Jon Oliver and America’s debt

image of Jon Oliver – Last Week Tonight – courtesy Uproxx

Following up on Monday’s post — Jon Oliver’s purchase of 15 million dollars worth of medical debt (which cost him only $60,000) has brought about a lot of chatter on the interwebs. To recap, the host of Last Week Tonight, purchased the debt in order to highlight the slimy business of debt collection. At the end of the show, Oliver forgave the debt calling it the biggest giveaway since Oprah’s famous car giveaway so many years ago.

The first complaint was that the debt, by the time Oliver forgave it, was not what the show claimed it to be.

“…The debt’s value when purchased by Oliver’s legitimate debt-collection agency, which was more than $14 million less than what the segment advertised when comparing the show’s giveaway to Oprah Winfrey.”

Turns out debt gets less valuable the more it trades hands because debt is constantly being devalued “…because you never really know how much of it can be collected.”, according to Slate’s Jordan Weissman.

Second, a company called Debt Collective claims Oliver show stole the idea from them.  A project the company calls Rolling Jubilee was born out of Occupy Wall Street and sought to “liberate debtors at random” by buying debt “for pennies on the dollar” and forgiving it.  In a blog post Debt Collective explained, a senior producer Charles Wilson contacted them and was interested in the project…

“They spent hours discussing the project, both how it came to be and the results, and due to Last Week Tonight‘s past coverage of pressing social issues and light activism, the organization was “under the impression they were interested in highlighting” their activist bent.”

As we now know, the show passed off the idea as an original one created by the show on order to one up Oprah.   Last Week Tonight has responded to Debt Collective:

“As we do for every show, we spoke to dozens of people and groups for Sunday’s segment. For the ending giveaway, we spoke to an array of experts, three outside law firms, and non-profits specializing in debt forgiveness, including the one we referenced in the piece itself and the Debt Collective’s affiliate Rolling Jubilee. We’re happy to acknowledge the helpful advice Rolling Jubilee provided us – which is why we made a point of giving them on-screen credit, along with our other advisers, at the end of Sunday night’s show – and we’re happy to thank them again now.” decided to go further in depth on the issue of debt on their website.  The post entitled The grimy business of buying and selling US debts  gives one example of the type of medical debt Oliver forgave:

“I was involved in a hit and run accident on my motorcycle. I was rushed to hospital in New York City where over a nine month period I had three major and one minor surgeries.

“Almost 10 years after the accident I went to hospital again to have a metal plate installed in my left arm.

“Over six years after the surgery, I started receiving letters from an agency demanding $159,714 payable to it.

“I tried several times to work this matter out with [the collection agency] but can’t seem to get anywhere.

“I am receiving endless calls which have me so stressed that I have problems sleeping. I have been working since I was 15 years old and always stayed away from making unnecessary bills. I had excellent credit until this expense came up.”

Medical debt seems to be the most common form of debt that has the highest likelihood of bankrupting a person.   The CPFB and ACA were suppose to prevent many of the tactics used to destroy a person’s financial life, but as the article and Oliver’s show points out the industry is poorly regulated.

In a related note: the conservative House of Representatives has begun its plans to overhaul the CPFB (Consumer Protection and Financial Bureau) and the law that creates it — Dodd Frank.  The law has strict penalties against predatory lending and restricts deceptive practices when it comes to debt collection.   Rep Henserling, who is chairman of the House Financial Services Committee has said

“Simply put, Dodd-Frank has failed, It’s time for a new legislative paradigm in banking and capital markets.”

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