- American households collectively owe over $12 trillion in debt, with $436 billion being seriously delinquent
- Debt-buying industry has emerged, where debts are sold off cheaply to companies
- Debt buyers often lack verifiable information about the debt they purchase
- Debt buyers can harass individuals over debts that are past the statute of limitations or have already been paid
- Debt collectors can engage in illegal and abusive tactics, such as threatening and harassing individuals
- Some debt buyers have been caught operating in flagrant disregard for the law
- Debt buyers often sue individuals, with some cities seeing more cases filed by debt buyers than any other type of plaintiff
- Lawyers representing debt buyers often do not have enough time to properly review cases, leading to potential errors and abuses in the legal process.

- Debt collection industry relies on consumers ignoring lawsuits, leading to debt buyers winning by default
- Debt collection industry receives the most complaints compared to any other industry
- Some states have loosened regulations on debt buyers, making it easier for them to collect debt
- Debt buyers trade group claims to regulate itself with a code of ethics, but hidden camera footage reveals a bleak conference
- Debt buyers try to collect on out-of-statute debt and dismiss warnings about it in letters
- Debt buying is a grimy business that needs more oversight
- The video shows how easy it is for anyone to start a debt-buying company and acquire personal information of thousands of people
- Instead of collecting on the debt, the video decides to forgive it and stage the largest one-time giveaway in television show history.

The speaker acknowledges the need for clearer rules and oversight to protect consumers from predatory companies, but in the meantime, they are giving away $15 million to help the 9,000 people whose medical debt they bought.

- American households collectively owe over $12 trillion in debt, with $436 billion being seriously delinquent
- Debt-buying industry has emerged, where debts are sold off cheaply to companies
- Debt buyers often lack verifiable information about the debt they purchase
- Debt buyers can harass individuals over debts that are past the statute of limitations or have already been paid
- Some debt buyers have been caught operating in flagrant disregard for the law
- Debt buyers often sue individuals, with some cities seeing more cases filed by debt buyers than any other type of plaintiff
- Lawyers representing debt buyers often do not have enough time to properly review cases, leading to potential errors and abuses in the legal process.
- Debt collection industry relies on consumers ignoring lawsuits, leading to debt buyers winning by default
- Debt collection industry receives the most complaints compared to any other industry
- Some states have loosened regulations on debt buyers, making it easier for them to collect debt
- Debt buyers try to collect on out-of-statute debt and dismiss warnings about it in letters
- Debt buying is a grimy business that needs more oversight
- The video shows how easy it is for anyone to start a debt-buying company and acquire personal information of thousands of people
- Instead of collecting on the debt, the video decides to forgive it and stage the largest one-time giveaway in television show history.
- The speaker acknowledges the need for clearer rules and oversight to protect consumers from predatory companies, but in the meantime, they are giving away $15 million to help the 9,000 people whose medical debt they bought.

Companies that purchase debt cheaply then collect it aggressively are shockingly easy to start. We can prove it! 

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It's the reason Nicolas Cage has made so many great choices in recent years.

And presumably, it's the fuel he uses to power performances like this 1 from his recent movie, the trust.

He delivered that line like a child on PCP opening birthday presents, which he clearly hopes are full of more PCP.

Now, American households collectively owe over $12 trillion in debt.

And right now, 436 billion of that debt is seriously delinquent, meaning it's 90 or more days past due.

And it is not good when anything is that late.

If your baby were 3 months overdue, you'd effectively just be giving birth to a floppy toddler.

And look, clearly, If you have debts, you should pay them if you can.

But, many people can find themselves in debt for no direct fault of their own.

A few years ago, he was in intensive care over breathing trouble, and after 4 days of treatment, the hospital told his wife that their insurance was not going to cover the costs.

She said, the bill is up to $80,000 already, and she said, Mrs.

Weinkauf, I hope you realize that you're responsible for this bill.

That's terrible, because some debts are completely unavoidable.

This isn't someone spending $80,000 on this Versace coat that looks like a banana fucked a Rorschach test.

No, this is someone spending $80,000 to breathe.

But the fact that so many people have money trouble is not really surprising.

What may surprise you is the extent to which seriously delinquent debts have now given birth to an entire debt-buying industry.

