Last Week Tonight with John Oliver (2014–…): Season 3, Episode 14 - Debt Buyers - full transcript

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Welcome. I'm John Oliver.
Thank you for joining us.

Let us dive right in this week,
with the 2016 election,

or, as it's increasingly known,
America's fucktastic cirque de dismay.

The big news this week
surrounded Donald Trump,

a punch line that is quickly
becoming a nightmare.

Like if you said:
"take my wife, please"

and then she was actually
kidnapped by ISIS.

This week revealed
a somewhat startling statistic.

A new report from "USA Today"
found Trump and his businesses

have been involved in at least
3 500 lawsuits over 3 decades.

3 500 lawsuits ! Unprecedented
for a presidential nominee.

If each lawsuit were the basis of
an episode of "Law & Order",

they could sustain
all 456 episodes of the original,

all 389 episodes
of "Law & Order: SVU",

all 195 episodes
of "Law & Order: Criminal Intent".

And all 22 episodes
of "Law & Order: LA",

as well as every episode
of "The Practice", "Ally McBeal",

"LA Law", "Boston Legal",
"Night Court", "The Good Wife",

"Matlock", "Jag",
"Perry Mason", "Judging Amy",

"Guardian," "Public Defender",
"Owen Marshall: Counselor at Law",

"Harry's Law", "Courthouse", "Suits",
"Family Law", "Sweet Justice",

1971's "The DA",
2004's "The DA", "Reasonable Doubts",

"Damages", "Shark",
"Defenders," "Paper Chase",

"Head Cases," "Judd for the Defense",
all three episodes of "First Years",

and at that point,
you're still missing one lawsuit,

but you've also basically run out
of television shows about lawyers.

Meaning Trump's lawsuits exceed
the limits of the fucking genre !

There have been new developments
with Trump-related litigation,

after he complained about a judge
presiding over two cases against him.

I have a judge who is a hater
of Donald Trump, a hater.

He's a hater.
His name is Gonzalo Curiel.

He is not doing the right thing.

The judge, who happens to be
Mexican, I think that's fine.

You think that's fine ? Great news,
people of Mexican descent,

Trump thinks it is fine for you to be
a human being on this planet.

The judge in question was born in
Indiana. But that's not the point.

It was the judge's Mexican heritage
that made him unfit to judge Trump.

You're invoking his race when talking
about whether he can do his job.

I'm building a wall. I'm trying
to keep business out of Mexico.

- Mexico's fine, there's nothing...
- But he's an American.

He's of Mexican heritage and proud
of it, as I am where I come from.

where exactly are you from ?

Beause you look like you came out of
a clogged drain at the Wonka Factory.

I think that's great.
I think that's fine.

Think about what he's implying:

the judge is unfit to do his job,
because of his ethnic background.

This morning,
Trump took it a step further.

What if he was a Muslim ?

You've been tough on
Muslim immigration ban.

If it were Muslim, would you also feel
they wouldn't be treating you fairly ?

It's possible, yes.
That would be possible.

I would say that was the dictionary
definition of "bigotry",

except after this campaign,
definition of "bigotry" might become:

"see: Trump, comma Donald".

The judge he insulted

is overseeing cases involving
the controversial Trump University.

He ordered a cache of
documents to be released.

Which was exciting.
'Cause we looked into his university

when we did our piece
on Trump in February,

and it wound up on this very long
list of awful Donald Trump stories

that we didn't have time to delve
into, even in a 22-minute piece.

But, once we started reading
through these new documents,

we figured, let's take some
time to talk about it now.

Trump University is amazing. When it
opened, Trump made some big claims.

At Trump University, we teach success.
That's what it's all about.

It's going to happen to you.

If you don't learn from the people
we'll put forward,

and these are all people
hand picked by me,

then you're not going to make it
in the world of success.

"The world of success"...

It sounds like what Donald Trump
calls his bedroom.

"Welcome to the world of success."

"Enjoy a mint
and a nondisclosure agreement."

Trump University ran into
problems in several states,

starting with the name itself.

We started looking
at Trump University,

and discovered that it was
a classic bait and switch scheme,

starting with the fact
that it was not a university.

