Michelle Singletary, a financial columnist for the Washington Post, has written several recent pro-industry pieces, extolling the virtues of consumers paying their debts. As she mentioned in her recent column, these pieces were prompted by a correspondence with a woman curious about a deal she had been offered by a collection agency. The correspondent owed $24,000 in past due credit card debt. She had been offered an opportunity to settle for $14,000. Should she pay all the way up, as her conscience was prompting her? Or should she take the easy way out, pay the $14,000, and save herself the full amount.
Pay the full amount, Singletary advised. And many consumer advocates jumped on Singletary for this advice.
Most of the arguments boiled down to: “The original creditor is no longer a part of the equation, since the debt was no doubt purchased from it.” Since the original creditor won’t receive a penny of the debt, having received payment for it all ready from a debt purchaser, the argument continues, who cares if the debt purchaser can’t recoup its loss. The debt purchaser took a gamble, and not all gambles pay off.
Singletary disagrees: “We've become a society so used to the system playing us that we feel justified in playing the system.”
In response to the question “Why play fair when Corporate America won’t?” she offers to reasons:
1) She sees a moral obligation in paying off the debt. “You contracted the debt, and the deal your creditor cuts to get that money shouldn't be your concern.”
2) She says that creditors are not playing as many games as pro-consumer/anti-collection-industry pundits might have you believe.
She closes her piece with the following thought: “This same principle applies to legitimate and legal debt collection efforts. It is none of your business what a debt purchaser paid for your debt. And it certainly is none of your business what commission a debt collector is getting to collect on money you clearly and morally owe.”