John Oliver, host of HBO's Last Week Tonight, on Sunday took a detailed look at the business of debt collection and debt buying, then forgave nearly $15 million in medical debt. To do that, Oliver and his team reportedly first paid $50 to register a debt-buying firm they named, Central Asset Recovery Professionals (CARP), in Mississippi.
The show addressed the debt-buying industry and focused on debt that is not owed or where the statute of limitations had expired. If the alleged debtor begins making payments on those bills, it may resurrect the debt, he pointed out. Oliver alleges that debt collectors and buyers are taking advantage of the sick and poor and using illegal tactics to get paid.
"With little more to go on than that website, we [CARP] were soon offered a portfolio of nearly $15 million of out-of-statute medical debt from Texas,” said Oliver. "So, we bought it, which is absolutely terrifying. Because it means if I wanted to, I could legally have CARP take possession of that list and have employees start calling people, turning their lives upside down over medical debt they no longer had to pay. There would be absolutely nothing wrong with that, except for the fact that absolutely everything is wrong with that.”
The asking price was less than $60,000 for $14,922,26 in debt - about 0.004 cents on the dollar. Oliver pointed out that purchasing the debt would give CARP the names, current addresses, Social Security numbers and amount owed (or previously owed, as the statute of limitations had expired) for nearly 9,000 individuals. Rather than try to collect on the debt, Oliver decided to stage the "largest one-time giveaway in television history." CARP had sent the debt to RIP Medical Debt, an organization that specializes in forgiving medical debt without leaving the former debtor with any tax consequences. In a blog post on the RIP website, the organization said that because of Sunday's show, "there are a lot more of us now privy to this collection industry practice and the debt treadmill it creates. In a painfully hilarious (debt as funny? Somehow, yes) piece, John Oliver triumphantly Out-Oprah’s Oprah in giving away valuable gifts."
During the show, Oliver touched on the Federal Trade Commission case against Williams, Scott & Associates and the recent CFPB settlement with the Pressler & Pressler LLP law firm. He also played hidden camera footage from February's DBA International conference.
Legitimate collection agencies and debt buyers repeatedly rail against the fringe factions of the industry highlighted on Last Week Tonight. DBA International, which represents debt buyers, and ACA International, the largest association representing collection agencies, have detailed certification programs and codes of conduct to ensure regulatory compliance.
Collections & Credit Risk will update this story with any official comments from the associations as they become available. Readers are encouraged to comment on this story or write Darren Waggoner at email@example.com. Comments may be used in a follow-up story.