chasing this down. >> oh, i have seen, he was dependent in public schools, director of public schools in springfield -- >> well, that's my best advice -- >> and he shared the same law office -- >> -- relationship. >> -- with abraham lincoln anyway. thank you. ... >> can i ask you a what if question? what if he had not been assassinated? with the south and reconstruction? >> johnson was a bad pick pick, was that he? and what is astonishing is two presidents had died already and abraham supported both

lincoln had campaigned for both men.850 and harrison's vice presidentmp. john tyler undid all of president john harrison's policies and he was not a whig, and he kicked over everything. this is something every x. whig remembers.cked over so lincoln's choice of johnsonhe -- i know why he did it. he wanted a unique immigrant. wi he didn't think he was going to win his reelection so it is a very dicey thing. he's looking for a way toection broaden the ticket, broaden theg space. and johnson was a brave man. he was a patriotic man. he was the only souther southerr to stay loyal but he onwas just boiling with recent months. a small man -- with resistance. a small man in a lot of ways. the fact of lincoln's murder ise

what makes the comparison between washington and lincoln ultimately impossible because lincoln's work was half done.tey it would be as if a diehardalf-o torey had shot washington after he returned his commission to congress in annapolis in 1783. and he still would have been the hero of the revolution, and manhood won the war, the man who had never seized power during the war. but the presidency would have been lost toring us. lincoln would've had acy was lo fallacious term. i mean, his first term, how could it be worse than his first term? it would've been extremely stressful. the only thing i can say, wou lincoln was a very good politician. he was very good at keeping the republican party together. even republicans disliked him, which many of them did, but

people thought he was stupid, people thought he was too conservative. benjamin wade called them white trash. it was just a lot of resentment. i could've done this all yesterday.an why did it take sod long, thisme kind of thing. and yet lincoln was never, there was never a successful rebellion in republican ranks against him. he was masterful at dividing and conquering among his rivals. he had genuine friendships with people who disagree with them. last speech he gives, both urges that the southern states participate in the ratification of the 13th amendment, and ra that certain black people be allowed to vote. so he is addressing both the ald

free man and the former rebels in a very farsighted and magnanimous spirit. booth to a lot. never underestimate john wilkes booth. he did far more than jackson. he struck the blow. is that it? okay. n that grim note -- [applause] >> every weekend booktv office programming focused on bouquet. nonfiction authors and books. keep watching for more here on c-spanhere onhere onc-span2 andr past programs online at booktv.org. >> up next on booktv, "after words" with guest host author nomi prins. this week jake halpern and his latest book "bad paper: chasing debt from wall street to the

underworld." it tells the story of a former tank executive andy for bank robber going into business together to collect unpaid bank debts but often questionable means. the program is about one hour. >> host: hi and welcome. i'm nomi prins, i'm here today with jake halpern, the author of a fascinating and horrifying new book "bad paper." j., welcome. >> guest: thanks for having me. >> host: this book is incredible and so is your story. i think the to really mirror each other. this takes place in buffalo, new york, a lot of it. you are from there, aren't you transferred that's right. i grew up there. my dad and his wife still live there. it's how i find my way into this world. >> host: you talk about a particular, many unsavory characters that are scrambling

to make some piece of the world and often have prison records and have been drug dealers and so forth. there's a fellow named jimmy that comes out here that seems to be one of the main characters of this nonfiction story. kenya talking about how you connected with him? >> guest: the way this got started was i talked to my mom a few years back and she told me she was being hounded by debt collector. she said i don't owe the money that he is saying i owe but i think i'm going to pay him just so he will stop harassing. which my mom is like no wilting lily, so i thought this is bizarre. i started googling it and saw there was a lot of this kind of going on and that actually the epicenter of that collection in general in the united states was buffalo. i had it in my head i was going to do a story actually from the collectors perspective and what's it like to collect debts, one of the challenges faced,

what is your life like? i pitched the story to "the new yorker" just their posting what did you think about this? i could probably get someone to talk to me. my editor said great, 5000 words, when can you give me a copy? i had nothing, so went to buffalo once and no one would talk to me basically. i want a second time and i still had nothing. i start to panic because i was on the hook for this story. i went on facebook instant message to everyone i went to high school with and then everyone my brother went to high school with and i get one message back from this guy who is jimmy's brother and a catching on the phone and he said basically you better get down to quick if you want to talk to me because my business is struggling and i don't know how much longer i will be open. if you can show folks how hard my day-to-day life is i will be satisfied. i hopped down to buffalo, showed up and jimmy was one of these

