Occupy Wall Street is deviating from its usual mode of operation. Having been criticized for its unclear agenda, the movement is shaking things up by launching an extremely focused initiative for the benefit of debt-ridden consumers.
Strike Debt, a branch of Occupy, kicked off the “Rolling Jubilee” project to buy and forgive the consumer debt that is often sold to debt-collection agencies.
Typically, when banks and credit-card issuers cannot collect on customer balances, that debt is sold to debt-collection agencies for a fraction of the balances. To make money, debt-collection agencies tend to harass and hound consumers to retrieve the full balance that is owed. The Consumer Financial Protection Bureau will start supervising debt collectors in 2013 and watch for predatory practices.
Like a debt-collection agency, Rolling Jubilee will seek to acquire uncollected consumer debt by paying pennies on the dollar, but it won’t ask consumers to repay anything. Rolling Jubilee is set up as a non-profit organization to collect contributions from anyone who is willing to support the cause and help those who carry debt that is owned by debt collectors.
As of Friday 3 p.m. Eastern time, the initiative raised nearly $295,000, which is expected to erase $5.9 million in debt — every $1 will help eliminate $20 in debt.
Rolling Jubilee says it won’t be able to help out specific people since debtors’ accounts are usually anonymous and packaged together with other debtors’ accounts. But, the initiative would provide welcomed relief to the lucky individuals who’ve been pestered by relentless phone calls and unsubstantial threats by debt collection agencies.
Furthermore, Rolling Jubilee’s nice gesture will help debtors improve their credit scores, which usually plummet whenever their credit accounts are transferred to debt-collection agencies. The event is recorded on consumer credit reports and it suggests irresponsible management of credit. Correcting the situation can increase the chances of obtaining major loans such as student loans and home mortgages.
“Together we can liberate debtors at random through a campaign of mutual support, good will, and collective refusal,” Strike Debt says on the Rolling Jubilee website. “Think of it as a bailout of the 99% by the 99%.”
Could this nice gesture — with its targeted focus — help rebuild the momentum of Occupy Wall Street?