When most consumers get a call and say, I'm calling on your Bank of America debt, you assume that it's someone at Bank of America.

But what happens is, Bank of America's sold off that debt for pennies on the dollar years ago, and it's been bought and sold and bought and sold and bought and sold.

Most of the big banks do it, and not just banks, but payday loans, book club membership, gym fees, auto loans.

Every year, billions of dollars of this debt is sold off cheap.

Debt-buying companies like these, that you've probably never heard of, have amassed a huge amount of Americans' debt.

In fact, the largest, Encore Capital Group, which has these subsidiaries, tell investors that 1 in 5 consumers either owes them money now, or has owed them money in the past.

Which is incredible, because that means, statistically, 1 member of Evanescence owes or has owed Encore money.

And I think we all know who that would be.

It would be guitarist and backing vocalist, Troy McClawhorn.

But as you will see, almost every step of how this industry is allowed to operate is problematic.

Let's say you have a thousand dollar credit card debt that you can't pay.

At a certain point, your bank might write off the 4000 dollars on its taxes and then to make just a little extra money, sell it off to a debt buyer for a tiny fraction of the cost, maybe $50.

And that debt buyer can then come after you for the full original amount.

And if it can't collect, potentially it can then resell that debt for a fraction of what it paid to someone else who can still come after you for the original amount.

Or sell it for a fraction of what it paid, and so on, and so on, and so on.

Now, you might think the information-changing hands would include a lot of verifiable information, but you would be wrong.

It's, I think, helpful to understand that when I talk about debt that's being bought and sold here, we're really just talking about an Excel spreadsheet.

The spreadsheet will have debtor's name, social security number, address, balance, date that the account was opened, maybe 1 or 2 other fields, but that's basically about it.

The information about your debt may be sold in an Excel spreadsheet, which is troubling for 2 reasons.

Most of us go into a cold sweat if we just open it by accident.

-...and second, in many states, there is little obligation on the part of the debt seller to provide additional documentation.

Many leaked contracts have explicitly stated the debts are being sold as is and with all faults, which are weird terms to see in a major business transaction.

They'd even be troubling in the context of an OK Cupid profile.

As is, with all faults, sometimes I masturbate to the Little Mermaid.

Hey, hey, it's the fish half that does it for me.

Now, as for debt buyers, they aren't always scrupulous about checking their information before collecting.

Which is why it is not surprising to see incidents like this.

Envelope was thrown at me, and the guy said, you've been served and left.

Supposedly, it was a debt that I owed, it was right under $5,000.

It was with a company I never had a card with.

Humiliating, intimidating, and provokes anxiety.

And to be honest, I've had a similar experience, but at least afterwards, I got to brag that I finally lost my virginity.

It's not just being sued for a debt you don't recognize.

Buyers can end up harassing you over debt that is past the statute of limitations, or that you've discharged through bankruptcy, or that you've paid.

You may have seen stories like this on local news, because It's got a fun name.

That's debt that you thought was dead, but starts to take on a whole new life, much like a zombie.

We're not talking about the kind of zombies that terrorize humans each week on

Old debt thought to be settled and buried, coming out of the grave, if not to eat your brain, then certainly to give you a headache.

But the comparison is actually quite apt, because just like on The Walking Dead, zombie debt comes back from the grave, is incredibly hard to deal with, and seems to disproportionately impact minorities.

Once a company has bought your debt, Whether the information is accurate or not, they are going to try to collect on it.

And they can either do that themselves, or assign it to a collection agency.

And while many collectors work within the bounds of the law, some behave like this.

If you refuse to answer the door to me, I guarantee you, I will wake up every neighbor in your entire...

If you're still moving, why don't you just go check in front of the train?

You wanna be a man, or you wanna hide behind the telephone like a little bitty mouse?

We're gonna have your dog arrested, we're gonna shoot him up, we're gonna eat him.

That is not just horrifying, it's stupid.

How are you gonna put handcuffs on a dog?

The cuffs are just gonna slip straight off their doggy paws.

And some debt collectors won't just stop at calling you.

Listen to an employee of an upstate New York debt buyer explain 1 of his tactics to a hidden camera.