amazing characters, eloquent. i'm driving around in his car, going to church with him and being his family. that's my entry point. >> host: he had a struggle. you knew him growing up as well. you got to him through a set of correspondence through facebook and so forth. let's get your history in buffalo or the vista in buffalo, how it's changed from what you knew growing up and in your childhood to the kind of place, it's one of the capitals of debt collection in the united states. >> guest: buffalo was once a big industrial powerhouse. it had all these steel mills and industries and starting in the '70s and '80s when i was a kid, that all starts to fall apart. unemployment goes through the roof. a lot of these old anna eshoo jobs, collections feels that would. some adobe buffalo is so good that collection because even though the country has been

integrated recession since 2008, buffalo has been at since 1879 and people can connect with people are having a hard time. when i was a teenager even, this is starting to kind of take form but i don't think i knew about it if i went to high school with jimmy, we went to the same high school and he was supposed been integrated high school, we came from opposite sides of the main street. it wasn't until i start reporting this story that i learned when he was in high school his father was a heroin habit. after getting out of high school he became a cocaine dealer, gone to jail on a gun possession and allies could not have been more divergent. >> host: he is the entry point into the rest of the story. he has an interesting component of the store for something you call a package which seems to be

the crux of what you're chasing and what the debt collectors are chasing and involvement in the book. can you talk about his relationship, what the package is an avid open up the rest of this amazing story? >> guest: so the package is this one piece of debt that i follow through the book. it's helpful to understand that when i talk about debt being bought and sold, we are talking about an excel spreadsheet. you have the big banks, creditors, and they try for six months to collect on a debt. when they can't get paid to will typically sell off for pennies on the dollar to debt buyers. and those debt buyers will collect whatever they can and sell it to the next an and the t and then expect what they are selling is a spreadsheet, bare bones information. >> host: information on customers balances and vital? >> guest: a spreadsheet while debtors names, social security number, address, balance, date

the account was opened. maybe one or two other fields but that's basically it. we are being bought and sold an e-mail, sent by some drive. that is the paper but that's really all that it is. if you can imagine it doesn't take much for something to go wrong, for some of the fields to get mixed up, the amounts, and aims to get confused over someone to sell the same excel spreadsheet to multiple unsuspecting buyers for all collecting on it at once. ifalpa package, what i call the package, this one piece of debt that is about $48 million in its face value but which is bought for pennies on the dollar by aaron siegel. what happens is this gets storm. somehow he finds out from his collector, these are calling and saying something weird is going on with these accounts. it appears that somebody else

has access to this information and is collecting the money from the debtors on this package before we get to them. so at that point he called his fixer come a guy named brandon wilson who is an unofficial partner who is a former bank robber who has gotten into this business, helped him buy and sell debt but also help them solve these sorts of problems. it was brandon who then goes and tracks down the thieves that have gotten a hold of this debt and retreated. we can talk about the crazy showdown with the guns to get it back. but the world in which he must go through to retrieve that debt, that's the world jimmy and habits which is this kind of gray area of legality, kind of underworld world of buying and selling debt and a sketchy minute that exists in buffalo and in other places. >> host: this underworld has the hierarchy you mention. he have that sort of former thugs to a large extent at the

bottom, giving some of this paper that is perhaps being sold and resold. you talk about how paper has been stalled as well and then you sort of the level up through aaron siegel. he's an interesting character to me. talk about how you got to him and also he wasn't a thug. he grew up on the good side of buffalo. he had a wealthy family upbringing, lived in a mansion. so how did he come into this same business? >> guest: the story, the way i tell the story in the book is it starts with this guy aaron siegel and aaron grew up in a wealthy and very well-known and well-respected family in buffalo. he goes to wall street for a while as a banker. he does sometime in london and decides he wants to come home to be closer to his family. he ends up working in the office at bank of america in buffalo. around the time he comes back what's happening is that throughout buffalo entrepreneurs

are buying some debt, buying this paper, spreadsheets and opening up a shop where they hire a bunch of collectors. the profit margin, this is ready for the great recession happened to his profit margins initially are through the roof. he is buying a portfolio debt for 30 grand and in three months making 90 grand. he realizes he has done this amazing little mesh of the finance world -- niche of the finance world. the key to much of this success is he's got this apply to supply him with his paper at a really great price and it is really lucrative. the weird thing about this one is he is brandon wilson, a former armed robbers continues in prison but has reinvented himself as a debt broker who has this genius for finding paper that pays -- very collectible and isn't that expensive to buy. even though aaron comes from this very kind of more rarefied world and as this banking past,

he understands in this sector of the economy it's not unusual to have some kind of shadier connections, some guys are rough around the edges. he and brandon from this unlikely partnership and that's the starting point for the book, for the story. >> host: you talk about how when you're looking for this paper, aaron is looking for it through brandon, he buys a portfolio from his old firm, from bank of america that you talked about as being not so great a portfolio but for reasons other than fact it's been stolen and moved around the block many times testing the irony is the key to making a profit margin in this world is getting the paper. everyone is hunting for good paper. when he buys from his former employer bank of america, you would think this would be a respectable and as dependable as it could be. he feels that bank of america pulls a fast on you because you spend all this money, millions of dollars buying this piece of debt from bank of america, and

