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Paper Pushers: Story of a Debt Buyer Chapter 3

· Paper Pusher

Chapter 3: The Art of Deception in High-Stakes Debt Trading

My journey within the debt-collection industry has been nothing short of a roller-coaster ride, often marked by towering highs and devastating lows. One such incident that stands out involves a substantial lender, a fellow debt buyer, and a deal that soured, leaving a bitter taste of deception and betrayal.

The lender in question had a staggering $400 million in charged-off debt ready to be sold. Teaming up with another debt buyer, we seized the opportunity to bring this behemoth of a portfolio to the market. Our search led us to a particular debt buyer and servicer, who we'll call San Francisco Frank.

Frank, though interested, needed more funds. He had only 10% of what was required for the deal, leading him to seek external financing. Once he secured approval for the loan, it seemed like smooth sailing from there. However, when the time came for Frank to finance the deal, he stalled.

The delay made the lender anxious, causing them to explore alternative options. Meanwhile, Frank contacted us, saying the portfolio was now open for bidding in a trustworthy online marketplace. He proposed that if he got the approval, we could co-invest.

We negotiated the terms, and, eventually, we all managed to secure the portfolio, albeit at a higher price than initially projected. With the deal in place, Frank got to work servicing the file.

However, as the years passed, it became apparent that Frank was more interested in maximizing his own and agency fees than ensuring a fair profit share. As a result, our share of the profits dwindled to an embarrassingly low amount. The deal, which had started with high hopes and promises, ended up being a disappointing venture.

The hard lesson from this venture was a tough one to swallow. Trusting someone and giving them a chance to participate, only to be backstabbed and left with nearly nothing, was a bitter pill. It drove home the reality of the industry's cut-throat nature and the importance of being extremely cautious when choosing who to trust.


Chapter 2