Sunday, November 2, 2014

Spreadsheets, Ex-Cons And A Karate Studio: Life At The Bottom Of The Debt Business : Planet Money : NPR

Many years ago I used to write extensively concerning debt and debt collection and how to deal with characters highlighted in this article. Though I no longer follow the topic like before, consumer issues are still something I do follow (recalls, predatory loans, for-profit schools.) This is a good look into the back-alley aspect of debt-collections coming out of my home town of Buffalo, NY.
A few years back, James Nelms opened his own debt collection business. He didn't have a fancy resume, or much money. He was an ex-con whose siblings staked him $10,000 to get his business up and running.

This isn't as odd as it may seem. Many debt collection agencies are small businesses, eking out a living in storefront shops. A few years back, when the world was going wild for debt, lots of people were getting into the business. All that debt meant lots of money to be collected.

By the time he opened his shop, Jimmy Nelms — almost everyone calls him Jimmy — had already been through a lot. He'd gotten involved in drugs, gone to jail on a gun charge, and worked as a debt collector at a big, corporate agency. It turned out, he was really good at collecting debts.

"I was one of the best," he says. "Walking in there, smoking like a pound a weed. And out of all those people, I was producing."

It didn't last. Just like some people on Wall Street went wild with debt and started going too far, some debt collectors in Buffalo started doing things that were blatantly illegal, like telling people they'd go to jail if they didn't pay.

Things were also getting out of control at the highest echelons of the debt business.

"Larry himself got debt from a broker way up the food chain who was making lots of money, who was basically selling debt he didn't own," Jake Halpern says. "Straight up theft."

Larry brokered a few deals where his customers wound up with this stolen debt.

"We let greed step in," he says. "We stopped doing our due diligence because the money was right there to be gotten. And we wanted it."

Spreadsheets, Ex-Cons And A Karate Studio: Life At The Bottom Of The Debt Business : Planet Money : NPR

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