Debt collectors ensure access to affordable credit
Jonathan D. Epstein’s book review of “Bad Paper” offers a one-sided view of the debt-collection industry.
Consumers’ use of credit is a cornerstone of the U.S. financial system. Without credit, businesses couldn’t borrow to expand. Purchasing a home, buying a car or even buying household appliances would be nearly impossible. In short, without credit, it would be difficult to operate in today’s society.
The review fails to mention the important role that the debt-collection industry plays in the economy. Roughly 95 percent of all consumers pay their debt off on time. Only a minuscule percentage of accounts end up in collection. Collection activities protect the overwhelming majority of consumers by ensuring they have access to credit at affordable interest rates and by mitigating losses that businesses would otherwise pass on to consumers in the form of higher prices.
Finally, while the debt-buying industry is heavily regulated at the federal and state level from a consumer protection perspective, the leading industry trade association, DBA International, has adopted a debt-buyer certification program. This program ensures responsible consumer protections through the adoption of uniform industry standards and best practices – the hallmark of which is greater transparency for the consumer.
It’s uncomfortable to talk about the collection of debt; however, affordable access to credit and collection of unpaid bills go hand-in-hand. The majority of debt collection companies nationwide operate in a responsible, professional and ethical manner.