1 of the things that I like to do, which is pretty nasty though, is that I'll find out where somebody works, and then I'll find out who the owner of their company is, find out their number and call them at home.

That is the weirdest favorite thing I've ever heard.

And I am including whiskers on kittens and brown paper packages tied up with string.

Also, what's wrong with the rest of the kitten, you creep?

Now, tactics like the ones that man described are illegal, but debt buyers have been caught operating in flagrant disregard for the law.

Just look at William Scott and Associates.

Federal prosecutors allege in a criminal trial that will start next month, that they lied to debtors, telling them they were part of a government task force set up to investigate fraud, and using this letterhead, featuring a clip art image of scales, and the logo of, for some reason, the State Department.

And they even gave their employees aliases like, Senior Investor Gator Ace Rogers, and Joe Steel, which sound like the stage names of understudy Chippendales.

And look, the debt-buying industry will tell you that all these abuses are outliers, and that most debt-buyers work within the law.

But, 1 way they do that is that they sue people a lot.

Debt buyers are among the heaviest individual users of our state court systems.

Louis, and Chicago, and this is true, debt buyers have been found to file more cases than any other type of plaintiff.

And if you're wondering how the lawyers representing debt buyers possibly have time to review all those cases, they often don't.

When 1 New Jersey collection firm was sued, they found that 1 attorney reviewed up to 1,000 cases a day, reviewing 1 case for just 4 seconds.

And look, there are definitely things that you can review in under 4 seconds.

Lay's biscuits and gravy flavored potato chips, for instance.

But judging whether you have enough information to sue someone should really take a little longer than that.

And it turns out there is a strategy behind filing so many lawsuits.

These companies bank on consumers ignoring the lawsuits, which means they're automatically responsible for the debt.

They're dealing with 90 to 95 percent of these lawsuits going unanswered.

They go unanswered, meaning people don't turn up to their court dates and the debt buyers win by default.

And the phrase, by default, makes any situation sound less legitimate.

Hi, I want you to meet Carson, he's my boyfriend by default.

Oh, hi Carson, I have a lot of questions then.

And if they win, in many states, they then have the power to garnish your wages directly.

And given all of this, it is hardly surprising that the debt collection industry, of which debt buyers are a major part, can claim a dubious honor.

We receive more complaints about this industry than any other.

And last year alone, consumers filed over 280,000 complaints with federal authorities related to debt collection.

There aren't even 280,000 complaints on the Yelp page for Hitler's bunker.

Although, I'd actually like to add 1 more.

Now, regulators and prosecutors have taken some successful actions against big players in the debt industry, and some states have tightened their laws concerning debt buyers, but others, like these, have all loosened regulation.

Just look at Arkansas, where in 2013, Representative John Vines proposed HB 2028, which he claimed didn't do much at all.

What it does is it defines the term credit card, which has apparently not been defined throughout our many UCC provisions.

So all this does is define, credit card and, other, terms that are germane to credit card and credit card usage, 2028.

Now, I know that sounds like the world's most boring man describing the world's most boring bill, boringly, but that's not all it did.

Because that bill actually defines the legal term, creditor, to include debt buyers, and established a presumption of correctness of the information in favor of the debt buyer.

That is a very friendly deal for them, or anyone, like a bank, that would want to sell to them.

And it's worth noting that Representative Vines' wife works for a bank.

And I'd say he should have disclosed that, but there was really no need to, because the legislature was too busy creepily joking about it.

And is this considered a pro-consumer bill, or not neutral, or is it helpful for the banking?

I don't know that it's gonna have any effect on the consumer, it's more just to clarify the terms of usage, I think, presently used in the industry representative williams if it's not good for banking I'd suggest represent representative vines not go home tonight well

I I would say the same way I want to make sure that he's taking care of the bankers.

Tell you what, if I don't take care of the bankers, I'm going to be taking care of myself in the shower for the rest of the week.

Now, by the way, that bill passed the Arkansas House 83 to 0.

But perhaps what's most concerning about all of this is that in some states, there is a shockingly low barrier of entry into this industry.

In these states, you can purchase debt with no license.

And in these states, you can collect on debt with no license.