Holy shit. Trump University
wasn't even a university.

Which is enough to make you wonder,
what the fuck was in Trump steaks ?

God, it was possum, wasn't it ?
It was possum, you monsters !

The name was just the beginning.

Remember he had
handpicked instructors ?

According to his own depositions,
he did not select instructors,

and was unable to recall the names
of key faculty members.

It's probably good that
he didn't handpick them.

That would be dangerous.
Anything Trump's tiny fingers touch

turn into an ex-wife
or an abandoned casino.

And it doesn't stop there.

According to the testimony
by several former employees,

many instructors had no experience
buying or selling real estate.

One worked as a salesman for Lowe's,

and another had been
manager for Buffalo Wild Wings.

Or as I call it, B-dubs-dubs.

Even a former member
of Trump's own sales staff

testified that it was:
a "joke", a "facade",

and was
"just selling false hopes and lies".

Every university has sold some
of its students false hopes and lies.

It's just most of the time,
they call it a theater arts degree.

These new documents also include
several playbooks of sales tactics.

The room temperature was
to be "no more than 68 degrees".

Partly to keep students alert and
partly because Professor Wild Wings

doesn't want the ranch sauce
getting all gamy.

There are also instructions on how
to sell and upsell students

or, as the playbooks call them:
"buyers", on expensive courses,

with tips like: "if a client
is adamant about knowing the price,"

"simply say: 'our course range
from $29 to $35,000".

If prospects seemed wary, there
was advice for dealing with that.

"You must be very aggressive",
one passage from the playbook reads.

"If they complain about the price,
remind them that Trump is the best."

Laugh, but that is
the same technique

that Trump has been using to run for
president, and apparently it works.

These playbooks are rife
with sleazy salesmanship.

Employees were told to substitute
"thank you" with "congratulations",

so that the potential customer
ends up thanking you.

Which is pretty obnoxious.

If I started this show with:

"Welcome to Last Week Tonight,
congratulations on joining us",

you would quite rightly
turn it off.

You're thinking: what about people
who simply didn't have the money ?

Trump U didn't really
have a problem with that.

A set of playbooks for the sales team
coached them on how to market courses

even to single mothers
with three children who quote:

"may need money for food".

Money is never a reason for not
enrolling in Trump University,

if they believe in your product
they'll find money.

You're not doing any favor by letting
someone use lack of money as excuse.

"Lack of money is not an excuse" is not
what single parents need to hear,

it's what Trump needs to hear

when a fifth company of his
files for chapter 11 bankruptcy.

Some of the customers on the end of
that hard sell wound up feeling duped.

Like Carmen Mendez, who put
a $35,000 course on her credit cards

and was left disappointed.

I thought that I'm going
to be a millionaire,

because Donald Trump is a millionaire

and they were offering
a course for people to get rich.

This is the closest Mendez got
to Trump during the course.

A picture of her
with a picture of Donald Trump.

That's not a one-off,
'cause another former student said:

"We were told we would get to have
our pictures taken with Trump."

"It ended up being a cardboard
cutout of Mr. Trump."

Which is a perfect metaphor
for Trump University.

You're expecting the real thing,
but all you get is a tacky,

two-dimensional facade with
Donald Trump's face slapped on it.

But the most suspicious thing
is that the playbooks even include

instructions on what to do
if an attorney general shows up.

The answer is not "kick over a table
and get the fuck out of there !"

No, apparently
you contact April immediately.

And it also reminds you: you do
not have to show personal information

unless they have a warrant.

Which is suspicious advice
for a university employee.

I'm sure Harvard doesn't
tell its new professors:

"Welcome ! Here's a gun and a cyanide
capsule in case the fuzz show up."

"Don't let them take you alive !"

Donald Trump has broadly denied
the claims in the lawsuits.

His attorneys gathered statements
from satisfied customers.

To hear Trump tell it,
the school was very good value.

98% of the people that took the
courses, we have report cards.

They report carded on the course.
98% of the people,

98% approved the courses,
they thought they were terrific.

There is something instantly
fishy about 98 percent.

The only things that have that level
of approval

are dictators, Pixar movies
and Neapolitan ice cream.