it turns out they are almost all senior citizens which of the smallest amount of disposable income. he feels bank of america failed him but the former armed robber brandon that he does business with kind of comes throug throur him in a way that his former employer doesn't. >> host: what does he do? >> guest: he's behind a ball when he buys this bank of america paper and it's all these senior citizens. he feels he's not going to give to turn a profit because he is invested all this money. he goes back to brandon and brandon specialist on what he calls crap. crap, brandon's definition of it is old that anyone thinks is worthless because it's been around the block a few times, it's been bought and sold a bunch, 10 to 15 years old but it still pays because maybe was sitting in a call center in brazil for five years and no one was working it. or maybe it. or maybe comes from a debt buyer that's about to go under and needs to sell it off cheaply.

brandon would find these deals. so after aaron buys the stuff from bank of america that puts you behind the eight ball, he turns to brand and says you've got to come through for me and help me find deals on this crap and other stuff you find. the package with we talked about before which is this piece of debt that gets stolen, the package is fantastic paper. it's really good. it doesn't -- he doesn't do a lot for it. it is paying off for him and then, of course, it gets stolen and he's like a all right brandon, go fix this. >> host: how did aaron come up with the money to buy the package? he did okay. he went back to buffalo. who was behind funding the initial purchases of some of these packages? >> guest: trans-nines story is he's a banker, new york, comes back to buffalo sets up his own small collection agency and with brandon self he's getting his paper that's really paying huge dividends.

he said what if i do this on a much larger scale? he makes a few phone calls, finds eight investors to give him $14 million to do a trial run. the thinking is if he can do with his $14 million what he's done with his own money, these 300% returns and whatnot, then he will do even bigger for the 14,000,014,000,000 will do a second round with 40 million, vigor and bigger. the problem is that there are several problems, one of which is the great recession occurred and he encounters many problems along the way including the theft of some of this paper which i chronicle in the book. >> host: basically before that or while that is happening he is in a hole. he is out some him out. he has investors on the other side squeezing him, they want their money back. you visited a couple of these investors. how are they feeling about it? what was this taken is and how much with depression have and

how much, was a portion of their own money? how much do they care what happened really? >> guest: it's funny because i did want to meet his investors and get a sense for what their take on this was. i went out to dinner one night with one of them. the first thing you have to understand is there's this strange sequence of events. the debtors are owing brandon is collecting on. brand is getting the money he owes aaron. aaron then those investors who gave him the money. everyone is beholden, everyone is connected by the same debt. when aaron goes to meet one of these investors, a fellow named joseph, he's totally anxious because he feels he will fail the sky and owe him money. it out joseph sees it is almost as he has just popped a million dollars, he's put money into tanning salons and parts. it was almost like an inducement.

when we were having dinner with joseph i said, do you ever think about this a good people whose deaths you are by? and he says, no, why should i? they made that financial choices. is my fault went to profit on it. he makes enough to baseball games except the pitcher pitches about bitching about her knocks a triple, is there that is somehow wrong for taking advantage of the bad pitch? that was joseph's feeling about the whole situation. it was kind of crazy to think that, i met some of the debtors and, a poor single woman living in st. louis connected to this, former armed robber from boston is connected to this. connected to this will be invested at all other lives are connected by this chain of debt but none of them really know one another. that whole aspect fascinated the. >> host: the way you write

about it is so clear. it's like we are there in your writing. you are an excellent writer and you are an on the evangelist as well as helps to bring alive these characters. and also the locations and which are meeting these people. you have at the top of the chain down to the bottom of the chain, the individuals that could really hurt and rolled over in this process. you talk about some specific individuals that are just numbers in this package, just represented as numbers. they have real lives and went and investigated and spoke to some of them, a woman named teresa, a woman named joanna who were at one point taking a credit and paying it. then things happen and they got involved in this whole vortex. what was that like? >> guest: what is being bought and sold here it's easy to think of it as almost some sort of commodity like coffee shares because you look at these numbers on sheets and this thousands. this one paid, this would didn't pay. you think this package is

several thousand lines on this excel spreadsheet are basically several thousand stories of people whose lives for one reason or another have fallen into financial ruin. i managed to get a hold of the spreadsheet for the package that got stolen and i was looking at and thinking to myself these are stories. these names and numbers represent something that has happened. i started reaching out to some of these people and explaining, i'm a journalist, i'm looking into this bad and ugly bestow and i want to hear your stories. most people just hung up on me but a few who are profiled in the book talked. what they said, teresa, she was a former marine. she defies whatever stereotypes you have of the data. she worked right through high school, helping her parents pay off their mortgage. her life comes apart after she gets out of them incorporate she finds out her husband is cheating on her. she kicks him out of house. she goes from being one income

