When banks, credit card companies and other creditors aren't able to collect debts from consumers, they usually either hire an agency to collect the debts for them or sell the delinquent receivables at a discount. Asset Acceptance LLC -- a subsidiary of Encore Capital Group -- is one of many companies that purchase these receivables.
Asset Acceptance LLC Operations
Asset Acceptance LLC is a major player in the debt acquisition market. Rather than collecting debts on behalf of an original creditor for a percentage of the settlements it obtains, Asset Acceptance purchases past-due consumer accounts for a fraction of the balance owed on them and becomes the new creditor for many consumers. For example, suppose you have a $5,000 credit card balance and haven't made a payment for one year. Your credit card company may decide to sell the account, or the unconditional right to collect on it, for $100. As the new creditor, Asset Acceptance can then pursue a lawsuit against you and ultimately place liens on your property and garnish your wages. It may also bypass the costs of litigation and negotiate a settlement with you to pay $1,000, for example, instead of $5,000. As long as Asset Acceptance collects more money from you than it pays the credit card company for the account and spends on collection activities, the company earns a profit. The risk to Asset Acceptance, however, is that it collects nothing.