i could afford to be a bad collector. i'm area to a doctor and i make a decent living as a writer but if i were desperate like some of these collectors i would have gotten wise quick. >> host: they are all like sharks and that's basically what you depicted here. >> guest: a lot of the collectors are desperate. i was at the one agency where one guy made $115 another and $85 that's who poor.

>> host: you talk about this underworld in buffalo and going up and getting on the phone and dealing with that sort of characters but you also talked about another pillar on the debt collection world which is las vegas and he went there to do and investigation to deal with these individuals. what was that like? west coast is making the profit profit margins we are talking to brandon about where he hunted or searched for paper and he said las vegas i go out there and i

hunt for deals. so i asked can i tag along and they said sure so in february i will today guess and i spent several days with brandon as he was on the prowl for peace deals he wanted to get a few of what he called these buckets of back he could bring home with him to work at his own collection agency or he could benefit that can't sell to other folks. it was interesting because when we arrived back here, the market was changing for two reasons. one was the regulators were finally starting to crack down a little bit and that was making some of thing nervous about was getting a hold of their data. the other thing was during the credit boom, everyone was getting a loan and now all of a sudden after the recession creditors are becoming careful about who the issue the credit to such means the cost of buying

these bad accounts that no one collects on go up to this point brandon had to work that much harder to find peace deals. when he was there he was hunting for these papers. when he gets there, the word on the street or in the hotel lobby is there is a parcel of debt that belonged to an agency in california that's the federal trade commission actually shut down because they were doing all kind of illegal stuff and collecting and threatening and after they shut down this agency, its assets went into the court appointed receiver to say he would seize a drug dealer's car and auction it off to raise revenue the same thing happened that the assets of this company had were largely their paper.

the debt they were collecting on everyone is trying to figure out how much is this worth so i'm going with brandon and he's doing his intelligence talking to folks but you know, what is the word on this paper, how much did you pay what you pay 1 penny on the dollar, a tenth of a penny on the dollar? one day when he meets this woman who is another debt broker and brandon wants to talk to her because she used to sell debt and she was intimately familiar with the working of the company and he said don't buy it and brandon said i wasn't, i had a bad feeling about it but why do you say i shouldn't and she said i had reliable information from the people that some of that data was stolen after the offices were shut down and what's more some of the chains of title proving a legitimate

ownership is not there and i have this information she claimed directly from people and if you buy that debt you are going to be in a world of trouble because particularly if it was stolen. is it possible to set it to the paper was stolen after the offices were shut down and they basically said i can't tell you 100% certainty that an employee didn't walk out the door before we shut that down. so then i went and i did a little more digging and i looked at the terms of the sale. if you want to buy this paper, the contract you have to agree to it and the contract said in a pretty clear language we are making guarantees about the accuracy or the validity of the paper.

we have a federal regulatory agency shutting down the bad actor in the business of handing over its assets to the court appointed receiver and there is an auction and they are selling off the paper. and there is reason to believe that at least possibly they are selling paper that has been stolen and it is kind of mind-boggling, you know, these are the people that are meant to be cracking down and solving problems might kind of inadvertently be creating problems and brandon decides that he just doesn't want to make a bid on this paper that being controlled by this court appointed receiver. >> host: is part of fighting that they are closing down the jobs, taking the paper, not doing anything with respect to imagine those that are involved on the other side of the paper because they don't know what's going on. they don't know what is going somewhere else and they could conceivably there is a math paper or another paper be

getting calls from collection agencies that bought it, so what, whatever, but they've never heard of and they've never had a transaction with. you mentioned, for example, chase and washington mutual as the two banks at the top of the food chain's work that had papers that were different from the example that at some point, chase stops selling its debt to cut the regulations that have come into effect after the financial crisis and with the dodd frank act. how does that impact -- why do they do that and what are the other motives they could have been dealing with and also how does that impact this whole chain of other characters that were involved in the debt collection? >> guest: the title of the book is "bad paper" and that is one's there are problems with that make it hard to collect and there's a lot of bad paper because basically what the creditors like washington mutual

with bank of america for years they sold these spreadsheets out with a carefully organized way to the data by year's end the contracts the banks create when they sell it to them they have these crazy warranties that say we are making no guarantees about the accuracy of the information and the problems with it. there's all kinds of problems and i saw that firsthand. there was a woman connected to the package after going after the circuits in buffalo and the courts in georgia, it appears on her credit report and she is in danger of being sued over it and we said okay what is the story with this deck and she said i was hoping you could tell me. i don't recognize this fact that i supposedly of.