Chocolate for the chocoholics,
vanilla for the borings

and strawberry for the perverts.

According to plaintiffs,
those numbers are so high

cause surveys were not anonymous,
and were filled out when participants

were still expecting to receive future
benefits from the program,

such as assistance or mentoring from
the instructor they were evaluating.

Listen to why one former student
gave it a good review he now regrets.

I really look at it like this.
Say you go to a nice restaurant.

Really expensive restaurant
and you eat this really gorgeous dinner

and the chef comes near the end,
asks you how you liked the meal

and you really loved it.

By the time you go home, you realize
you'd gotten food poisoning.

- What do you think about Trump U ?
- I felt like I had been poisoned.

I felt I was just duped
and poisoned and ripped off.

Worse than that is having
that same feeling and then realizing:

"Shit, he's got 3 years,
364 days left in his first term."

But perhaps the most valuable lesson
to come out of Trump University

is the one it is giving us in what's
behind Trump's campaign strategy.

The playbook tells
his sales people:

"you don't sell products, benefits
or solutions, you sell feelings."

That is what is happening now.
Crowds at a Trump rally

may not be able to point to a concrete
benefit or solution he offers,

but they know
how he makes them feel,

and that is jacked-up and ready to boo
any name that sounds vaguely Latino.

If you plan
to vote for Trump in November,

I'd like to direct you to a quote from
Trump University's old homepage.

"Take the risk, but before you do,
learn what you're getting into."

Donald, I could not have said
it better myself, so thank you.

Or should I say, congratulations.
And now, this.

And now,
Wolf Blitzer states the obvious.

We'll hear from the president,
cameras will be in there, obviously.

He's got Ebola, obviously
a source of great concern.

A solution, obviously, that prevents
Iran from developing a nuclear bomb.

An 18-point lead for Clinton
in South Carolina,

obviously that's welcome
news for her campaign.

Kills about a third of those
who get this virus,

and that's obviously
very terrifying.

Bringing in Nazis and Hitler
obviously, not appropriate.

If anyone sees them, obviously,
don't get near them.

Romney obviously is a Mormon.
Obviously a lot of media there.

Obviously we have a gas mask.

Moving on. Our main topic
tonight concerns debt.

It's the reason Nicolas Cage made so
many great choices in recent years.

Presumably, it's the fuel he uses
to power performances

like this one, from his
recent movie "The Trust".

Open it !

Open it !

He delivered that line like a child
on PCP opening birthday presents,

which he clearly hopes
are full of more PCP.

American households collectively
owe over $12 trillion in debt.

And right now, $436 billion
of that debt is seriously delinquent,

meaning it's 90 or more days
past due.

And it is not good
when anything is that late.

If your baby were
three months overdue,

you'd effectively just be
giving birth to a floppy toddler.

If you have debts,
you should pay them if you can.

Many people find themselves in debt
for no direct fault of their own.

Take Bob Weinkauf, a few years ago,
he was in intensive care,

and after four days,
the hospital told his wife

the insurance was not
going to cover the costs.

She said:
"the bill is up to $80,000 already"

and she said: "Mrs. Weinkauf,
you're responsible for this bill".

I was hysterical.
I thought: what am I going to do ?

I've worked my whole life.
Is this how my life is gonna end ?

That's terrible. Because some
debts are completely unavoidable.

This isn't someone spending
$80,000 on this Versace coat

that looks like a banana
fucked a Rorschach test.

No, this is someone
spending $80,000 to breathe.

But the fact that so many people
have money trouble is not surprising.

What may surprise you
is the extent to which

seriously delinquent debts have given
birth to a debt-buying industry.

When consumers get a call: "I'm
calling on your Bank of America debt",

you assume that it's someone
at Bank of America.

Bank of America sold off that debt
for pennies on the dollar years ago

and it's been bought and sold.

Most of the big banks do it
and not just banks but payday loans,

book club membership,
gym fees, auto loans,

every year billions of dollars
of this debt is sold off cheap.

Debt-buying companies like these,
that you've probably never heard of,

have amassed a huge
amount of Americans' debt.