Essentially, that means there are places in this country where you need to fill out less paperwork to start collecting money from people's pockets than you do to collect fish from a fucking lake.

Now, the debt-buyers trade group, DBA International, claims the industry is working to regulate itself.

In fact, it's developed a code of ethics it calls the gold standard of the industry.

It actually has an annual conference in Las Vegas, which does make sense, as Vegas, as we know, is the gold standard of shitty places.

-...anyone can go to their conference, though I frankly wouldn't recommend it.

And the reason I know that is, we sent people with a hidden camera, and the footage they brought back was fascinating.

More fascinating like a rat carrying a wedding ring across some train tracks.

There's a story there, and it's a fucking sad 1.

But right from the start of the conference, there was a defensive tone.

1 seminar was actually titled, Debt Buyers Are The Good Guys, How To Convince The Court.

Although, their argument for that seemed shaky at best.

What we're doing, unbeknownst to most of the world, is We're helping the economy.

We're securing monies from sources that wouldn't ordinarily have been paying them.

We're helping people who are struggling with debt to try to restructure debt and get their lives back in order.

They're really helping people get their ducks in a row, but only in the window of a Chinese restaurant sense.

This good guy conference also featured a free shoeshine booth for a business promising to liquidate your bankrupt and deceased debt, which is exactly what it sounds like, because their business includes collecting on a debt after the debtor passes away.

And that is the sleaziest way of making money imaginable, other than a petting zoo attendant charging 10 bucks extra to let you get to second base with a goat.

♪ And whenever the law did come up, speakers could be surprisingly glib.

For instance, some debt buyers try to collect on out-of-statute debt, which is debt that has grown so old, you can no longer be sued over it.

And that is something that some states now require debt buyers notify you about in letters that they send.

But watch the contempt with which 1 speaker dismisses those warnings.

Is it really gonna impact your collection?

But all those disclaimers you want in the letter, has it really negatively impacted collections?

I'm not sure nobody wants to raise their hand.

I looked at it and I know it doesn't, but I...

I depose these plaintiffs in these lawsuits.

No good guy business model has ever been based on the logic of, well, don't worry about people's legal rights.

I'm pretty sure half these unsophisticated morons can't read.

Look, it is pretty clear by now, debt buying is a grimy business and badly needs more oversight.

Because as it stands, Any idiot can get into it.

And I can prove that to you, because I'm an idiot, and we started a debt-buying company.

Back in April, we spent $50 to incorporate a debt acquisition company online in Mississippi.

And incidentally, over the internet is the best way to experience Mississippi.

We called it Central Asset Recovery Professionals, or CARP, after the bottom feeding fish.

I became chairman of the board, and CARP set up this very bland website and dipped our toes into the debt market.

And with little more to go on than that website, we were soon offered a portfolio of nearly 15 million dollars of out of statute medical debt from Texas, at a cost of less than half a cent on the dollar, which is less than 60 grand.

For that amount, CARP would be sent the personal information, including names, current addresses, and social security numbers of nearly 9,000 people.

Because it means if I wanted to, I could legally have CARP take possession of that list and have employees start calling people, turning their lives upside down over medical debt they no longer had to pay.

There would be absolutely nothing wrong with that, except for the fact that absolutely everything is wrong with that.

And that is why we actually decided to go another way.

Because we thought, Well, instead of collecting on the money, why not forgive it?

Because on 1 hand, it's obviously the right thing to do, but much more importantly, we'd be staging the largest one-time giveaway in television show history.

Because as best we can tell, the most anyone has ever given away on a TV show at 1 time to date was this.

Now, that giveaway was worth nearly $8 million, but we bought nearly twice that in medical debt.

So instead of having the file sent to CARP, we had the seller send it directly to a non-profit organization which specializes in forgiving medical debt with no tax consequences for the debtor.

And tonight, at my signal, with the power vested in me as chairman of the board of CARP, They will commence the debt forgiving process.

Are you ready to make television history?

Now, clearly, this is only going to help the 9,000 people whose medical debt we bought.

The larger issue is, we need much clearer rules and tougher oversight to protect consumers from potentially predatory companies like the 1 that we set up.

But in the meantime, it seems the least we can do with this debt that I cannot f**king believe we are allowed to own, is to give it away.

