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Paper Pushers: Story of a Debt Buyer Chapter 1

Debt Buyer Insider

· ARM Industry,Debt Sales 101,New Debt Buyer,Debt Collection 101,Paper Pusher

Chapter #1 out of #12

My journey into the world of debt collection kicked off when I engaged with a reputedly trustworthy and popular debt buyer—let's nickname him "Big Showboat Mike." I had a portfolio I'd brokered directly from a lender and was searching for a joint venture partner for investment. This portfolio, presented to me by Steve, a broker, was a substantial Casino NSF ("bad check") bundle. Although the debts were a few years old, copies of the bad checks were available to back up the portfolio—a rarity in an industry where debt documentation, especially those traded multiple times, is usually scant. Seeing a great opportunity, I put in a bid that was initially accepted.

I contacted my network to find someone with experience with similar portfolios, and Big Showboat Mike's name popped up. Having had a series of successful transactions with Mike, I could trust him. It's a fact that the debt collection industry harbors its fair share of unsavory characters—from scam artists looking to make a quick buck to outright crooks. But there are also plenty of trustworthy individuals. I had believed Mike to be one of the latter.

I shared the portfolio details with Mike, who expressed great interest. We chalked out a plan for his agency to attempt collections on the portfolio for 6 to 12 months, after which another agency would take over.

Before long, however, Mike stopped responding to my calls. I was keen to get his opinion on the portfolio, but he was nowhere to be found. Then, I was contacted by the seller, who informed me that they'd received a bid on par with mine and were giving the new bidder time to carry out due diligence on the portfolio.

Suspicions arose because I had shown the portfolio to only three other small groups, and I was certain there were no other interested buyers. I started digging, and through the seller, I discovered Mike's underhand tactics. We resolved the situation—I bought the portfolio and removed Mike from servicing it. The deal turned out to be profitable.

The debt-purchasing industry is unique in many ways—it's easy to enter at any level, rewards the successful, and teaches harsh lessons to those who fail. And while there are far too many unethical collectors and buyers, many wash out within a few years. Unethical practices in collections don't yield long-term profits. My experiences with Mike and others have taught me that anyone in debt collection who reneges on their word once will likely do it again. I can neither afford nor allow someone multiple chances to harm my business or reputation.

It's not solely about the money—it's also about partnering with a reliable company. We have no intention of repeating this experience and hope that by sharing our story, others can avoid similar deceptions. It's crucial to ensure your portfolio is legitimate and free from bad debt buyers like Mike, who are selfishly motivated and uninterested in mutual benefit.


Chapter 2