The largest, Encore Capital Group,
which has these subsidiaries,

tell investors that 1 in 5 consumers
either owes them money now

or has owed them money in the past.

That means, statistically,

one member of Evanescence
owes or has owed Encore money.

I think
we all know who that would be,

it would be guitarist and backing
vocalist Troy McLawhorn.

But, but as you will see,

almost every step of how this industry
is allowed to operate is problematic.

Let's start at the beginning.

Let's say you have a $1000 credit card
debt that you can't pay.

Your bank might write off
the full $1000 on its taxes

and then sell it off to a debt buyer
for a fraction of the cost, maybe $50.

That debt buyer can then come after
you for the full original amount.

And if it can't collect,
it can then re-sell that debt

to someone else, who can still come
after you for the original amount,

or sell it for a fraction of what
it paid, and so on.

You might think the information
changing hands would include

a lot of verifiable information,
but you would be wrong.

When I talk about debt that's
being bought and sold here,

we're talking about
an Excel spreadsheet.

The spreadsheet will have debtor's
name, social security number,

address, balance, one or two other
fields, but that's basically about it.

The information about your debt may
be sold in an Excel spreadsheet,

which is troubling for two reasons,
first, nothing good happens in Excel.

Most of us go into a cold sweat
if we just open it by accident.

God ! Please, no !

Let me go back in time
and fix this ! No !

And second: in many states,
there is little obligation

on the part of the debt seller
to provide additional documentation.

Many leaked contracts have stated
the debts are being sold "as-is"

and "with all faults".

Which are weird terms to see
in a major business transaction.

They'd even be troubling in
the context of an OK-Cupid profile.

"As is", "With all faults", "Sometimes
I masturbate to 'The Little Mermaid'."

"It's the fish half
that does it for me."

Debt buyers
aren't always scrupulous

about checking their information
before collecting.

Which is why it is not surprising
to see incidents like this:

I opened the door and
an envelope was thrown at me,

the guy said:
"you've been served".

It was a debt that I owed,
right under $5,000,

it was with a company
I never had a card with.

It's humiliating, intimidating,
it provokes a lot of anxiety.

"Humiliating, intimidating
and provokes anxiety."

I've had a similar experience,

but at least afterwards I got to brag
that I finally lost my virginity.

It was some years after that.

It's not just being sued
for a debt you don't recognize,

buyers can harass you over debt
past the statute of limitations,

or that you've discharged through
bankruptcy, or that you've paid.

You may've seen stories like this
on news, it's got a fun name.

It's called zombie debt.
That's debt that you thought was dead

but starts to take on a whole new
life much like a zombie.

Buried old debt coming back to life.
It's called zombie debt.

Not the kind of zombies that terrorize
humans on The Walking Dead.

Old debt, thought to be settled and
buried, coming out of the grave,

if not to eat your brain,
then to give you a headache.

Yeah, zombies are fun. But the
comparison is actually quite apt.

'Cause just like on The Walking Dead,
zombie debt comes back from the grave,

is hard to deal with, and seems to
disproportionately impact minorities.

Once a company bought your debt,

whether the information
is accurate or not,

they are going to try
to collect on it.

They can either do that themselves
or assign it to a collection agency.

Many collectors work within the bounds
of the law, some behave like this:

James, give me my money back.
I want my money or else I'll kill you.

If you refuse to answer
the door to me, I guarantee you,

I will wake up every neighbor
in your entire building.

You're just a loser. Why don't you
just go jump in front of a train ?

You wanna be a man ? Or you wanna
hide like a little bitty mouse ?

We're gonna have your dog arrested,
we're gonna shoot him up.

That is not just horrifying,
it's stupid.

How are you going to put handcuffs
on a dog ? They don't have wrists !

The cuffs are going to slip
straight off their doggie paws.

Your plan is silly.

Some debt collectors
won't just stop at calling you.

Listen to an employee
of a New York debt buyer

explain one of his tactics
to a hidden camera.

One of the things that I like to do,
which is pretty nasty, though,

is that I'll find out where
somebody works

and I'll find out who
the owner of the company is,

find out their number
and call them at home.

Call the boss at home.
My favorite thing.