You are about to watch me give away $15 million.


Speaker 0: -♪ ♪ -♪ ♪ Debt. It's the reason Nicolas Cage has made so many great choices in recent years. And presumably, it's the fuel he uses to power performances like this 1 from his recent movie, the trust.

Speaker 1: Open it! Open it! Open it! Open it! Open it!

Open it! Open it! Open it! -...uh... -...uh...

Speaker 0: Holy shit! He... He delivered that line like a child on PCP opening birthday presents, which he clearly hopes are full of more PCP. Now, American households collectively owe over $12 trillion in debt. And right now, 436 billion of that debt is seriously delinquent, meaning it's 90 or more days past due.

And it is not good when anything is that late. If your baby were 3 months overdue, you'd effectively just be giving birth to a floppy toddler. And look, clearly, If you have debts, you should pay them if you can. But, many people can find themselves in debt for no direct fault of their own. Take Bob Weinkauf.

A few years ago, he was in intensive care over breathing trouble, and after 4 days of treatment, the hospital told his wife that their insurance was not going to cover the costs.

Speaker 2: She said, the bill is up to $80,000 already, and she said, Mrs. Weinkauf, I hope you realize that you're responsible for this bill. I was just hysterical. I thought, what am I gonna do? I've worked my whole life.

Is this how my life is gonna end?

Speaker 0: That's terrible, because some debts are completely unavoidable. This isn't someone spending $80,000 on this Versace coat that looks like a banana fucked a Rorschach test. No, this is someone spending $80,000 to breathe. But the fact that so many people have money trouble is not really surprising. What may surprise you is the extent to which seriously delinquent debts have now given birth to an entire debt-buying industry.

Speaker 3: When most consumers get a call and say, I'm calling on your Bank of America debt, you assume that it's someone at Bank of America. But what happens is, Bank of America's sold off that debt for pennies on the dollar years ago, and it's been bought and sold and bought and sold and bought and sold. Most of the big banks do it, and not just banks, but payday loans, book club membership, gym fees, auto loans. Every year, billions of dollars of this debt is sold off cheap.

Speaker 0: It's true. Debt-buying companies like these, that you've probably never heard of, have amassed a huge amount of Americans' debt. In fact, the largest, Encore Capital Group, which has these subsidiaries, tell investors that 1 in 5 consumers either owes them money now, or has owed them money in the past. Which is incredible, because that means, statistically, 1 member of Evanescence owes or has owed Encore money. And I think we all know who that would be.

It would be guitarist and backing vocalist, Troy McClawhorn. But as you will see, almost every step of how this industry is allowed to operate is problematic. And let's start at the very beginning. Let's say you have a thousand dollar credit card debt that you can't pay. At a certain point, your bank might write off the 4000 dollars on its taxes and then to make just a little extra money, sell it off to a debt buyer for a tiny fraction of the cost, maybe $50.

And that debt buyer can then come after you for the full original amount. And if it can't collect, potentially it can then resell that debt for a fraction of what it paid to someone else who can still come after you for the original amount. Or sell it for a fraction of what it paid, and so on, and so on, and so on. Now, you might think the information-changing hands would include a lot of verifiable information, but you would be wrong.

Speaker 3: It's, I think, helpful to understand that when I talk about debt that's being bought and sold here, we're really just talking about an Excel spreadsheet. The spreadsheet will have debtor's name, social security number, address, balance, date that the account was opened, maybe 1 or 2 other fields, but that's basically about it.

Speaker 0: That's right. The information about your debt may be sold in an Excel spreadsheet, which is troubling for 2 reasons. First, nothing good happens in Excel. Most of us go into a cold sweat if we just open it by accident. Oh, God!

Speaker 4: Oh, no, please, no! Let me go back in time and fix this!

Speaker 0: No! -...and second, in many states, there is little obligation on the part of the debt seller to provide additional documentation. Many leaked contracts have explicitly stated the debts are being sold as is and with all faults, which are weird terms to see in a major business transaction. They'd even be troubling in the context of an OK Cupid profile. As is, with all faults, sometimes I masturbate to the Little Mermaid.

