If you’ve ever had a debt in collections, you may have experienced your account being purchased by a debt buyer. Debt buyers are businesses in the financial industry that partner with credit issuers to relieve some of the financial loss that can occur from lending money, goods, or services for which the agreed payments are not received. Debt buyers purchase debt from creditors, and then work with debt collectors to recover those accounts. Most debt buying companies are privately held small businesses that operate on a state and/or regional basis, or in a niche market, but there are also a small number of large companies employing more than 1,000 individuals.
In this Money Chat, the goal is to provide an informed perspective of what debt buyers are and their role in the American credit system.