The Economy: Don’t Pick Up the Phone

The tanking economy isn’t exactly your fault, but America’s biggest debt-collection company — headquartered in Horsham — will still hunt you down

BARRIST GAVE ME a tour of NCO’s modern headquarters, a glimpse of the literal machine the company has become. Barrist is a big, broad-chested guy, with a salt-and-pepper beard and incongruous glasses. His voice is deep and Philly-accented. In NCO’s mailroom a truck-size machine was sorting envelopes, and a scanner zapped checks that had just come in that day, tiny personal checks — $50 whhhzzz beeep, $20 whhhzzzz brrreeep, $11.85 whzzzzz … something like a million payments every month. “It’s incredibly complicated,” Barrist said.
 
The business used to be more personal, more one-to-one, back in the days when Chuck Piola was driving around Center City in a Mercedes-Benz he called “The Beast,” pumping himself up by listening to Guns n’ Roses’ “Welcome to the Jungle,” parking the Beast in front of random skyscrapers on a whim and striding inside and selling them blind on the virtues of NCO. The story of NCO became a classic  fable of American capitalism: the story of men who had come from nothing, and were taking risks in service of a bold idea, and were working their asses off to make it happen, and were winning. Back then, most of NCO’s business came from doctors and hospitals, and most of the checks that came in were from people who either wouldn’t or couldn’t pay their medical bills. But in 1993, Hillary Clinton tried to create a national health-care program, and Barrist worried that NCO could go bust if she succeeded. So he diversified. He bought lots of little debt-collection companies that specialized in other kinds of debt — credit-card debt, student-loan debt. He also began to experiment with “debt buying”; a bank might package thousands of its old debts together and sell them for 40 cents on the dollar to a company like NCO, which might turn around and sell the debts for 20 cents on the dollar to another debt collector. If this goes on for years and years, the debt can become “zombie debt,” unmoored from the act of its creation (i.e., your trip to  Wal-Mart to buy that plasma TV), virtually unbillable, virtually impossible to collect.
 
Which brings us to “The Vault.” The Vault is the pulsing heart of NCO. It’s a room full of long rows of funereal gray disk arrays containing 20 terabytes of Social Security numbers and credit reports — all of it encrypted, Apocalypse-proof. Collecting debt in 2008 is about statistics, computers, robots. “Motion, smoke, heat and water detection,” Barrist told me, and pointed to the ceiling: “FM-200 fire suppression.” It really is just a numbers game now. NCO generates 500 million “consumer touches” every year. Five hundred million phone calls, letters, e-mails. This is why Barrist has several Ph.D. mathematicians at NCO headquarters, writing algorithms that engorge this massive universe of information — info from the Post Office, from phone books, from consumer credit reports, from the private records of NCO’s clients, from pricey demographic data — and spit out patterns. The patterns help NCO figure out how best to contact you, how best to get the cash in your bank account from one place to another place, so that it can go to another place, and another place, and another place. In here are some of the crucial, hidden gears of the consumer economy. This place is the Death Star, basically. And it’s boring. By design. It emits a low, pleasant hum.
 
When I asked Barrist about Tara Burkholder, the Army wife, he said, “I don’t know this woman, and I am not going to research any consumer’s account with you.” He cited Burkholder’s privacy rights. “Could it have happened? Anything can happen … but it doesn’t really sound like a story that could have happened in a call center that’s pretty carefully monitored.”  

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  • Maggie

    SHAME ON ALL THESE DEBT-COLLECTING COMPANIES. Shame on anybody who is so desperate or stupid as to work for them. And shame on the greed-driven credit card companies and others these companies collect for, with the usury rates of interest they charge. Harassing wives and children of people deployed to Iraq and breaking federal law to collect debts. Badgering dying cancer patients for a few dollars. Call after threatening call demanding money, stressing and eventually driving an 86-year-old widow to a stroke. (this actually happened to a lady I know)The list of abuses by debt collectors goes on and on.Small wonder fewer and fewer people worry about defaulting on payments. My children need food before Barrist and Piola need another Mercedes.And by the way if the USA had SINGLE PAYER HEALTH CARE FOR ALL –- real healthcare, not for-profit “insurance” — many if not most of these "debts" wouldn't be owed.

