Why do 95% of Consumers Default on Credit Card Cases?

Why is it that statistics show that 95% of consumers when facing credit card debt collections (including lawsuits filed against them) DEFAULT (meaning they never show up or dispute the “debt”)?

The answer is due to two factors: 1) Lack of Knowledge and 2) Fear.

I’m guessing the reasons are not surprising to anyone reading this post. Do you think the bad guys (shady debt collectors and attorneys) know these statistics and the reason the default rate is so high ? You BET they do….!

In fact, they are counting on you remaining in the dark, remaining scared and uneducated. They know that if you decided to educate yourself, the second factor, fear, would disappear as your knowledge level increases.

If you or someone you know was facing a shady debt collector, how would you react differently if you knew this fact, stated by a JUDGE no doubt:

“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a civil court judge in Brooklyn, who said he presided over as many as 100 such cases a day.”

Read the story HERE

Since I understand how the racket (yes it is a racket) works, it is still shocking to me that out of approximately 609.8 million credit cards held by U.S. consumers, and that fact that 2.93% of those consumers are 30 days delinquent, there are approximately 17,867,140 consumers that are ripe for the picking by shady debt collectors.

Lets do a quick test scenario. Lets say of those 17, 867, 140 consumers half were able to get “current” on their payment and the other half got further and further behind (60, 90, 120 days, etc). You would end up with roughly 8,933,570 consumers who are going to get targeted by those shady debt collectors and attorneys.

If 95% of those default when the debt collectors go after them, there are about 8,486, 891 consumers who are laying out there for those shady debt collectors to pounce on.

The 5% that fight back are usually left alone because the default rate is so high, the shady debt collectors don’t want to bother with those that actually know what is going on.

What would happen to the debt collection racket if only 10% (848, 689) of consumers that typically default decided they have had enough, got educated, and decided to fight back?

Can you imagine what would that would do to the “business model” ( yes, shady debt collectors have built a business model around consumer’s ignorance) was turned on its head?

You would see the debt collection racket make a drastic turn and the daily abuses would begin to disappear when those racketeers discovery that consumers are “…mad as hell, and I’m not going to take it anymore…..”

This is the power of getting educated and making a conscious choice to NOT be one of those statistics that shady debt collectors prey on, thinking they have another easy victim they can take adavantage of.

Ponder those numbers, and if you or anyone you know is one of those statistics mentioned above, let them know there are options other than defaulting and they really can fight back when they get the proper knowledge.

Leave A Reply (1 comment so far)

  1. Barrett Richards
    2268 days ago

    All I can say is WOW what a website you have! Being involved in the financial industry and familiar with the legal end of it lets me know I better get ready because you are going to make my job much tougher. I am fully aware your stats are accurate and summation is spot on and will keep an eye on you. Those that had any basic understanding has the ability to fight the claim and could win.