to to encompass you still on the vehicle payments and the mortgage and she's behind on her bills. at the point she stops, the fees start kicking in on this washington mutual card which is the card is connected to the package. late-season over the limit fees. eventually she just can't pay anymore. it ends up being stolen and in the hands of these guys who don't actually own it. so when they teresa did know but about this one day she gets a call and says, you owe this money and you need to pay this right now or there will be legal repercussions. this is your chance to do it. the calls to increase the threatening. meanwhile, recess a job working a border patrol in the southwest and she doesn't have her credit in order, it's hard of a job like that because you can be

blackmailed or the liability. traces as i'm going to lose my job from what am i going to do? i'm going to pay these guys off so she agrees to pay $2700 off in several installments. she feels good about it that she's getting a top of it but when she makes a lasting and she's expecting to get some sort of receipt for what she paid, there's nothing. when she checks the credit reporting agency, there's no record of her thing. she asked him she was being people, why would you assume otherwise? they had all o all of her inforn is just a people who stole her debt. these are some of the people that aaron and brandon realized are paying the wrong guy. you are right, each one of these names on this package of debt that gets stolen are real people and the stakes couldn't be much higher. >> host: it seems there are so few rules or abilities for regulators to cover all of these different points you talk about, debt moving back and forth when it does.

people like teresa, they don't know what's going on. they are just afraid, they are paying because of the phone call to what kind of tactics are coming from the other side of the phone call? almost a third of americans in debt right now are in collections. so they may be getting these phone calls from some of these people that you talk about in your book. what is that like? >> guest: you're absolutely right, about a third of americans are in debt collection. when you're getting called by a debt collector basically what you get is to talk off. the talk of is the collector on one hand trying to persuade you to open your wallet to pay your bill. there is legal talk off, there's a legal talk off and a great area. the legal talk off we be talking to, this is the information, you of this amount, you need to pay this. how can we arrange this? you have to do this. the illegal tactic so when you -- they are basically threatening and laying, saying

we're going to take legal action, when that's not too big we are going to arrest you, seize your property. lies and kind of coercion efforts like that are not legal, and that happens a fair amount but if you think about it, it happens towards the bottom of the debt food chain. if you have this piece of debt that the banks to sell off to a fairly reputable debt buyer, they don't need to do that to get their money out of it very quickly but when that has been bought and sold six and seven times, what it has whittled down to the folks who haven't paid any of the previous six owners. the people who did that get are usually the people of the very bottom of the food chain. that's what they almost feel they have to make these very threatening calls and these illegal tactics to squeeze the money out of folks. often these are the small agencies that opened up, they do it in a close back up and open up somewhere else before they

can be caught by the authorities. i just want to make one other point which is that there's not a lot of regulation and law enforcement. is a change. the consumer financial protection bureau is starting to get more into space but within last bunch of years there has been much regulation. that helps explain why a banker like aaron we team up with a former armed robber like brandon. not only is branding getting good paper, brandon is offering him a service that regulators and law enforcement can't. which is when something goes wrong i will solve this problem for you because calling the police and calling the state attorney general and calling the cfpb is not going to get it done. you need me to straighten it out. i think aaron saw the truth in the. >> host: you make the comparison just in debt that you are desperate people on one side were trying at the bottom of the food chain to click debt and have desperate individuals who are getting these phone calls

and are paying because it sounds scary. you have very little regulations particularly of the bottom part of this chain. so what recourse to some of these individuals have, or what can they do? where do they complain? what can you do if they have paid on a debt but it's gone to no one? it's condi basically some of these people estimate i was sitting in the shop one day and buffalo years ago and i was listening to the calls between the collectors and the debtors. that guy gets on the phone engine is time to collect and say you owe money on this payday loan. the guy said i just paid this payday loan of three months ago. i paid $900. it was probably a $300 loan. i just paid it off and she said, can you send me written proof with a receipt from that agency showing the proof? proof? the guys that come i never got that. jimmy said to them as medevac a, then i'm afraid you still owe money. he turned to me and said, this

is the only way i know that that guy is telling the truth. if i just forget every day who said they paid, i wouldn't be in business. but you got a sense of effectiveness of the guy on the other line who sounded fairly earnest he hit pay this off, and he didn't sound like he had much recourse. i think the calls will continue until you pay kind of thing. there are one or two things that are helpful for consumers to know. one which is know what the statute of limitations is your state is for wanted it is no longer legally enforceable. it very some three to six years but if you're getting a call on a debt that is four years old in the statute of limitations in your state is three years old, then you have no legal obligation to repay that debt. the other thing is after seven years, most negative reporting falls off your credit report. >> host: is it safe to say -- that's very interesting information for anyone out there getting calls. is it safe to say if you do get

