How do debt collectors work? I had [a post about debt](https://www.reddit.com/r/YouShouldKnow/comments/fgfal5/ysk_you_have_rights_when_it_comes_to_debt/?utm_source=share&utm_medium=ios_app&utm_name=iossmf) in another sub that went viral so I’ve been getting a lot of comments on it. There’s so many people saying that they didn’t acknowledge their debt and eventually the debt collectors stop trying.
How tf is this a viable business? From what I understand, they buy debt at a discount and charge the full debt or even more than 100% to profit. Do most people pay the debt collectors? It seems like if a lot of people don’t pay that this would not be a feasible business to ever start.. so they obviously make money some how. Am I on the right track or am I missing something?
In: Economics
* They are good at getting people to acknowledge their debts, sometimes with persistence, sometimes with trickery, sometimes with scare tactics.
* Ignoring debt collectors is not without consequences. People who ignore legitimate debt collection attempts often wind up paying off those debts, with interest and penalties, when they need to get a loan.
* Debt collectors can and often do take debtors to court.
* They pay pennies on the dollar for debts, they only need to collect on a small fraction to make a profit.
Latest Answers