Imagine having your life changed by a TV show host.
Not by winning a million dollars, or a new car. But by having that huge hospital bill forgiven.
That’s exactly what happened earlier this month when Last Week Tonight host John Oliver purchased and forgave $15 million in medical debt. The generous stunt was part of Oliver’s effort to draw attention to the troubling practice of debt selling and “zombie debt.”
Debt buyers purchase outstanding debt from creditors for pennies on the dollar. Sometimes that debt isn’t even legit, as the statute of limitations has expired. But if the debt buyer convinces the former debtor to make even one payment, the debt can be reactivated, creating “zombie debt” that has returned from the dead. You won’t be surprised to learn zombie debt is a huge problem in low-income and minority communities. Debt selling and even debt collection operates with minimal regulation. In 17 states you can buy debt without a license.
Oliver registered a debt buying business in Mississippi and was immediately offered the chance to buy $14.9 million in zombie debt for $60,000, or $.004 on the dollar. If even a few uninformed people made payments on their expired debts, Oliver’s company would be in the black.
Instead, Oliver forgave the debt. While Oliver’s publicists have been calling this the biggest giveaway in TV history – bigger than Oprah’s “you-get-a-car!” show – that’s a bit of a stretch as this money isn’t really owned.
But Oliver’s generosity is still meaningful. It means, at the very least, the debtors’ names will be removed the debt-selling merry-go-round reducing the chances any of them will be bullied into paying debts they don’t owe.
That $60,000 was a small price to bring national attention to a troubling issue – and to remind all of us not to reflexively write a check just because a guy on the phone says we owe a debt.
Kudos, John Oliver!