Hey, hey, it's the fish half that does it for me. Now, as for debt buyers, they aren't always scrupulous about checking their information before collecting. Which is why it is not surprising to see incidents like this.

Speaker 5: I opened the door and a... Envelope was thrown at me, and the guy said, you've been served and left. Supposedly, it was a debt that I owed, it was right under $5,000. It was with a company I never had a card with. It's humiliating, it's intimidating.

It provokes a lot of anxiety.

Speaker 0: Humiliating, intimidating, and provokes anxiety. And to be honest, I've had a similar experience, but at least afterwards, I got to brag that I finally lost my virginity. It was... It was... It was some years after that.

But it's not... It's not just... It's not just being sued for a debt you don't recognize. Buyers can end up harassing you over debt that is past the statute of limitations, or that you've discharged through bankruptcy, or that you've paid. You may have seen stories like this on local news, because It's got a fun name.

Speaker 3: It's called zombie debt. That's debt that you thought was dead, but starts to take on a whole new life, much like a zombie.

Speaker 6: Buried old debt coming back to life. It's called zombie debt. We're not talking about the kind of zombies that terrorize humans each week on

Speaker 7: The Walking Dead. Old debt thought to be settled and buried, coming out of the grave, if not to eat your brain, then certainly to give you a headache.

Speaker 0: Yeah. Zombies are fun. But the comparison is actually quite apt, because just like on The Walking Dead, zombie debt comes back from the grave, is incredibly hard to deal with, and seems to disproportionately impact minorities. So... So once...

Once a company has bought your debt, Whether the information is accurate or not, they are going to try to collect on it. And they can either do that themselves, or assign it to a collection agency. And while many collectors work within the bounds of the law, some behave like this.

Speaker 8: James, give me my money back. I want my money, or I'll kill you.

Speaker 9: If you refuse to answer the door to me, I guarantee you, I will wake up every neighbor in your entire... ...House.

Speaker 8: If you're still moving, why don't you just go check in front of the train? You wanna be a man, or you wanna hide behind the telephone like a little bitty mouse? We're gonna have your dog arrested, we're gonna shoot him up, we're gonna eat him.

Speaker 0: Whoa! Whoa! That is not just horrifying, it's stupid. How are you gonna put handcuffs on a dog? They don't have wrists.

The cuffs are just gonna slip straight off their doggy paws. Your plan is silly. -$300,000. -$300,000. And some debt collectors won't just stop at calling you.

Listen to an employee of an upstate New York debt buyer explain 1 of his tactics to a hidden camera.

Speaker 10: 1 of the things that I like to do, which is pretty nasty though, is that I'll find out where somebody works, and then I'll find out who the owner of their company is, find out their number and call them at home. I love that. Call the boss at home. That's my favorite thing to do.

Speaker 0: That's your favorite thing? That is the weirdest favorite thing I've ever heard. And I am including whiskers on kittens and brown paper packages tied up with string. That's a parcel bomb? She's describing a parcel bomb.

Also, what's wrong with the rest of the kitten, you creep? Now, tactics like the ones that man described are illegal, but debt buyers have been caught operating in flagrant disregard for the law. Just look at William Scott and Associates. Federal prosecutors allege in a criminal trial that will start next month, that they lied to debtors, telling them they were part of a government task force set up to investigate fraud, and using this letterhead, featuring a clip art image of scales, and the logo of, for some reason, the State Department. And they even gave their employees aliases like, Senior Investor Gator Ace Rogers, and Joe Steel, which sound like the stage names of understudy Chippendales.

Sorry, Ace. Sorry, Joe. Everyone's here again tonight. Please put your shirts on and leave. And look, the debt-buying industry will tell you that all these abuses are outliers, and that most debt-buyers work within the law.

But, 1 way they do that is that they sue people a lot. Debt buyers are among the heaviest individual users of our state court systems. In fact, in some cities like Newark, St. Louis, and Chicago, and this is true, debt buyers have been found to file more cases than any other type of plaintiff. And if you're wondering how the lawyers representing debt buyers possibly have time to review all those cases, they often don't.

When 1 New Jersey collection firm was sued, they found that 1 attorney reviewed up to 1,000 cases a day, reviewing 1 case for just 4 seconds. And look, there are definitely things that you can review in under 4 seconds. Lay's biscuits and gravy flavored potato chips, for instance. 123, awful. There you go.