i said okay there has to be an easy solution. let's call chase bank that's now about washington mutual and we will ask them directly to going on in this amount and they suggested that we don't recognize and so i called a spokesman for chase and i say i have this one in right here. she hasn't signed her credit report that she doesn't recognize the debt or the amount. can you help us clarify it was when it sold off it appears maybe it was done in kind of a way that there were mistakes. he calls me back and says we decided we are just going to write off the debt as fraud. i said why? he said we don't have any of the underlining documentation that would give us confidence that this is in fact a valid and accurate debt. they have some statements that bought the original signed contract with the proof of who was paying the debt. i said what you mean you don't have it, shouldn't you have it and he said well when chase

acquired washington mutual it was a very rapid process and information was lost. that's one of the largest acquisitions in history and you are talking about a pillar of the financial world and they are basically saying we don't have this paperwork so the mistakes that are being made are not just happening at the very autumn of the food chain where you have the street hustlers in buffalo. there's easy there is easy to become every reason to believe it's happening and my assumption going into this is the banks aren't good to make mistakes like this isn't a safe assumption to make. >> host: one of the reasons i think it is so clear you are coming at it not from the of the ground up from this underworld and the individuals and how people are impacted.

the stories that surround washington mutual trace merger and everything happening during the financial crisis of 2008 has come into focus being this sort of thing happening with mortgages. with attachments to mortgage loans being lost. you bring up that this is and has been going on not just in the mortgages but throughout this entire credit spectrum of the credit cards and other types of data as well. >> guest: i think at this point people know there was a lot of funny business going on the way that they were bought and sold and the houses were foreclosed. there's been a lot less attention given to this idea of consumer debt. his credit card debt or payday loans but they are the same sort of problems and by way you see

this is when we get towards the end of the book so basically all those folks holding the debt collectors saying you have to pay this, they are lying on that talk to convince you to pay but if they can't do that it ends up in the hands of the lawyers and then this is where it goes to the court and they have the same issues with the mortgages they are having similar issues in the " with credit cards because basically, the lawyers are suing on his back the evidence is fairly thin. these exile spreadsheets. with tens if there is a 90% no-show rate. if you think about it to make it simple, i can't pay my credit card and a whole bunch of collectors call me into the bought and sold my debt and i still can't pay it. eventually they bring in the

lawyers and they sue the purpose amount. and now what they are saying is it is much higher than the original principal balance. it might be three times higher because the high interest rate. so, if i go to court i can challenge that and see where did you get this number and did you have proof this is my dad or what is the breakdown of the interest and principal? 90% of americans don't show up in court. they either don't understand what it means to show up where they feel there is no point and what happens is the numbers on the excel spreadsheet that are highly suspect to begin with then get stamped by the court and it becomes a judgment against you and then your creditor can garnish your wages. they don't have to call you and thank you to pay. they can get your vocal track and this is happening. there's a study that soundbite npr that shows 10% of americans between 25 to 35 are having their wages garnished every

week. so that's what's happening. >> host: so you've basically get into very important pieces of advice for the consumers that are involved in the debt collection process. one if someone calls up a debt that's over a certain period of time you should be very suspect about the call and likely ignore. and also as you were mentioning you should show up in court because you have a much better chance of writing whatever wrong you've been involved in them if you simply don't show up and it goes against you. >> host: test code that is totally true. >> host: that in itself is a justice that you have in "bad paper" that the american public. so thank you for that. on behalf of the american public, you were in savanna georgia and in the kind of history that you had with the

debtors prison and idea of the reinstitution intellectually stood by some of these people. >> guest: the history is that originally georgia was conceived as a kind of utopia that would rehabilitate the debtors of england and come to the new world and get a fresh start and get out of the chains of debt and rebuild their lives so this is a very upbeat optimistic view that the irony is that it's really not the case in america these days. we hear is how they declare bankruptcy and get out of debt but there's lots of people who are just they have horrible credit credit ratings and therefore they pay higher rates on what kind of loans they take a committee of their wages garnished, checking accounts cleared out. it's quite a contrast in this

