Pittsburgh Legal Back Talk

Legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus.

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Scavenger Collectors are on the Prowl

Posted By Cliff Tuttle | July 14, 2008

Posted by Cliff Tuttle

It has become a common practice for credit card issuers to sell their written-off accounts in bulk at auction. However, other kinds of consumer accounts, such as automobile loans and unpaid balances on cellular telephone are also sold in this way. Long lists of delinquent accounts are assigned and frequently re-assigned. Although the gross amount of the bid for a package of written-off accounts may be millions of dollars, this typically represents pennies on the dollar. An individual account may be repackaged and sold two or three times. The buyers of these accounts, called “scavenger collectors”, know that most are uncollectable, but they expect to recover enough by vigorous collection efforts or in court to make the enterprise very profitable.

If you are contacted by someone attempting to collect such a debt, there are a few things that you, the consumer, need to know. First, the caller may not actually represent the legal owner of the claim against you. (For example, it may have already been re-sold to someone else.) Second, the claim may not be enforceable in court. Third, the caller may not know very much about the claim and may be eager for you to provide information.

Refuse to give or confirm any information to the caller. Don’t admit that you owe the debt. And by all means, don’t agree to make a “good faith payment”, even for a nominal amount. Instead, get the exact name and address of the entity making the claim.

If a scavenger collector sues you in court, call an attorney immediately. The chances are very good that the claimant cannot prove its case. They typically have only basic information concerning the debt and no supporting documents. As a practical matter, they usually can’t prove the case. They may even know that the statute of limitations (generally 4 years following the last payment in such a case) has expired. There may be other complete or partial defenses.

Bear in mind, that even if you do owe an unpaid debt, the calculation of the actual amount currently due may be incorrect. The plaintiff has the obligation to present sufficient evidence to prove that the balance is stated correctly. This is no small feat, since the balance was recalculated every month, taking into account payments and the accrual of interest, late charges and other fees. Interst rates and other fees often change from month to month. As a practical matter, if the defendant demands strict proof of the calculation of the account balance, the plaintiff must produce monthly statements of the account since the time when there was a zero balance.



CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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