That's your favorite thing ?
That is the weirdest favorite thing,

and I am including
"whiskers on kittens"

and "brown paper packages
tied up with string".

That's a parcel bomb.
She's describing a parcel bomb.

What's wrong with the rest
of the kitten, you creep ?

Tactics like the ones that
man described are illegal.

Debt buyers have been caught
operating in disregard for the law.

Look at Williams Scott & Associates.
Federal prosecutors allege

they lied to debtors,
telling them they were part

of a "government task force
set up to investigate fraud".

Using this letterhead, featuring
a clip-art image of scales

and the logo of, for some reason,
the State Department.

And they even gave
their employees aliases,

like "Senior Investorgator Ace Rogers"
and "Joe Steele".

Which sound like the stage names
of understudy Chippendales.

"Sorry, Ace. Sorry, Joe.
Everyone's here again tonight."

"Please put your shirts on
and leave."

The debt-buying industry will tell
you that all these abuses are outliers

and that most debt buyers
work within the law.

One way they do that is that
they sue people a lot.

They are among the heaviest individual
users of our state court systems.

In some cities like
Newark, St. Louis and Chicago,

debt buyers filed more cases
than any other type of plaintiff.

If you're wondering how the lawyers
have time to review all those cases,

they often don't.

When one New Jersey collection
firm was sued,

they found that one attorney reviewed
up to a thousand cases a day,

reviewing one case
for just four seconds.

There are things that you can
review in under four seconds.

Lays biscuits and gravy flavored
potato chips, for instance:

"One, two, three awful".
There you go.

Or your mother's new boyfriend.
One Mississippi... not my real dad !

But judging whether you have
enough information to sue someone

should take a little longer
than that.

There is a strategy
behind filing so many lawsuits.

These companies bank on
consumers ignoring the lawsuits,

which means they're automatically
responsible for the debt.

They're dealing with 90 to 95%
of these lawsuits going unanswered.

They go unanswered, meaning people
don't turn up to their court dates

and the debt buyers win by default.

And the phrase "by default" makes
any situation sound less legitimate.

"Hi, meet Carson.
He's my boyfriend, by default."

"Hi, Carson.
I have a lot of questions, then."

If they win, in many states,

they then have the power
to garnish your wages directly.

And given all of this,
it is hardly surprising

the debt collection industry
can claim a dubious honor.

We receive more complaints about
this industry than any other,

and last year, consumers filed
over 280 000 complaints

with federal authorities
related to debt collection.

There aren't even 280 000
complaints on the Yelp page

for Hitler's bunker.

I'd actually like to add one more:

"Why is there a Yelp page for this ?
One star for you."

Regulators and prosecutors have taken
successful actions against big players.

States tightened their laws
concerning debt buyers.

But others, like these,
have all loosened regulation.

In Arkansas, in 2013, representative
John Vines proposed HB 2028,

which he claimed
didn't do much at all.

It defines the term credit card,
which apparently has not been defined

throughout our many UCC provisions.

So all this does
is define credit card

and other terms

that are germane to credit card
and credit card usage, 2028.

I know that sounds like
the world's most boring man,

describing the world's
most boring bill boringly,

but that's not all it did.

That bill defined the legal term
"creditor" to include debt buyers,

and established a "presumption
of correctness" of the information

in favor of the debt buyer.

A friendly deal for them,
or anyone, like a bank,

that would want to sell to them.

Representative Vines' wife
works for a bank.

He should've disclosed that,
but there was really no need to,

because the legislature was too
busy joking about it.

And is this considered
a pro-consumer bill,

or neutral,
or helpful for banking ?

I don't know it's going to have
any effect on the consumer.

It clarifies the term of usage
presently used in the industry.

If it's not good for banking,

I suggest that representative Vines
not go home tonight.

I want to make sure he's taking
care of the bankers.


If I don't take care of the bankers,

I'm gonna be takin' care of myself
in the shower the rest of the week !

Five, give me five, I'll take another
five, let's make it a twenty.

That bill passed the Arkansas
house, 83 to zero.

But perhaps what's most concerning
is that in some states,

there is a shockingly low
barrier of entry into this industry.