utopian vision that originally founded the state of georgia. then the other part of the question that is without going to court, and there is a very funny thing that happened to me which was that i wanted to actually see what this process was like so i followed the package of debt that i followed the book and i went to the courthouse where some of them counted at the package that the package had been through and it showed up to get a sense of that so i am waiting outside of the courtroom and i started talking with this couple that's being sued over the credit card debt and they don't recognize the people that claim to own the debt and the amount doesn't make sense if there is no documentation about the breakdown of the amount. we are trying to figure it out. and this guy calls out their name. this is outside of the courtroom he calls up your called out her name and a walk over there and he says to them i represent the people that own your data. let's just basically settle this right now and we can work out an

agreement and you can pay me and we don't need to go before the judge and they start baynews9.com/tankful reaches into his briefcase and pulls out a document that looks almost like a credit card statement but like a markup of a credit card statement and all it has is the amount of io and in bold print it says this is not an actual credit card statement. severe kind of looking at this to see what it is and they start talking to this lawyer and at some point along the way i pipe up and say do you have any documentation to show that you do own this event or any further information that gives a breakdown of the debt and he says to me are you a lawyer and i said no i am just writing a book and he said you can't represent them and in fact i'm going to take it in front of the judge. so i returned to the courtroom with this couple and the woman that is on the hook for that act, the judge calls her up and then calls me up as well and we get sworn in together kind of

like we are codefendants in this and it was like a novel or something. so i'm sworn in and the lawyer that is assuming for the debt that he has an opening argument that says mr. jake halpern appears to be practicing law without a license. can you please tell him he could face criminal sanctions for doing this. and i said your honor, i just asked a question and i'm trying to fill up the process with these folks folks than it 15 minutes ago. this goes back and forth and finally, the judge says to the lawyer what do you want to give about the matter of debt that this woman does and he says says let me consult my client. he makes a phone call, comes back and says we are going to drop the case. so at this point we are looking at each other like what just happened. we walk out into the hallway and there is a guy from the georgia legal services and he says basically to us i will tell you what just happened.

you said the magic words and the magic words or prove your case. in other words, the couple by showing court and pressing back a little bit asking for the littlest amount of evidence of the legitimacy of the deck and the detailed information was enough to make the person back off and the whole thing crumbles. it was this moment where the whole book i've been chasing this package of death through buffalo and in the courts in georgia and the moment it comes under even even the little list bit of scrutiny it's like it vanishes into nothing. >> host: that's amazing. now, you mentioned earlier that the whole chasing of paper into the whole debt collection brought to a larger height during the great recession after the financial crisis because people just simply have less money to pay and they had more

than they had accumulated. you talk about the shadow in the economy for those people that's interesting because of the shadow economy is something different. i want to know if that is going to involve going forward where we are now. >> guest: when i was in georgia looking at the lives of these debtors who basically were being sued in court over the death i wasn't trying to get a sense of what their lives were like and one of them told me that she bought her car from a special car dealership that offered indicator almost exclusively to people with bad credit site and to the

leadership and they were paying an enormous amount for the bad credit and in the words of the car dealer, their money is worth 70 cents on the dollar and the car that was maybe should have cost $9,000 is going to cost $13,000. another debtor that i followed, he had his bank account cleaned out. if there was a judgment posed against him they cleaned out every cent that he had in his savings account which was then that caused him to default on his car payment which then could compromise the ability to get to work and his situation is he had a device on the engine of the cars at the moment he went into default on the car loan he was paying a premium on the engine was shut off and it would be stuck at the sight of the side of the road. so, this is the world about people inhabit who have really

bad credit. i stayed at this housing complex where basically it's all people that have really bad credit and they live in this world where they are paying the highest possible rate of interest and there's basically no trust. they don't trust that they are going to pay the bill and they get kind of stuck with this and on the other hand you can understand from the creditor perspective these are risky investment but it's also pretty hard to see people that are so poor having much of their income income devoured by interesting that they are the ones that are getting kind of the most gouged by this. >> host: when you talk to the consumer protection board have you gotten the sense that this is an issue whatsoever at all that they are trying to do something about helping people on this circuit and also just generally there are such heinous interest rates.

