:24 AM
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