Post by Aditi Bagchi
John Oliver recently purchased and forgave about $15 million in medical debt. (See https://www.youtube.com/watch?v=hxUAntt1z2c) His objective was to draw attention to the dubious practices of debt collectors, as well as their “right” to buy information about people who once owed money and to try to collect money from them, even if the debt is no longer legally binding because the statute of limitations has expired. (What I will refer to as expired debt is also known as “zombie debt.”) If a debtor makes or promises an additional payment or admits obligation, the statute of limitations may actually be extended and the dead debt may be revived.
There is a fair amount of legislation to protect consumers from debt collectors. Debt collectors may not discuss debt with debtors’ friends or family and they may not threaten to sue on debt that has expired. Individuals have the right to demand that debt collectors not call at work or that they cease direct communications with the debtor all together. A lot of the worst practices by debt collectors are already illegal.
But not all of it. Why not flat out ban the sale of expired debt? Why not impose hefty fines on any attempted sale of such debt, including transmission of debtors’ information? And why not heftier fines on any attempt to collect expired debt?