Or your mother's new boyfriend. 1 Mississippi, 2 Miss... Not my real dad! But... But judging whether you have enough information to sue someone should really take a little longer than that.

And it turns out there is a strategy behind filing so many lawsuits. These companies bank on consumers ignoring the lawsuits, which means they're automatically responsible for the debt.

Speaker 11: They're dealing with 90 to 95 percent of these lawsuits going unanswered.

Speaker 0: It's true. They go unanswered, meaning people don't turn up to their court dates and the debt buyers win by default. And the phrase, by default, makes any situation sound less legitimate. Hi, I want you to meet Carson, he's my boyfriend by default. Oh, hi Carson, I have a lot of questions then.

And if they win, in many states, they then have the power to garnish your wages directly. And given all of this, it is hardly surprising that the debt collection industry, of which debt buyers are a major part, can claim a dubious honor.

Speaker 12: We receive more complaints about this industry than any other. And last year alone, consumers filed over 280,000 complaints with federal authorities related to debt collection.

Speaker 0: Wow. There aren't even 280,000 complaints on the Yelp page for Hitler's bunker. Although, I'd actually like to add 1 more. Why is there a Yelp page for this? 1 star!

1 star for you! Now, regulators and prosecutors have taken some successful actions against big players in the debt industry, and some states have tightened their laws concerning debt buyers, but others, like these, have all loosened regulation. Just look at Arkansas, where in 2013, Representative John Vines proposed HB 2028, which he claimed didn't do much at all.

Speaker 11: What it does is it defines the term credit card, which has apparently not been defined throughout our many UCC provisions. So all this does is define, credit card and, other, terms that are germane to credit card and credit card usage, 2028.

Speaker 0: Now, I know that sounds like the world's most boring man describing the world's most boring bill, boringly, but that's not all it did. Because that bill actually defines the legal term, creditor, to include debt buyers, and established a presumption of correctness of the information in favor of the debt buyer. That is a very friendly deal for them, or anyone, like a bank, that would want to sell to them. And it's worth noting that Representative Vines' wife works for a bank. And I'd say he should have disclosed that, but there was really no need to, because the legislature was too busy creepily joking about it.

Speaker 13: And is this considered a pro-consumer bill, or not neutral, or is it helpful for the banking? What do you think?

Speaker 11: I don't know that it's gonna have any effect on the consumer, it's more just to clarify the terms of usage, I think, presently used in the industry representative williams if it's not good for banking I'd suggest represent representative vines not go home tonight well

Speaker 13: I I would say the same way I want to make sure that he's taking care of the bankers. Always.

Speaker 0: Oh, always. Tell you what, if I don't take care of the bankers, I'm going to be taking care of myself in the shower for the rest of the week. Y'all know what I mean? 5. Give me 5.

I'll take another 5. Let's make it a 20. -... Now, by the way, that bill passed the Arkansas House 83 to 0. But perhaps what's most concerning about all of this is that in some states, there is a shockingly low barrier of entry into this industry.

In these states, you can purchase debt with no license. And in these states, you can collect on debt with no license. Essentially, that means there are places in this country where you need to fill out less paperwork to start collecting money from people's pockets than you do to collect fish from a fucking lake. Now, the debt-buyers trade group, DBA International, claims the industry is working to regulate itself. In fact, it's developed a code of ethics it calls the gold standard of the industry.

It actually has an annual conference in Las Vegas, which does make sense, as Vegas, as we know, is the gold standard of shitty places. -...anyone can go to their conference, though I frankly wouldn't recommend it. It's pretty bleak. And the reason I know that is, we sent people with a hidden camera, and the footage they brought back was fascinating. Not fascinating like a good book.

More fascinating like a rat carrying a wedding ring across some train tracks. There's a story there, and it's a fucking sad 1. But right from the start of the conference, there was a defensive tone. 1 seminar was actually titled, Debt Buyers Are The Good Guys, How To Convince The Court. Although, their argument for that seemed shaky at best.

