Darren Waggoner

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Consumers lodged 70,951 complaints of violations of the Fair Debt Collection Practices Act by third-party debt collectors last year, 2.4% more than the 69,249 complaints received during 2006, according to the Federal Trade Commission's annual report, released March 21.

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When two credit card companies become one, a la Bank of America's planned $35 billion marriage to MBNA Corp., the theory holds that collection agencies are paralyzed with fear. The giant credit card issuer, for many, is the ogre atop the beanstalk mocking Jack.

The bad-debt resale market, once a shunned offshoot of the debt-buying industry, is now a multibillion-dollar business, growth fostered by a rise in specialty buyers and high prices that creditors are now commanding for bad debt.

Five national banks control 75% of Canada's credit. None is selling bad debt. Not Royal Bank of Canada. Not CIBC. Not Bank of Nova Scotia. Not Bank of Montreal. And not TD Canada Trust (although it did so quietly five years ago).

To consumers 18 to 34 years old, credit limits are like pocket change. Growing up in a bull market, they seemed unaware when the economy began to sink in 2000. They charged through the dot-com bomb and the subsequent recession without changing their free-spending habits.

In the consumer collections and recovery business, it seems odd to suggest too much information, particularly about debtors, could be a problem. Feeding software systems with all available data surely is the best way to separate lost causes from potential payers. Yet, data overload arguably led some collection shops and credit grantors astray, suggests Andrew Postell, director of collections for ChoicePoint, an Alpharetta, Ga.-based identity and credential verification firm that offers its Debtor Discovery product to the collections market.

For bad-debt buyers, memories of staging dog-and-pony shows just to attract a few dollars from timid moneymen are fading fast. Investors are now swarming into the industry, eager to drop money into buyers' hands-a trend that is

Lax credit card lending policies that drew the ire of federal regulators in recent years-culminating with the January release of guidelines urging issuers to stop the fire sale on credit-are being tightened, early signs show.