[user104658]

Originally Posted by UserSince2005

How do you wipe £1m with £100k. I don’t get it.

So in short;

Let's say a person owes a company £1000, and the company thinks they're never getting it back, they can SELL that debt to a debt collector for a reduced price - often a vastly reduced price - e.g. £100.

The idea is that the debt collector can then pursue that debt and so long as > 10% of people pay up, they make a profit. The rest will likely default and have their credit ****ed.

So (I assume) by setting up one of these companies... he can buy £1 million of debt from creditors for £100k, but instead of pursuing people for the full debt, he just writes it off.

But yeah that's how, basically. Predatory debt collectors make profit off of unpaid debts.