Occupy Wall Street has been on a bit of a shopping spree in the last year. But instead of racking up debt, they've been clearing it.
As The Guardian points out, Occupy Wall Street's Rolling Jubilee project, since its launch last November, has abolished $14,734,570 in debt from borrowers in the United States.The cost to the activists: around $400,000. Or less than three cents for every dollar of debt cleared.
How is that possible?
When individuals are consistently unable to pay bills (on loans, credit cards, etc.) and the creditor feels that collecting is a lost cause and doesn't want to deal with the legal action, an outside company can buy the debt in anonymous bundles at little cost. The idea is that buyers on the secondary market can profit by going all out to collect on people in debt and easily make their money back if they can get a fraction of the debtors to pay. The benefit for the original creditor is that they get some money back instead of getting nothing. Occupy Wall Street took advantage of the secondary debt market by purchasing the debt for pennies on the dollar and then abolishing the debt instead of collecting on it.
In the group's largest and most recent purchase, it bought $13.5 million in medical debt and cleared that debt, ranging from $50-$200,000, for 2,693 people, sending them letters like this.
The project is run by Strike Debt, an offshoot of Occupy Wall Street, which believes that people shouldn't go into debt for necessities like education, healthcare, and housing. Through the Rolling Jubilee project, its goal isn't just to help out individuals but to highlight the fact that it's legal to "trade in people’s misfortune."
"Rolling Jubilee has widely publicized the predatory workings of the debt-buying marketplace," the group said in a press release. "As a result of our work, many more people now know that collectors have only paid pennies for the debts they harass us for in full. Knowledge like this provides moral ammunition for confronting debt collectors and standing up to lenders."
Over 77 percent of American households are in debt and total U.S. household debt is at $13 trillion.
Read more: The Guardian, Strike Debt
Photo: Flickr/The All-Nite Images
This post was originally published on Smartplanet.com