Speaker 14: What we're doing, unbeknownst to most of the world, is We're helping the economy. We're securing monies from sources that wouldn't ordinarily have been paying them. We're helping people who are struggling with debt to try to restructure debt and get their lives back in order.

Speaker 0: Oh, yeah. They're really helping people get their ducks in a row, but only in the window of a Chinese restaurant sense. -$10,000. -$10,000. This good guy conference also featured a free shoeshine booth for a business promising to liquidate your bankrupt and deceased debt, which is exactly what it sounds like, because their business includes collecting on a debt after the debtor passes away.

And that is the sleaziest way of making money imaginable, other than a petting zoo attendant charging 10 bucks extra to let you get to second base with a goat. -♪ Ooh, ooh, ooh, ooh... ♪ -♪ Ooh, ooh, ooh, ooh... ♪ And whenever the law did come up, speakers could be surprisingly glib. For instance, some debt buyers try to collect on out-of-statute debt, which is debt that has grown so old, you can no longer be sued over it.

And that is something that some states now require debt buyers notify you about in letters that they send. But watch the contempt with which 1 speaker dismisses those warnings.

Speaker 15: I'm a very sophisticated consumer. I don't know. Do you think we're... Is it really gonna impact your collection? I'd be curious to know.

But all those disclaimers you want in the letter, has it really negatively impacted collections? I'm not sure nobody wants to raise their hand. I looked at it and I know it doesn't, but I... I depose these plaintiffs in these lawsuits. They don't even read the letter.

Speaker 0: Oh, fuck you. No good guy business model has ever been based on the logic of, well, don't worry about people's legal rights. I'm pretty sure half these unsophisticated morons can't read. Right, guys? Right?

Am I right, though, guys? Look, it is pretty clear by now, debt buying is a grimy business and badly needs more oversight. Because as it stands, Any idiot can get into it. And I can prove that to you, because I'm an idiot, and we started a debt-buying company. And it was disturbingly easy.

Let me explain. Back in April, we spent $50 to incorporate a debt acquisition company online in Mississippi. And incidentally, over the internet is the best way to experience Mississippi. We called it... We called it Central Asset Recovery Professionals, or CARP, after the bottom feeding fish.

I became chairman of the board, and CARP set up this very bland website and dipped our toes into the debt market. And with little more to go on than that website, we were soon offered a portfolio of nearly 15 million dollars of out of statute medical debt from Texas, at a cost of less than half a cent on the dollar, which is less than 60 grand. For that amount, CARP would be sent the personal information, including names, current addresses, and social security numbers of nearly 9,000 people. So, we bought it. Which is absolutely terrifying.

Because it means if I wanted to, I could legally have CARP take possession of that list and have employees start calling people, turning their lives upside down over medical debt they no longer had to pay. There would be absolutely nothing wrong with that, except for the fact that absolutely everything is wrong with that. And that is why we actually decided to go another way. Because we thought, Well, instead of collecting on the money, why not forgive it? Because on 1 hand, it's obviously the right thing to do, but much more importantly, we'd be staging the largest one-time giveaway in television show history.

Because as best we can tell, the most anyone has ever given away on a TV show at 1 time to date was this. You get a car!

Speaker 1: You get a car! You get a car! You get a car! Oh, my goodness! Everybody gets a car!

Oh! Yes! Yes! Yes!

Speaker 0: Now, that giveaway was worth nearly $8 million, but we bought nearly twice that in medical debt. So instead of having the file sent to CARP, we had the seller send it directly to a non-profit organization which specializes in forgiving medical debt with no tax consequences for the debtor. And tonight, at my signal, with the power vested in me as chairman of the board of CARP, They will commence the debt forgiving process. So what do you say? Are you ready to make television history?

Let's do this! Now, clearly, this is only going to help the 9,000 people whose medical debt we bought. The larger issue is, we need much clearer rules and tougher oversight to protect consumers from potentially predatory companies like the 1 that we set up. But in the meantime, it seems the least we can do with this debt that I cannot f**king believe we are allowed to own, is to give it away. So are you ready to do this?

You are about to watch me give away $15 million. F**k you Oprah! It's done! It is done! I

Speaker 1: you

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Debt Buyers: Last Week Tonight with John Oliver (HBO)