Remember: Just because you have defaulted once or twice doesn’t mean you need to suffer from inconsolable collectors all your life. You may have defaulted on your credit card dues several years ago, but your credit report clearly states the debt was written off by the company who issued your card. You’re received nasty calls and letters from the collection agency to which your account has been forwarded, but that was it. They stopped bugging you, and you think you’re finally free from them. You may have to think twice.

Debt collecting is now becoming an investment opportunity. Investors are apparently putting up companies, and buying old debts from old creditors for pennies. Then, they go after these written-off debts to make some money. Some of these companies have even made it to the Fortune 500 list, considering their craftiness in the business.

Thus the term “scavenger debt collectors” – they purchase written off debts and call themselves collection agencies when they hunt people down. They can also disguise themselves as litigation firms, scaring people with their legal threats. Most of their procedures to collect are actually abusive, and violate laws under the Fair Debt Collection Practice Act.

Let’s say you owe HSBC $2000, but the bank wrote it off when they couldn’t get anything from you. After ages, a scavenger collecting agency can buy the debt from HSBC for only $100, but will come after you to collect the $2000 plus penalties and interest.

If you are certain that the debt has been written off, and you have your credit report to prove it, never ever admit to the debt being collected by the scavenger collections company. Do not pay the amount they are insisting on, and never send them any money. This will protect you from any legal action from them. They will only make money so as long as someone falls for their schemes.