Person A bounces a credit card payment to MegaBank, MegaBank asserts their credit card is in default and demands full payment immediately, A does nothing, MegaBank attempts to collect fruitlessly for ~4 months, A does nothing, MegaBank sells debt (principal + interest) to Agency X, Agency X attempts to collect fruitlessly for 18 months, A does nothing, Agency X sells it to Agency Y, A does nothing, Agency Y attempts to collect fruitlessly for 12 months, A does nothing, Agency Y sells the debt to Agency Z, A does ntohing, Agency Z attempts to collect fruitlessly for 12 months, A does nothing, Agency Z sells the debt to OWS for 5 cents on the dollar.

Each time I say "fruitlessly" read "They autodialed them between 2 and 5 times per week plus sent biweekly dunning letters."

For your added edification, while MegaBank, Agency X, and Agency Y all have no interest in the debt after it is sold to Z, many of them have very terrible recordkeeping practices, so it is entirely possible that e.g. Agency X will attempt to collect on the debt even after selling it, and potentially even after it is cancelled by OWS. Person A may not notice that this has happened, because Person A is likely a) delinquent on more than a dozen similar debts and b) Person A very likely has a very different level of personal responsibility as compared to many people in your reference set.

Much appreciated!

Now I'm wondering what kind of business model Agency Y and Z operate on

A variation of "Buy debt at 25 cents on the dollar, collect 40 cents on the dollar in interest and fees, spend 8 cents on the dollar for high school graduates to man the phones and 5 cents on the dollar for overhead.", with numbers adjusted depending on how toxic their average pool of receivables is.

If I recall correctly, during the robo signing debacle - some banks ended up losing control/chain of ownership on those mortgages.

So in that subset of cases no one even legally owns the debt, (but the banks still tried to assert control. IIRC the judicial system didn't take too kindly to their assertion)

Interesting, thanks.

They actually collect on some small portion of the debt, which, along with the sale of the remaining obligations, ends up being enough to pay their expenses and produce some amount of profit.