Credit Strategies

99% of Collections are Illegal

Collection agencies buy their prey in bulk. They pay pennies on the dollar for massive amounts of data on YOU!

They purchase and obtain consumer information from a mix of sources, primarily to locate individuals and assess the likelihood of collecting a debt. The information they buy or access generally includes names, current and previous addresses, phone numbers, employment details, financial history, and family contacts.

But they rarely buy the full debt chain (the chain of title) with the data they purchase, especially when acquiring large spreadsheets or bundles of accounts from original creditors or other debt buyers. The “chain of title” refers to the documentation linking each transfer of debt ownership from the original creditor through each seller and buyer, creating a paper trail that proves who legally owns a specific debt at any point.

Licensed agencies can access credit reports from companies like Equifax, Experian, and TransUnion, which include your contact and financial history. These collection agencies then pretend to represent the original debtor to obtain payments from you It’s one of the biggest SCAMS in the financial world!

In fact, most debt records are collected from outside sources – not the original creditor, who never sees a penny of the debt collected by these unscrupulous companies.

If a debt buyer lacks part of the chain of title (or chain of ownership), it opens the door to a legal challenge. You can question whether they truly have the right to sue. Missing or vague assignment records may cause the case to be dismissed—especially if you raise the issue early in the process – before it becomes a lawsuit or before it goes to court.

The requirement for debt collectors to provide documentation proving they have the legal right to collect, including documentation showing the chain of ownership, stems from the Fair Debt Collection Practices Act (FDCPA) Consumer Financial Protection Bureau’s (CFPB) Regulation F.

Practice in Debt Purchases

• In many cases, debt buyers purchase only minimal data—often just basic account spreadsheets with names, amounts owed, and limited details—without receiving full documentation of each prior assignment, sale, or transfer.

• If a debt is sold multiple times, ambiguities can arise concerning ownership unless each sale is documented with affidavits, bills of sale, or assignment records.

• Legally, to enforce a debt through litigation, debt buyers must prove a valid chain of title by producing documents such as bills of sale, affidavits of assignment, or contracts showing the transfer of ownership from the original creditor through each subsequent buyer.

Some states specifically require account-level affidavits detailing the chain of title for each assignment or sale in lawsuits and may require these as a matter of law or judicial procedure.

What Agencies Typically Receive

• Collections agencies may receive only assignment agreements and aggregated data, not the entire chain of supporting documents, unless litigation or regulatory verification compels thorough documentation.

• If challenged by a consumer, or if pursuing a lawsuit, the agency must be able to produce sufficient proof of assignment and chain of title to demonstrate standing and lawful ownership of the debt.

• The underlying data typically includes the debtor’s identifying information, the amount owed, and sometimes scant supporting records, but full original contracts, payment histories, or statements from every owner may not be included except by request or for court proceedings.

In summary, debt buyers generally purchase account data, not the entire chain of title, unless required for enforcement, but must be able to provide chain-of-title documentation upon challenge to legally collect or litigate the debt.