a call on any level of threatening after five or six years about that debt, is it safe to say you should ignore the call directly there may be a moral obligation to repay it but i would be very, if it were me i would probably think twice about repaint it if i know in a year ago go off my credit report rating because it's been seven years, or if there's no legal recourse because out of step stat are beyond the statute of limitations. i would want to make sure the person on the other end of the phone actually owns the debt. the problem is there's not an eastwood figure that out but you could give the name of the company, check them out on the better business bureau website and get a sense for whether seems like a reputable company or not. >> host: you were on a called as part of your research for this book. you were in one of these collection centers and you got on the phone to sort if you like what it was to be a debt collector and have that conversation with a person of

the other end of the phone. what was that like traffic i was at brandon wilson's collection agency and we were up in bangor, maine, and i was just observing. he said to me, look, you've got to get on the phone. you can observe all you want which are not going to understand what this job is like unless you collect. i was kind of reluctant for a few reasons one of which i just didn't want to like hound people. but the other collectors who work for them started kind of haranguing me and saying you've got to try this but i said all right. they gave me hints at but i sat in front of one of these terminals and had it on an auto dialer so debtors whose information has been verified which is route to me. the first talking to me and it was a woman who owed $450 on her cell phone bill. i said something like, ma'am, i see you of this $900 now with interest the we can give you a reduced rate. would you consider paying this? i heard myself saying it and i

thought i wouldn't pay me. that such a weak opening gambit. eventually we are talking about trying -- brandon is hoping i'm going to bury the dead which means i have so much empathy and what's going on with you in your life? are you working? we'll have some sort of connection and she will feel like she can open up and trust me. i'm trying to do this, and at one point she says, maybe i could write you a check but i don't like seize on that right away because i'm trying to marry her. then she hangs up. brandon is right behind me playing coach. he's like, look, you fail at this not because you didn't collect if you fail under because at the moment she offered to make that check, you should have said okay, so you're going to say me that check? yes. and you're going to sit in the middle of the month? yes. because in brandon's psychology the minute that she promised to make that payment, we had kind

of gotten her because she committed to this. and now we could use that the next time we call her. anyway, so there were a few calls like that. i was a very bad collector but what i realized at the end was i could afford to be a bad collector like i'm married to a doctor. i make a decent living as a writer, but if i were desperate like some of these collectors i would've gotten wise quick to what he would've had to say indeed to make folks by. >> host: they are desperate. you are like sharks. that's basically what you depicted here in a very clear manner. >> guest: there are some collectors who do well for themselves. a lot of collectors are pretty desperate. i was at one agency where at the paid it in the week one guy made $115 another guy made $85. that's poor. >> host

>> host: talk about this underworld in buffalo, and going up to bangor, maine, into the on the phone spending with that sort of set of characters. you also talk about another pillar of this debt collection world, which is las vegas. you went there to do an investigation there and to do with some of these individuals and discover new things. what was that like? >> guest: i wanted to see how brandon wilson was behind this debt. if you remember brand is a former armed robber who works

for aaron and assigned these deals on paper. those deals are key to making the profit margins. in the course of talking to brandon about where he hunted or search for paper, he said las vegas. every february there's a big debt buyers convention. i go out there and hunt for deals. i ask them, can i tag along? he said sure. in february 2013-not to vegas and spent several days with the brandon. he was on the prowl for these deals. he wanted to get a few up buckets of debts that he could then bring home with him either to work at his own collection agency or he didn't flip and sell to other folks. it was interesting because when we arrived there that year, the market for debt was changing for two reasons. one the regulators were finally starting to crack down a little bit, and that was making some of the banks nervous about who's getting a hold of their debt. the other thing is that during the credit boom of the 2000s,

credit, everyone was getting a loan. now all of a sudden after recession people are becoming, creditors are more careful with the issue credit to which means a cost of buying these bad accounts that no one collects on goes up. brandon had to work that much harder to find deals. when he was there he was hunting for this paper patty called -- >> host: that's real interesting story. >> guest: when he gets there, word on the street or in the hotel lobby is that there's a parcel of debt that everyone is calling the paper and its debt that belonged to an agency out in california and as rank on the federal trade commission shut down because they were doing all kinds of illegal stuff, collecting and threatening and using data. after they shut down this agency, its assets went into a

court appointed receiver. the same way you would see his like a drug dealer's car and auction it off to raise revenue but the same thing happen. the assets his company had were largely their paper. identity were clicking on. the pace of this court appointed receiver was auctioning off this paper but i did was try to figure how much is this worth? it's a big piece of debt. i'm going around with granting anything his intelligence talking to folks, what's the word on this paper? is it any good? would you pay 1 penny on the dollar? i'm with him one day when he meets this woman who is another debt broker and she can grant wants to talk to her because she used to sell debt and she was intimately familiar with the workings of the company and she said, don't buy it. brandon says, i kind of wasn't -- had a bad feeling about it but why do you say i shouldn't

