Much to the fear of the bill collector (an industry website announces "Debt Buyers May See Competition from Occupy Wall Street"), Occupy is entering their world.
They may -- or may not -- have to be concerned. OWS is certainly muscling (buying?) its way in, but with a "business" model that collection agencies and debt buyers would not have entertained in a lifetime.
It is not with the intention to enjoy the high profits, nor set up desks and phone systems and auto-dialers to chase down debtors and get them to pay up. That would be so... well, Wall Street. No, Occupy will handle this acquired debt in a much more interesting -- dare I say, revolutionary -- fashion.
The concept, as explained at their website, www.rollingjubilee.org, is simple and straightforward: Buy debt for pennies on the dollar, but instead of collecting on it, abolish it!
This popular -- or, is it populist -- idea has gone viral and already raised close to $200,000, and that is in advance of "The People's Bailout" variety show and telethon in NYC scheduled for Thursday, Nov. 15. Tickets to this event (the hottest in town) were sold out within 24 hours of box office opening.
Modest expectations by this Strike Debt working group? To raise enough money to buy and cancel out in excess of $2.5 million in personal debt. Much more more, if possible.
Will this finally drive a stake through the heart of Zombie Debt?
First, we need to understand the definition of "Zombie Debt" in the collections industry. These are accounts which are extremely aged and likely have been in the hands of agencies and collection attorneys for years but still remain uncollected.
Agencies will buy these accounts from each other and debt sellers for pennies on the dollar, take their best shot at collecting it at full-face value, along with add-on collection fees and interests that bloat the original amount owed. Accounts remaining uncollected are then packaged up and sold off to the next agency or debt buy for even fewer pennies on the dollar.
It becomes debt that only grows, and never dies.
Occupy's entry into this market and the approach it is taking will evoke a yet unknown degree of shape-shifting in third-party collections... one that is long overdue. At its best, its entry may even bring about corrections that many within their own ranks long have wished for -- to rid themselves of "bad apple" debt buyers and agencies whose practices have led to public outrage and increased governmental oversight.
Occupy itself will gain renewed respect, and rightfully so. A major, appreciative article has appeared in The New York Times. A Forbes contributor called it "An Occupy Wall Street Idea We Can All Get Behind." Thom Hartmann called it "a truly incredible show of mutual aid, by thousands of participants. The Guardian's Charles Eisenstein termed it "a genius move."
Think back to when Occupiers began their crusade against Wall Street excesses. However rag-tag the army, their cause was generally well-received by the general population. But, however potent the rallying cries as in "It's the 1 percent vs. the 99 percent," and "Banks got bailed out, we got sold out," the general population couldn't relate.
Today's Occupy -- now having celebrated its first birthday -- has returned to clarify and voice economic grievances, but this time centered around one or two economic issues that will be understood by and resonate most with fellow Americans. In fact, 99 percent of them.
Working diligently to identify the most extreme examples of controversial finance practices that cause the greatest amount of personal grief and public outrage, OWS struck pay dirt.
Debt, and the enforcers who buy it, sell it and collect it, will be that focus and the target.
Putting aside any initial laughter or disdain on the part of this unwilling object of OWS attention, exactly what does this campaign and its champions have to say to -- or ask of -- that industry? Will they respond to this as an attack? Will they choose to feel insulted? Will they see this as just one more avenue by which the media will kick us around?
Is this something the collections industry needs to fear?
As a thirty-plus-year veteran of that world, my answer is: none of the above. Providing, that is, debt buyers, sellers and agencies approach this positively and embrace it. However reluctantly, most of them -- and even the original creditors -- can appreciate the idealism behind this project, and none can fault its curious inventiveness.
Their real concern should be how to frame our response. We already have our first clues in the initial reader postings to their online flagship, www.insideARM.com.
"Interesting." "That's...hilarious."
"It seems it is only going to reward consumer (sic) that live beyond their means. I can't see how this is going to solve anything. Isn't this just another form of a bailout?"
"40 years in the business... this is the dumbest thing I've ever heard of."
"$500 is about all those Occupy 'people' have between them."
"Form 1009-C, Cancellation of Debt... Wonder if the IRS will forgive the debtors or tax them?"
This industry is famous for a defensive, even antagonistic response to criticism. If unwelcome news or attention becomes so bad that it cannot be blow off, they adopt a "complain, but comply" mode and/or hunker down and hope that it's the other guy who goes under the microscope and gets the publicity.
Just possibly, this may be a chance for the ARM industry to connect positively with the people and the press which have been so critical of them in the past. Possibly, just possibly, collectors and debt buyers can work with Occupy to help guide it in the right direction, keep it from making mistakes, and even supply (donate?) debt in the best spirit of this people's campaign.
When Occupy asks, "May I please buy some more debt, sir?"
Their answer needs to be in the affirmative.
Consider the benefits. This is a great way to get uncollectible portfolios off their desks. Not by reselling it to another debt buyer or agency to continue a cycle of pain, but by teaming up with Occupy to put these accounts finally and graciously to rest.
Rolling Jubilee will advise long-suffering debtors that at least one of their unpaid bills has been purchased by OWS, cleared at credit reporting agencies where possible, and abolished in full. Moreover, with the promise that they will never again receive another collection call on that particular bill.
Ever!
And just in time for Thanksgiving and the holidays.