It does help the person in debt though. Have you ever had that kind of debt? Where they call you ten times a day? You can’t get an apartment if they’re going to run your credit score. It hurts your relationships and makes you depressed. Owing a few hundred dollars to a collection agency can really affect your life in a negative way.
It was because of an overdraft fee, if you’re wondering- I checked my account balance at an atm machine, and it came up $1.50. But, unbeknownst to me the machine then charged me 2 dollars for checking. That was the last day of the month, so then I got hit with an extra overdraft fee, so now I was down about 100 dollars. I refused to pay it. They continued charging me overdraft fees every month for a few years then sent the bill to a collections agency, it was over a thousand dollars by then. This was all going on in 2008 while I was watching every J.P. Morgan banker get away scot free for almost tanking the world economy. I ended up paying the whole thousand dollars so I could get an apartment with my girlfriend.
About 10 years later I got sent 25 bucks as part of a class action lawsuit against the bank. Thanks, I guess?