buy? she said, i have reliable information from the people that some of that debt was stolen after the office were shot down. and what's more some of the chains of approving legitimate ownership of this debt is not there. i have this information she going directly from people inside rincon but if you buy that debt to be in a world of trouble because particularly if it was stolen that means someone else could be working the same paper that you own. i eventually called up someone at the federal trade commission exit come is it possible some of this paper was told after the office was shut down? they basically said to me, i can't tell you with 100% certainty that some employee didn't walk out the door some of the paper before we shut that down. then i went i did more digging and i looked at the terms of sale that the court with sink and if you want to buy this paper, this is the agreement, the contract you have to agree to. and the contract said in pretty

clear language, we are making no warranties or guarantees about the accuracy or the validity of this paper that's being sold. so basically to sum this whole thing up, you have a federal regulatory agency shutting down a bad actor in the business, handing over its assets to the court appointed receiver. then there's an auction and they are selling off the paper and there's reason to believe that at least possibly they are selling paper that's been stolen. it was kind of mind-boggling, these are people are meant to be cracking down and solving problems might inadvertently be creating problems. in the end brandon decides, he just doesn't want to make a bid on this rincon paper that is owned, that is controlled by the court appointed receiver. >> host: i find that again horrifying that the ftc is closing down the shop, taking the paper, not doing anything

with respect to imagine that debtors that are involved on the other side of the paper because they don't know what's going on with their debt. they don't know it's going somewhere else. they could conceivably whether it's that paper or other paper be getting calls from collection agencies that bought it, stole it, whatever that they've never heard of that they never had a transaction with. you mentioned, for example, chase and washington mutual, two banks at the top of the food chain have papers, different from the rincon example. but at some point chase stops selling its debt because of regulations that have come into effect after the financial crisis and with a dodd-frank act. how does that impact -- first of all, why do they do at? where their lawsuits they could begin with bated what to do with how did that impact this whole chain of other characters that were involved in debt collection?

>> guest: right. so the title of the book is trenchant and that paper is paper that there's problems with and makes it hard to collect. there's a lot of bad paper of the because basically what the creditors like watching to mutual now, chase or bank of america or whatever, for you said just sold these spreadsheets out and not in a particularly carefully organized way to get buyers. the contracts that the banks create money so to the debt buyers clearly have these crazy warranties intimacy we are making no guarantee about the accuracy of this information. there are problems with the come all kinds of problems. i saw that first innocent people who were connected to the package. just to give you one quick example, there was the woman who was connected to this package who's a dead after going through the whole circus of what happened in buffalo ends up in the courts down in georgia. it appears on a credit report

and she's in danger of being sued over it. i meet with this woman and say, okay, what's the story with this debt quick she said listen, i was hoping you could tell me. i don't recognize his washington mutual debt that i supposedly owe. so i said okay, there's got to be an easy solution. let's call chase bank which nobody washington mutual and go ask them directly what's going on with this amount and with this that you don't recognize. so i called a spokesman for chase and they said i have this one right here, her name is julie. she has this on a quick report but she doesn't recognize the dead, the amount, can help us clarify? when this was sold off it appears maybe it was done in kind of, there were mistakes. a guy from chase goes back and says jake, we decided we're just going to write off julie's death as fraud. i said, why? he said, we don't have any of the underlying documentation that would give us confidence that this is, in fact, a valid

and accurate debt. they had some statements but they didn't have the original signed contract or proof of who the debt. i said, what do you mean you don't have at? u. r. the bank. shouldn't you have at? he said, well, when she's acquired washington mutual it was a very rapid process and information was lost. when chase acquired washington mutual that is one of the largest financial acquisition in recent history. you're talking about a pillar of the financial and they're saying, we don't have the paperwork. the mistakes that are being made that make this paper bad aren't just happening at the very bottom of the food chain, the debt food chain 40th street hustlers in buffalo. it's happening if there is -- the very highest level. >> host: one of the reasons i think it's the writing is just

so clear. you're coming out of not from sort of financial component but really from the ground up, from this underworld you talk about and from the individual's role in all of this and how people are impacted. the stories that surround the washington mutual chase merger and have been happening during the financial crisis of 2008 have come into focus as being about this sort of thing happening mostly with mortgages. with attachments to mortgage loans being lost with robo-signing and also those kinds of things. you bring up that is has been going on and has been going on not just in mortgages but throughout this entire credit spectrum with credit cards and other types of debt as well. >> guest: that's right. i think at this point people know that there was a lot of funny business going on with way that mortgages are issued, the way they were bought and sold, the white house were foreclosed

upon. there's been a lot less attention given to this idea of consumer debt with its credit card debt or pay day loans. there are the same sorts of problems. towards the end of the book, basic all those folks that are calling the debt collectors calling see the you've got to pick them they are basically relied on the top cop to convince you to pay. if they can't do that than all but it ends up in the hands of lawyers within the same on that debt. this is what goes to the court and many of the same issues they have with robo-signing with the mortgages they are having similar issues in court with credit cards. because basically the lawyers that are suing on this debt, the evidence they have is fairly thin. it's these excel spreadsheets. there's problems with excel spreadsheets. but what happens is there's a 90% no-show rate with consumers in court. if you think about it here, make

