Debt Collectors Have Made A Fortune This Year, Now They're Coming For More: ProPublica
'Debt Collectors Have Made a Fortune This Year. Now They’re Coming for More.' After a pause for the pandemic, debt buyers are back in the courts, suing debtors by the thousands. By Paul Kiel and Jeff Ernsthausen, ProPublica, Oct. 5, 2020. ProPublica is a nonprofit newsroom that investigates abuses of power.
Earlier this year, the pandemic swept across the country, killing 100,000 Americans by the spring, shuttering businesses and schools, and forcing people into their homes. It was a great time to be a debt collector.
In August, Encore Capital, the largest debt buyer in the country, announced that it had doubled its previous record for earnings in a quarter. It primarily had the CARES Act to thank: The bill delivered hundreds of billions of dollars worth of stimulus checks and bulked-up unemployment benefits to Americans, while easing pressures on them by halting foreclosures, evictions and student loan payments. There was no ban on collections of old credit card bills, Encore’s specialty.
At the same time, the pandemic compelled households to cut spending. Finding themselves with enough money to settle old debts, people responded to collectors’ calls and letters. Debt-buying executives couldn’t help marveling at their good fortune. All this created “a perfect storm from a cash perspective,” the CEO of Portfolio Recovery Associates, Encore’s main competitor, told Wall Street analysts.
After its record second quarter, analysts expect Encore to blow past $200 million in profit this year and reward stockholders with 40% earnings growth compared with last year. Portfolio Recovery is set for similar growth. The share prices of both have soared off their early April lows...
More, https://www.propublica.org/article/debt-collectors-have-made-a-fortune-this-year-now-theyre-coming-for-more
