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1.3.4.4 Age of Purchased Debt

The most comprehensive data available about the age of debts being collected by debt buyers comes from a 2013 FTC study of the debt-buying practices of some of the nation’s largest debt buyers.174 This study found that nearly twenty-five percent of debt acquired from the original creditor, and more than sixty percent of debt purchased from other debt buyers. was over three years old at the time of purchase.175 More than thirty percent of the debt purchased from other debt buyers was over six years old.176

In a study of portfolios of debt for sale in an online marketplace, the CFPB found that the median age for a portfolio was five years after chargeoff.177 The CFPB concluded that a “substantial portion” of accounts for sale were likely to be beyond the statute of limitations.178

Regardless of the age at the time of purchase, debts continue to age throughout the course of the collection process. Filings with the Security and Exchange Commission (SEC) demonstrate that some debt buyers are collecting on debts for a decade or more.179

Footnotes

  • 174 Fed. Trade Comm’n, The Structure and Practices of the Debt Buying Industry, at T-7 (Jan. 2013).

  • 175 Id.

  • 176 Id.

  • 177 Consumer Fin. Protection Bur., Market Snapshot: Online Debt Sales 11 (Jan. 2017).

  • 178 Id.

  • 179 PRA Group, Inc. Annual Report on Form 10-K for 2016 at 35 (showing nearly $12 million collected in 2016 for accounts purchased between 1996 and 2006); Encore Capital Group, Inc. Annual Report on Form 10-K for 2013 at 66 (company received payments on collection accounts purchased prior to 1999). See also Encore Capital Group, Inc. Annual Report on Form 10-K for 2016 at 43 (showing more than $2 million collected in 2016 for accounts purchased in 2007).