it simple, i'm a guy, jake, i can't democratic corporate a whole bunch of debt collectors calling. they have bought and sold my debt. i still get to it eventually they bring in a lawyer and the lawyer sues me for this amount. now most likely what they are saying is i owe is much higher than the original principle, three times higher because of the high interest rate. so if i go to court i can challenge that and said where did you get this number? the improve this is my debt? what's the breakdown of interest and principal? 90% of americans don't show up in court. the either don't understand what it means not to show up for a few there's no point. what happened is these numbers on excel spreadsheets 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 now garnish your wages but they don't have to call you up and

begged to be. they can go right to your bank account in clean it up. they can do to monthly work check. there's a new study out that shows 10% of americans between 35 and 45 are having their wages garnished every week. that's what's happening with that post and that's astonishing. you have basically given in this book and in this interview in trenton to very important pieces of advice for consumers out there who are involved in this debt collection process. one if some calls about the debt that over a certain breed of time you should be free suspect about the call and likely ignore it. and also as you mentioned that you should show up in court if you get somebody to court because he has a much better chance of writing whatever wrong you've been involved in that if you simple don't show up and go against you. >> guest: that is totally true. >> host: that in itself is a just as you provided through "bad paper," to the entire

american public so thank you for that. on behalf of the american public. you were in court that you mentioned savannah, georgia, and the kind of history that georgia has in the debtors prison, in the debtors idea of reinstitution and that sort of thing. you actually stood by some of these people. >> guest: it's interesting the issue was that originally georgia was conceived as a utopia that would rehabilitate the debtors but they would come from the debtors prison in england and come to the new world and get a fresh start and can't get out of the chains of debt and rebuild their lives. this very upbeat, optimistic view of reinvention kind of getting -- but the irony is that that's really not the case in america these days. we hear a lot about how americans can deplane -- can declare bankruptcy and get out

of the debt but there's a lot of people there's a lot of people who just have horrible credit ratings, therefore pay a higher rates on all kinds of loans they take out the they are having their wages garnished, checking accounts cleared up. it's quite a contrast to this utopian vision. that originally was found in the state of georgia. the other part of your question which is about going to court, and there is a fairly funny thing that happened to me which was that i i wanted to actually see what this process was like. so i followed the package of debt that i followed in the book i went to one of the court houses where some of the debtors connected to this package had been through. i just showed up to get a sense of it. i'm waiting outside the courtroom, and i start talking with this couple who was being sued over a credit card debt. they don't recognize the people that claim to own the debt, equator's name doesn't ring a bell for them. there's no documentation about the breakdown of that amount. we are trying to figure it out and this guy calls out their

name, a young lawyer, this is outside the courtroom to call something and walk over there and he says to them, i represent the people that own your debt. let's just hope is basically right now and we can work out an agreement and you can pin and we don't need to go before the judge. he reaches into his briefcase and pulls out this document that looks almost like a credit card statement but kind of like a mockup of a credit card said all it has is amount they owe, their name, address and in bold print it says, this is not an actual credit card statement. so they can looking at this to see what this is and they start talking to this lawyer, and at some point along the way i type up and i say, do you have any documentation to prove that you do in fact own this debt or any further information to get the breakdown of the debt? and he says to me, are you a lawyer? i said no, i'm just writing a book. he said, you can't represent them.

and, in fact, as this escalate these as i'm going to take you in front of the judge. so i've returned to the courtroom with this couple, and the woman who is on the hook for the debt, the judge calls are up and she calls can just calls me up as well. we get sworn in to give in like we are codefendants in this. it was like a novel or something. i am sworn in and the lawyer who is suing on this debt says, opening arguments and says, jake halpern here appears to be practicing law without a license and can you please tell me could face criminal sanctions for doing this? and i say, your honor, i just asked a question and figure out the process with these folks got in at about 15 minutes ago. this goes on back and forth for a little bit. finally, the judge says to this lawyer, what do you want to do about the matter of debt this woman owes? and he said, let me consult with mike leavitt picosat mix of hong kong comes back as a we are going to drop the case.