one instance which is very logical border one of the people in the book shows you that haven't been hit with the extra charge or the extra rate. events any understanding of trying to get to the root of the matter at the washington levels. >> guest: it is kind of the brainchild of the now senator elizabeth warren is a good move. i would give them more funding. a lot of this is going to come down to how much resources they

have to go after the bad actors. for the consumer financial protection bureau might have a budget of 2400 or $500 million, to put it that in perspective, if you look at the amount of money j.p. morgan chase set aside for litigation reserves in 2013 they have money to the decided to defend themselves the budget is 2% of that. so, you get the sense that they are doing good work but they are kind of out gunned here and i think that hopefully if anything comes from the book i hope it is a call to arms to kind of get them a shot in the army and the other thing i was on the phone the other day with the justice department to this operation this initiative called operation chokepoint and the idea behind this is a target to go after the payday loans that do this worse stuff so with the justice department is determined to do is go after the payment

processors. i still have to mandate payment processor. it is a payment processors come if you are dealing with the sensitiveness payday lenders we are going to go after you. we need initiatives like that. how many years of research? >> guest: in one fashion or another i would say that it's been about four years.

>> host: so you kind of go back and giving up a walk on the characters and the individuals involved on the debt collection side and. you kind of see where they are at the end of the most recent period of time what was that like? >> guest: the most surprising thing that i encountered writing this epilogue is that what i found from teresa who is the former marine if you remember and she is the one that paid doctor lecter that somehow got ahold of her dead isaf to -- by theft. i was curious how she was doing and just as the book was about ready to go into its final version she called me up and said you're not going to believe this but i just got a call from another collector on the same that.

he didn't sell it and he put it into a hard drive and rest in peace in theory and get someone was collecting on this back still. they had contracted teresa and i'm acquiring about these calls that you're sending because they are threatening to sue her. what is your claim to ownership of the debt. and i didn't think i would hear from anyone. when i ask about this he kind of says let me look into this. yes. this debt belongs to the portfolio that is purchased in the data broker in florida that was double sold and a lot of the numbers have been manipulated

but his attitude wasn't shock that this is the business you are just purchasing data and you never know what you are purchasing. it was a kind of chilling end to the whole thing because of course you're not just purchasing the data. you are purchasing the right to collect on pupils dead in a profoundly affect their lives. somehow or another, whoever stole it from aaron must have sold it to someone else as well. and to this day, teresa's -- it's just floating around in cyberspace and someone else will buy it and then try to collect on it. and somehow, that's more than anything else just seemed to speak to the chaos and the dysfunctionality of this industry.

>> host: if you have to get something to the consumers and regulators to fix this, what is the take away? >> guest: you have to be skeptical of who is calling you on the phone and you cannot assume blindly that they have a legitimate claim because the amount they are asking for is in fact accurate and you have to do your homework and make sure that there is a legal obligation to pay this debt and the equivalent of driving defensively, which your financial reaction to these calls. on the larger level, there's a few things that need to happen. one is there needs to be better enforcement and more resources in places like the consumer financial protection bureau and number two banks have to be more careful about what it about the pass along and make sure that information is correct and the result of documentation that there is supposed to be. and number three, there needs to be a change to the way the court system works because there is a 90% no-show rate and all these default judgment or creating these garnishments in all kind of problems. so there is a fair amount that

needs to be done. >> host: i want to thank you again for coming today to write this book and for bringing this information that had been to the people on all sides of the debt collection chain and what they can do and what should be done at the higher levels in the country and on a regulatory basis. i congratulate you for writing it. i loved reading it in a very quick setting. thank you for being on here and writing the book and the best of luck. >> guest: thanks so much. ..

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>> our speakers tonight lives in texas as a prolific writer has written for "time" magazine as well as the national headliners' award and has also written for "the new york times", "the boston globe"

between 2000 and 2008, and from the bush white house to karl rove to the infamous with dr. evil and this is included in a given unit deal with the doctor was up to. s.c. gwynne comes from a background as a french teacher in international banking then that led to a career in journalism was one of the few that are not writing about financial issues. and talk about financial issues and his last book empire of the summer moon

talking up the indian nation 19th century and then giving us a lot of latitude to check the topics for the night. and the redemption of stock -- the book "rebel yell" the violence, passion, and redemption of stonewall jackson" release today. to the first audience in the 50 cities to work. the first audience here is s.c. gwynne to talk about stonewall jackson. give him a warm welcome. [applause] >> tonight's imagine

stonewall jackson as he may have looked to the world one day before the civil war began. he is 37 years old you recall him gaunt and a six-foot tall about 5 inches taller than the adult manner -- man today is the lips that already seem to be tightly pressed. you'll find him shy but his silence is the most fracking thing about it. you find it difficult to engage him