Occupy Wall Street Launches Project to Buy - and Then Forgive - Consumer Debt
While the Occupy Wall Street movement has achieved one of its goals – the re-election of President Obama – the activist group is turning to another goal: the reduction or elimination of high consumer debt. Organizers of the Occupy Wall Street movement announced this week that they will be using an interesting technique to accomplish their goal: the plan to become debt buyers. However, they won’t be setting up collections call centers: once they purchase the debts, they will forgive them.
Called “Rolling Jubilee”, the plan is to use money from donations to buy distressed consumer debt from lenders at a marked down price, just as debt collection agencies normally would, and then wipe it out. The hope is that the liberated debtors will themselves contribute to the fund, "rolling" the jubilee forward, Business Insider is reporting this week.
The group has already started on its mission. It has reportedly purchased $14,000 in face value consumer debt for $500, forgiving the balances on all accounts. The group said on its website that it intends to directly compete with debt buyers and brokers:
“If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A MORE AWESOME GAME,” said the Rolling Jubilee website.
According to a counter on the site, the group has raised nearly $110,000 today (Tuesday, November 13) toward a goal of $2.2 million. The site notes that consumer debt is often due to family crises, and:
- 77.5 percent of American households are in debt
- 62 percent of bankruptcies are due to illness
- U.S. student loan debt is over $1 trillion
- One in seven Americans is being pursued by a debt collector
- 40 percent of indebted households use credit cards to pay for basic necessities
The group said that it did plenty of research before making its first move, consulting with attorneys, the IRS, and “moles” within the debt buying industry. The type of debt targeted is not known, but OWS mentions student loans and medical debt in its Rolling Jubilee launch.
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Edited by Brooke Neuman