Some debt collectors had a record year in 2020, and some debt-buying companies saw record profits. One reason for this success is that many Americans received stimulus checks, breaks on rent, and higher unemployment benefits. These benefits left Americans with thousands of extra dollars in cash and more willing to pay off their old debts. Another reason contributing to the success is the thousands of lawsuits filed by various debt collectors during the pandemic.

In August 2020, Encore Capital Group filed about 1,000 suits in Indiana and over 2,000 suits in the metro Atlanta area. It also announced that its previous quarter doubled the company’s record for quarterly earnings.

Regarding Encore’s competitors, Portfolio Recovery Associates filed over 3,000 suits in July 2020 in Chicago. Additionally, LVNV, a significant debt buyer privately owned by Sherman Financial Group, filed over 2,700 suits in Maryland in August 2020.

Generally, good times allow debt collectors to collect on more debt than expected, while bad times can cause many people to default on loans, allowing the debt collectors to buy the accounts cheaper.

These collection suits are most common among workers with income under $40,000 per year, particularly in Black neighborhoods. The suits routinely result in judgments, which in turn usually result in attempts at garnishment.

Sen. Elizabeth Warren, D-Mass, contributed input to the situation stating that, “[t]he same giant debt buyers known for fighting consumer protection laws at every turn have been raking in cash during this pandemic.” She continued emphasizing that, “[t]hey are now licking their chops in anticipation of profiting even more off families who have their hours further cut or can’t find a job, and can’t keep up with their bills or their mortgage. This is disgraceful and reinforces the need for Congress to protect consumers and small businesses from this predatory behavior.”

Overall, people in our society need to pay the debts they owe, but it was not morally correct for these entities to pursue these suits under the circumstances we were experiencing. These particular debt collectors should have been more considerate, like many others in the industry were.