Credit Bureaus Selling Your Info to Debt Collectors?

TL;DR

Credit reporting agencies sell data to debt buyers, enabling them to strategically time debt collection lawsuits.

Transcript

• Hey everybody, John Skiba here. And if you're dealing with a debt collection lawsuit, you're probably thinking to yourself, this couldn't have come at a worst possible time. There's never a good time to be sued by a debt collector. But they always seem to hit right when it's going to cause the most pain. I'm going to tell you what, that is not by... Read More

Key Insights

• 📁 Sherman Financial Group bucked the trend by increasing the number of debt collection lawsuits filed during the COVID-19 pandemic, unlike other debt buyers who reduced lawsuits.
• 💁 Credit reporting agencies gather information from lenders, public records, and individuals themselves, compiling and selling it to debt buyers for more efficient collections.
• ⚾ Trigger reports provided by credit bureaus to debt buyers enable strategic timing of debt collection lawsuits based on changes in an individual's financial circumstances.
• 🛟 Credit reporting agencies have a significant impact on individuals' lives, although they are private companies driven by profit.
• 😒 Individuals have limited control over how credit reporting agencies use their information, as permission is granted through agreements with lenders.
• 💁 Limiting the information banks provide to credit bureaus may have unintended consequences on individuals' creditworthiness.

Questions & Answers

Q: Why do debt collection lawsuits often seem to come at the worst possible timing?

Debt buyers, armed with data purchased from credit reporting agencies, strategically time their lawsuits based on changes in an individual's financial circumstances, such as paying off a car loan or improving credit capacity.

Q: Are credit reporting agencies private companies or government entities?

Credit reporting agencies are private companies that compile and sell individuals' financial data to debt buyers. Despite their significant impact on various aspects of our lives, they operate for profit.

Q: Can individuals limit how credit reporting agencies use their information?

Individuals have limited control over how credit reporting agencies use their information since permission is given through agreements with lenders. Limiting what banks provide to credit bureaus may have unintended consequences, so it's crucial to weigh the potential impact.

Q: How can individuals protect themselves from debt collection lawsuits?

Awareness of high-tech strategies used by debt collectors, such as gathering and using information against individuals, is key. Seeking advice and implementing effective defense strategies, as discussed in resources like this YouTube channel, can help navigate debt problems.

Summary & Key Takeaways

• Sherman Financial Group, parent company to LVNV Funding and Resurgent Capital, increased the number of debt collection lawsuits they filed during the COVID-19 pandemic, unlike other debt buyers who reduced their lawsuits.

• Credit reporting agencies gather data on individuals' financial activities and sell it to debt buyers, allowing them to make more efficient collections.

• Debt buyers use trigger reports from credit bureaus to track changes such as paid-off installment loans, employment changes, address changes, and increases in credit capacity, in order to determine the best time to initiate collections.