  • MattyMat

    Good story on the "Robo-Collector". I have my own story that involves harrassing debt collectors that has a rare, but happy ending.Back in the day, I used to work as a collector when I was going through college, and saw pretty much exactly what your story describes– unscrupulous behavior in order to collect debt– I even witnessed one collector threaten an old lady that "he will be dropping by" because he knew where she lived. And that worked– to the tune of 5 grand. I also learned the laws that are in place concerning debt collection– more specifically– California law. Fast forward to a couple months ago—I received a phone call from a debt collector that immediately started out with a very aggressive, threatening tone. I had not seen any paperwork on this "alleged" debt– and what the persons (I asked to talk to her supervisor) were doing were trying to get a verbal agreement for payments, which is binding in CA. I asked that they do not call me at this number agai

  • MattyMat

    again. The phone calls never ceased. Harrassment– against the law. I immediately called a debt collection legal service, logged all the phone calls, etc. and just yesterday received a settlement that erased the debt, payed for lawyers fees and put a little money in my pocket.There are laws people– harrassment is AGAINST the law– and you too can get your debt erased by these pathetic, any means nessessary debt collection firms. I know I did– …and to think— if they were only professional about it– I would have paid them. Oh, the irony.

  • Jeannie

    The tanking economy isn’t exactly your fault, but America’s biggest debt-collection company — headquartered in Horsham — will still hunt you down

  • Sharon

    Being on the receiving end of Mr. Barrist's billion dollar industry, I find it hilarious that I'm dismissed as one of those "people who made bad business decisions on how to spend their money." I went from being a single mom living in my car with two small children, to earning a college degree. However, that which was supposed to save me, turned out to be the biggest mistake of my life. After graduation, apparently, the "bad" choices I made included feeding my kids, paying the late fees to get my electricity turned back on & repairs on my 20 year old car so that I could keep my two jobs, in lieu of re-paying my student loan debt. The original $27k in student loans is now $70k (this is the arbitrary amount that NCO is garnishing my 30k a year salary for. So now, I go without eating a few days a week in order to pay my rent. Mr. Barrist has made a fortune since discovering that student loan debt cannot be discharged through bankruptcy, there is no statute of limitations on colle

  • sharon

    I wasn't done…Mr. Barrist has made a fortune since discovering that student loan debt cannot be discharged through bankruptcy and there is no statute of limitations on collecting. Even my social security can be garnished. Conflatulations, Mr. Barrist. You're a rich man. I read that you recently had to cough up four million of your own money to stay afloat. Careful, don't squander the profits from the business you inherited from daddy.

  • Clarence

    Mr. Barrist's employees have violated contract law: demanding payment where there is no evidence of a contract,third party adhesion contracts without disclosure are illegal, nondisclosure of terms of a contract are illegal. Refusal to identify the person demanding payment has no standing in law. Creating money, monetizing a line of credit issued on a persons signature is fraud.

  • Jennifer

    I would not pay NCO a dime directly. They are known not only for fabricating bills, but overinflating them, and not turning money over they may have legitimately collected to their client. These people need to be shut down. As far as the student loan, how about deferrals? NCO never gets a judgement unless the person owing the bill doesn't show up in court.

  • dave

    i got a new number, thought that it was just coincidense that i started to get these calls for a women i don’t know. maybe the lines didn’t get switch over or something, anyways. i informed NCO financial that i wasn’t her, so what do they do, mind you they haven’t addressed themselves at this point. they asked for my personal information to see they had an account for me. i can go on and on, not enough room for the texts.

  • Consumer

    If Congress increased the statutory damages from $1000 to $5000 available under the FDCPA, we wouldn’t have all these problems with debt collection agencies anymore. The federal CFPB has to step up and regulate debt collectors directly. There is no federal oversight.