Host a new book coming out and fall of 2014. Jake halpern is the author. What is that paper . Guest bad paper is about this world that exists just beneath the surface that we dont know about. You dont pay your jam bill, your book club, over a certain amount of time the creditors sell instead of for pennies on the dollar and drops of the aboveground economy. Then it is bought, sold, sometimes even stolen in this financial on the world that exists. This paper, a parcel of this debt, which they call paper gets stolen and becomes bad paper. My book is about a banker, a former banker and a former Armed Robbery go into business together and buy a billion and a half dollars worth of this creditcard debt for pennies on the dollar. It is up there, their partnership, and this said venture. The former armed robber tells into this underworld to track down who has possession of this step and try to put a stop to. And so it sounds crazy, but it really is actually the logical thing that happens in the absence of regulation, which is that the banker lens directly, i cant tell the attorney general, rely on the feds to bail me out. And the kind of strong men to protect my investment. In the study comes up with the form. Host walk us through a bad debt. Someone does not pay their credit card, 1,500, whenever. Cant pay up. Money is sitting there, what happens to it. Guest thats a great question. Of forced to foul of course it is a common thing in the Great Recession and the down the economy. The regular guy working, you lose your job, always major credit card payments on time, a responsible citizen. Of a sudden you have to make these hard choices, the utility bill, books for kids to the school, big credit card. You dont pay the credit card for six months, which happens to love folks. At that point the bank charges it off. Once they do they sell it for pennies on the dollar to debt buyers. All they do, your name, Social Security number, address, did you open, did you close the account, and they sell that for 100 of its value is some guy in ohio who now if he can collect a small fraction of that value, whenever he can collect the keeps. These files to me your debt, basically bought and sold to me male bond fund drives. The more times it is bought and sold interest is accruing on away. Sometimes they are double and triple sold. Three people think the on your debt and theyre all calling you. You pay one another person keeps calling you. That is where it becomes bad paper. There is no confidence in who owns it. A person doesnt even know. They assume it is the original creditor. They dont know if some guy who buffalo to a thousand up from buffalo but on the Street Corner that is that had an aspect of this world. Going about this mastercard account. You think it is the bank and is really just about a kind of entrepreneur who has bought it and is hoping to turn a tidy profit. Host what rights to the have . Guest it is a great question. Do you on this debt are not . And here is a really interesting aspect. There bought and sold. The bank sells it off. The not really concerned what happens after that. Down the road often these debts are sued on. What happens is someone gets a summons that says you come to court on this date or you we have a judgment against you. There is an 90 noshow. It comes before the judge. 7,452, even if the original that was 2000. Boehner. Theyre is a judgment. They can garnish your wages. Even if you show up in court, this is a crazy thing i saw, if you show up in court and simply say, can you show me the evidence that you do, in fact, on this debt, or is the proof of ownership . The case disappears because there is no proof most of the time. The banks and not selling the evidence when they sell off these spreadsheets because that would involve a significant amount of work of delving back into records. So often there is no proof of ownership. There is no kind of accurate accounting of the amount of this debt, the loans it. Again, the proof is when you go to court and cities magic words. I saw someone do this multiple times. Wheres the proof. It kind of evaporated. The whole system is in many ways of dysfunctional from start to finish. Host where is the underworld part . Guest when bank of America Sells off the debt, go back to your example, joe blow loses his job. Bank of america is not going the sell it to a criminal on the street. They will sell it to a dead fire in ohio. A company that has a car center. But from that it will sell to someone further down the food chain. The for the down the food chain inevitably what happens is that collectors become more aggressive and public alike because if you have to. Its time to get tough. Happens is toward the bottom of the food chain as the paper becomes cheaper and grinders, they call it, it often drops into the hands of folks who are less scrupulous. That is where it often does doubles triple sold in the have these people that know they have been sold this debt in an improper way. That is really where this kind of wonder world exists. What you have and what i saw is guys buying and selling this Consumer Debt on Street Corners and on drives, guys who formerly sold drugs and said killian know what, its not worth it to sell crack anymore. Its more work our while to sell debt because the penalties of less. We raised, we call that the white mans dope. The whole way it is packaged, the cartels and kind of works its way down. You never know who is supplying. He thought it was weirdly analogous to the way that the debt was being bought. And so this is what exists on this kind of people who cant get jobs elsewhere, can start businesses elsewhere are jumping into this. Theyre doing their best to kind of there is lot of shady stuff. Host you write in your book that there are more debt collectors