Profiting from buying debt—a process known as or distressed debt investing —involves purchasing delinquent or charged-off accounts from creditors at a steep discount, often for "pennies on the dollar". Several white papers and industry reports explain this practice in detail. Key Industry Reports and Papers
An extensive report by the Federal Trade Commission (FTC) examining how the industry operates, the types of debt purchased (mostly credit card debt), and the data buyers receive. make money buying debt
Buyers often receive only a spreadsheet with basic information rather than original signed agreements, which can make legal enforcement difficult. Profiting from buying debt—a process known as or
Some purchased debt is "zombie debt" where the legal time limit to sue for collection has already expired. Buyers often receive only a spreadsheet with basic
Unlike original lenders, debt buyers often have more flexibility to negotiate. They may offer settlements where the debtor pays only a fraction of what they owe, which still results in a profit for the buyer. Risks and Regulations
A report from the Consumer Financial Protection Bureau (CFPB) detailing how debt portfolios are traded on online marketplaces.