Important clarification: they sold your account to a collections agency. They made more than what you actually owed them by doing that, which is probably why they did that.
> They made more than what you actually owed them by doing that
This makes absolutely zero sense and does not happen. Why would the collections agency pay more for debt than it's worth? Why wouldn't they sell all their accounts then? Free increase in profits!
They make more, across all accounts, than they would in lost time/expenses -pursuing- those debts. But the collection agency did not pay them > X to collect on X. Far from it; the collection agency paid them a small percentage of the total debt for the 'right' to try and collect on it.
I've been pursued by a collection agency for a bogus account with a very low value. The collections agency tacked on a ton of additional costs. Hundreds of dollars. Related to them processing the account, and said that I owed them for it. So my understanding of how it works, and maybe I'm completely wrong, that's possible too, is that collections agency stand to gain far more than just the original amount owed, if they can add their overhead costs to the account.
>Important clarification: they sold your account to a collections agency. They made more than what you actually owed them by doing that, which is probably why they did that.
I had this experience some years back.
The obnoxious collections agent (no robocalls for that stuff back then) tried to bully me.
I just laughed and wished them luck getting a penny out of me. Never heard from them again.
Nothing on my credit report either.
Perhaps things are different now.
Something to remember is that corporations (including collections agencies) have to pay lawyers if they want to take legal action against you.
And at $250-$400/hour, unless the "debt" is in the many thousands, it's generally not worth it to sue.
Note that I'm not suggesting that anyone stiff their creditors. Rather, it's useful to keep that bit of information in mind when dealing with unfair/unethical attempts to extort money[0] from you.
[0] Especially when a "collection agency" (read legal extortion racket) purchases your "debt" for pennies on the dollar.
> Important clarification: they sold your account to a collections agency. They made more than what you actually owed them by doing that, which is probably why they did that.
Um, no. Collection agencies buy debt at a discount, and make a profit if they manage to collect the full amount. It would make no sense for them to buy debt for more than what is owed.
I can't edit my original post now, but I misread that the account grew from more than just $2 before it was sold. If the gym sold a $2 account to a collections agency, the collection agency buying it lines up with my experience of them tacking on hundreds of dollars in overhead costs when they try to collect.
This makes absolutely zero sense and does not happen. Why would the collections agency pay more for debt than it's worth? Why wouldn't they sell all their accounts then? Free increase in profits!