and buffalo than there are. Guest buffalo is a place where they used to be a lot of industrial jobs. In the absence of the steel mills closing, of Service Sector jobs and that collecting jobs. Asked one guy that i met and buffalo, why is this driving . And he said, well, we have kind of been in a recession since the 70s. Talking to folks on the phone in place well commiserating about the financial conditions, we have been there all along. When the collector calls you, part of what they call the top off, the idea is to marry the debtor. Again, if you are joe blow and theyre out of work and im in buffalo work in this job i can say, hey, i feel your pain, you know, i live in a place for a lot of people are out of workers is bidding by. That empathy then becomes the basis so i mean, not of collection is bad paper. A lot of people in buffalo are trying to do it above board, but it is a difficult way to make a living. Host are the Credit Rating agencies involved in this . To they ever get the information . Guest the Credit Rating agencies will typically rely on actually the consumer. When you pay that debt off and the pace someplace in buffalo, give me some proof. It is then your job, if you can believe this, to get a copy of that letter and send it to the three Credit Bureaus and hope that they then put that on your report and it reflects your effort to pay off. There is no kind of integrated system where you paid off and it applies and your Credit Report in your all clear to go. The system is deeply fragmented and is part of why it needs to be changed. Host is a different state to state . Guest yes, it is. A lot of the enforcement comes down to the state level. New york is a pretty aggressive state Attorney Generals Office that goes after collectors. What they told me actually, some of the folks who were up to bad checks and buffalo were moving the georgia because the word was that there were more lax in georgia. If we have to close up shop here we move down there and can have far more latitude. Consumer Financial Protection Bureau protecting us, and they are doing something but theyre going after the big, National Operators and a lot of the worst behavior is going around at the local, state level. If he goes to georgia and there is no one their committee have to be a lot of rage. Host how Many Americans are caught in this . Guest something along the line of 30 million americans to have substantial amounts of credit card debt. Average of 1,500. So i think we depending upon where people are. And they have no idea exactly where theyre dead is be read this particular story in a boat to my talk to these consumers. They someone to call them that has all the information that would give me your you confidence, Social Security number, address. Okay. We will pay this. It didnt show up on the Credit Report. They start making calls. Do they pay . They paid bigeye this goal the debt. What happens and this goes back to my book, as the banker that bought this debt for pennies on the dollar he starts getting calls from collectors saying, hey, these debtors were talking to are saying they paid someone else. Somehow this debt has been stolen at which point the banker , one of their characters in the book calls as associate and says, you have to put a stop to this. He does is detective worked, gets a bunch of excon with guns contrast on the buffalo and confronts the guy that has is dead in his liquor store theres a showdown. And i was telling this to these consumers. Do you realize that this is a you paid . They were, of course, totally surprised. No one would imagine that these kind of crazy shenanigans exist in what is ostensibly a bank debt. Host where did the idea come from . Guest this book, i had written an article for the new yorker of a debt collector from buffalo. And it was the story actually about a young africanamerican guy, ben the present, gets out, only gabba can get is a debt collector. He is really trying to do it right, trying to follow the fair Debt Collection practices act and is a pretty of standing guy. I write about his life. Anyway, the story comes out and we get a call from the Production Company and its appeal and say, we want to turn this into an hbo series. Would you take the screenwriter back to buffalo and show him around . I said, the does the screenwriter want to stay in my parents house . Gap. So we go. Hes in the attic. My dad is making him dinner. The whole thing is very funny. I call all the people saying, hey, i have this guy working for brad pitt. No one wants to talk to me. Brad pitt, i got this long list. I am the handler, the babysitter taking the screenwriter route from meeting to meeting. One of these meetings is this former banker and his former Armed Robbery go in the business together and have this kind of amazing chemistry, france and dont trust each other. On listening to the banter. The screenwriter is taking notes. Guys, this story needs no fictionalize asian. This is nonfiction red meat. Would you consider letting me tell your story. The banker says yes. A former armed robert says, you want to tell my story, you come up to a bank or to my house and will talk. So i drove up. We had a facetoface. And you know, a kind of felt me out. Chickens. I was just off enrolling. That was the genesis of the story. Host your book is coming out in the fall of 2014. Will there be an hbo series . Guest i dont know. Ive had a few options. You need to in miracles in order for it to happen. Think were probably about a shy. Host of very quick preview of the new book by jake halpern, bad paper chasing debt from wall street to the underworld. You are watching book tv on cspan2. Television for serious readers. Here is a look at some upcoming book fairs and festivals happening around the country. From july 912 of th