so at this point, me and a good look at each other like what just happened? we're scratching our heads, walk out in the hallway and there's a guy there who is from georgia legal services and he says basically to us, i will tell you what just happened to you said the magic word, and the magic words are prove your case. in other words, this couple simply by showing up in court and pressing back just a little bit asking for the barest, thinnest amount of evidence of the legitimacy of this debt and the detailed information of this debt was enough to make the person suing back off. the whole thing kind of crumbled. it was this moment where was so funny, the whole book i've been chasing this package of debt, this expelled osha excel spreadsheet to the streets of buffalo to the courts of georgia. the moment it becomes under the faintest scrutiny it vanishes into nothing. >> host: that's amazing. now, you mentioned earlier that the whole chasing of paper and

the whole debt collection business got to a larger height during the great recession after the financial crisis because people just simply have less money to pay a bit more debts that had accumulated. you talk about the term the shadow economy. for those people which i find very interesting because when use the term shadow banking it's usually about hedge funds, it's a cayman island actually type things. the shadow economy is something different. it's something that you discuss with respect to the people on the bottom of this. i want to know if you can talk about where you think those people and how that's going to evolve going forward from where we are now? >> guest: right. the way that i kind of cell into this was one of dani george and looking at the lives of these debtors who basically were being sued in court over this debt, i wanted to get a sense of what their lives were like. one of them told me that she

bought her car from a special court leadership that offered, cater almost exclusively to people with bad credit. so i went out to this dealership, and what became clear was that they were paying an enormous premium for the bad credit. in the words of this the words of discarded gum their money was worth about 70 cents on the dollar. and a car that should have cost $9000 would cost 13,000 of the cost 13,000 but, in fact, another debacle i followed, he actually had his bank account cleaned out there he was one of these guys that there was a judgment vote against them but they found him and they cleaned out every cent he had in his savings account, which was going to cause him, costume to default on his car payment which then compromised his ability to get to work but in this particular situation is he had a gps device on the engine of his car so the movie when yo you default on the

scarlet witch who's paying the premium on, boom, the engine was shut off and discard would be stuck on the side of the road. this is the world the people who inhabit who have really bad credit. i visited this housing complex where it was basically people who had very bad credit. they live in this world where they are paying the highest possible rates of interest, and there's basically no trust. creditors don't trust they're going to pay the bills so they get stuck with this. and on one hand you can kind of understand from the creditors perspective but these are very risky investments but it's also very hard to see people are so poor having much of their income devoured by interest and they're the ones we're getting kind of the most couched by this. >> host: when you talk to the ftc or the consumer protection board, have you gotten a sense that this is an issue whatsoever at all that they're trying to do

something about? helping the people on this side of the circuit and also just generally. the facts are such heinous interest rates and payday loans, use rem levels on other loans, credit cards that continue to employ people that have the least ability to pay. i think you mentioned one instance which is very logical where one of the people in your book says if i hadn't been hit with extra charge, the extra rate, i would've been able to do this. we could've negotiated. this is all not been this chain of shadowy underworld of financial stuff. to you since any understanding of trying to get to the root of this matter at the washington level speed? >> guest: i think the cpf be which was the brainchild of senator warren was a good move. they are starting to make a difference. they're going to have new rules coming out in about a year that will affect debt collection. they have been aggressive.

if i were in charge, i would give them more funding. a lot of this is going to come down to how much resources they have to can go after the bad actors are so the consumer financial protection bureau might have a budget of, i don't know, between four and $500 million. to put that in perspective you look at the amount of money that jpmorgan chase set aside for litigation reserves in 2013, the amount of money they put aside to defend themselves, the consumer financial protection bureau's budget is 2% of that. so you get the sense that they're doing good work but that kind of outgunned. i think that hopefully if anything comes from a book i hope it gives them a shot in the arm. another thing, i was on the phone field day with the justice department. they have this operation,

initiative called operation choke point. the idea behind this is it's hard to go after these payday lenders that do the worst stuff. so what the justice department has started to go after the payment processors. so if i may payday collection agency and i'm doing bad stuff, i still have to rely on a payment officer to take your credit card, your debit card information take the money. the justice department has started to say hey, payment processors, a few are dealing with these unscrupulous payday lenders, we are going to go after you. there has been pushed back about that because there is a strong payday loan lobby presence that is pushing back against it. i think that you need initiatives like that on a larger scale you see the change clean up the industry. >> host: hopefully after reading your book that change is eliminated and hopefully that will be a catalyst to lease

increasing the funding. towards the end of come how many years of research? >> guest: in one fashion or another i would say it's been about four years. >> host: you go back to buffalo. be guided to an epilogue on the characters, the individuals who can invoke on the debt collection side, and kind of see where they are at the end or the most recent period of time. what was that like? >> guest: the most surprising thing i encountered in writing this wrapup of the log was that what i found from teresa who was a former marine if you were never. she's the one who paid the wrong collector, ma the collector that somehow had gotten hold of forget by theft. i was curious about kind of where she was doing. just as the book was about ready to go, the final version, she called me up and said, you are not going to believe this but i just got a call from another

collector on that same debt, which was puzzling because when aaron cecal -- terrorist group was the rightful owner of it had discovered there had been fraud, he did the right thing which he retired the debt. he didn't sell it or put it in the hard drive. ..