December 15, 2015

The “Robin Hoods” of the Collections Industry?

Written By

Youri Pinard
Credit Professionals Recruiter

How the collection industry finishes off the poor American citizen who survived his hospital stay but is crumbling under debt. How can you liberate this same citizen of thousands of dollars of debt with a $100 donation to the RIP Medical Debt charity.

July 7, 2015. During an interview with Jerry Ashton in a small cafe in Union Square, Manhattan, I ask him about his underlying motives. Why he, a veteran of the collection industry, has jumped over the fence? “How about doing Good?”, he says with a grin.The game of the ones he call the bottom feeders (debt buyers) greatly upsets him and he knows how to shake things up.

Jerry Ashton is also a blogger for Huffington Post.

Jerry Ashton and his partner, Craig Antico, wanted to get back on the horse and create a permanent movement with the ambitious goal of collecting 14.4 millions$ that would allow to abolish 1 billion$ in medical debts, eliminating these debts for 300,000 families.

The mission of RIP Medical Debt is simple, but makes you think. I see it as a form of civil disobedience in an era where the powers against which we have to stand our ground are not really the States, who aren’t the rulers of the world anymore, but the world of finance and its tenets.

In order to understand its scope, we have to put the medical debts in their American socio-economic context where health care costs are prohibitive. It is also useful to put yourself successively in the shoes of the creditors and the debtor. Only through this way can we understand how an opportunistic industry transformed a flaw in our society in a golden business opportunity at the expense of a significant part of the population.

Losing it all because of your health: “How many people do you know in Quebec have lost all their savings and their house because they survived an illness?” Ashton asks me. None.

Another universe that looks like Middle Ages or a third world country: in the United States, the risk of chronic over-indebtedness after an unexpected medical issue threatens an important part of the population. Even people that have an expensive insurance policy sometimes end up unable to pay for their care after a serious illness.

According to Jerry Ashton, one in three families is facing astronomical medical debts, 60% of bankruptcies are linked to health care related debts, a type of debt that represents 50% of the portfolio of collection agencies.

Creditors that don’t forgive anymore
Credit professionals will tell you that the provider of goods or services is responsible to enquire the buyer’s ability to pay before giving him credit. If the creditor advances credit to insolvent people, he has to prepare for writing off parts of his accounts receivable and generally considers this the cost of making business, and that doesn’t prevent him from making profits.

After some collection effort entrusted, without success, to some professionals, they will forget the debt and life will go on. This is what any reasonable person would do, right?

No. Because by selling their accounts receivables to the collection industry for almost nothing, they renounce to their right to forgive. They pass on the Damocles sword to an industry whose mission is to exclude forgiveness, and to bet on the fact that if the debt is worth nothing for the creditor, it is worth gold for the person who is willing to enforce payment from the debtor.

The collection industry has inserted itself between the physician and the patient by taking away the write off and the forgiveness.

A social issue pushed back to the private sector.

Too confident in its tenets, the American society wasn’t able to provide access to health services to its citizens, letting the market take control of what other nations have decided to oversee.

A Canadian credit and collections professional, Youri Pinard wrote this blog about Jerry Ashton of RIP Medical Debt. This social problem was presented as a private problem: What to do with the people who can’t afford to pay? Help us with your compassion. Read Youri’s full piece