Well, they certainly aren't making money by lending $100, waiting for a default and then selling the loan for $10.
But you are right, the article does make the claim that defaults are profitable. I missed that on the first read. So I guess maybe most defaults are just late payments or something? Do you have any more info on this?
If someone defaults, you keep charging 4000% interest, and three months later "cut a deal" to have them only repay half of what they now owe, you've still received 125% of the amount they borrowed. I'm not sure about the exact numbers, but you can see how even defaults could be profitable.
But you are right, the article does make the claim that defaults are profitable. I missed that on the first read. So I guess maybe most defaults are just late payments or something? Do you have any more info on this?