You can purchase debt
with no license.

And in these states, you can
collect on debt with no license.

There are places in this country where
you need to fill out less paperwork

to start collecting money
from people's pockets

than you do to collect
fish from a fucking lake.

The debt buyers' trade group,
DBA international,

claims the industry is working
to regulate itself.

It's developed a code of ethics it
calls "the gold standard".

It has an annual conference in Vegas,
which does make sense,

as Vegas is the "gold standard"
of shitty places.

Anyone can go to their conference,
though I wouldn't recommend it.

It's bleak. I know that because
we sent people with a hidden camera.

The footage they brought back
was fascinating.

Not fascinating like a good book.

More like a rat carrying a wedding
ring across some train tracks.

There's a story there.
And it's a fucking sad one.

From the start of the conference,
there was a defensive tone.

One seminar was titled:

"Debt Buyers Are The Good Guys:
How To Convince The Court".

Although their argument
for that seemed shaky.

What we're doing,
unbeknownst to most of the world,

is we're helping the economy.

We're securing moneys from sources
that wouldn't have been paying them.

We're helping people to restructure
debt and get their lives in order.

They're really helping
people get their ducks in a row,

but only in the "window
of a Chinese restaurant" sense.

This "good guy" conference featured
a free shoeshine booth

for a business promising to "liquidate
your bankrupt and deceased debt".

Which is what it sounds like,
their business includes

"collecting on a debt after
the debtor passes away".

That is the sleaziest way
of making money imaginable,

other than a petting zoo attendant
charging ten bucks extra

to let you get to second base
with a goat.

Whenever the law did come up,
speakers could be surprisingly glib.

Some debt buyers try to collect
on out-of-statute debt,

which is debt that has grown so old,
you can no longer be sued over it.

Something that some states require
debt buyers notify you about.

Watch the contempt with which one
speaker dismisses those warnings.

Who's going to read and understand
these words on this letter ?

The unsophisticated consumer ?
I don't know.

Is it really going
to impact your collections ?

Put all the disclaimers
you want on the letter

has it really make
an impact on collections ?

I am sure no one wants to raise
their hand but I know it doesn't.

I deposed these plaintiffs
and they don't even read the letter.

Fuck you.

No good guy business model
has ever been based on the logic of:

"Don't worry about
people's rights."

"I'm sure half these unsophisticated
morons can't read. Right, guys ?"

"Am I right, though, guys ?"

Debt buying is a grimy business,
and badly needs more oversight.

Because as it stands,
any idiot can get into it.

I can prove that to you.
Because I'm an idiot.

We started a debt buying company.
And it was disturbingly easy.

Let me explain. Back in April,
we spent $50

to incorporate a debt-acquisition
company online in Mississippi.

Over the internet is the best way
to experience Mississippi.

We called it "Central Asset Recovery
Professionals" or "CARP",

after the bottom feeding fish.

I became chairman of the board.
And CARP set up this bland website

and dipped our toes
into the debt market.

And with little more
to go on than that website,

we were offered a portfolio
of nearly 15 million dollars

of out of statute medical debt
from Texas

at a cost of less than half a cent
on the dollar.

Which is less than 60 grand.
For that amount,

CARP would be sent the information
including names,

current addresses and social security
numbers of nearly 9 000 people.

So we bought it.
Which is absolutely terrifying.

If I wanted to, I could legally have
CARP take possession of that list

and have employees
start calling people,

turning their lives upside down over
debt they no longer had to pay.

There would be absolutely
nothing wrong with that,

except for the fact that absolutely
everything is wrong with that.

And that is why we decided
to go another way:

instead of collecting on the money,
why not forgive it ?

On one hand it's obviously
the right thing to do.

We'd be staging the largest one-time
giveaway in television-show history.

The most anyone has ever given
away on a TV show was this:

You get a car !

My goodness !
Everybody gets a car !

Yes !

That giveaway
was worth nearly $8 million.

But we bought nearly
twice that in medical debt.

Instead of having
the file sent to CARP,

we had the seller send it directly
to a non-profit organization,

which specializes in forgiving debt
with no consequences for the debtor.

Tonight, at my signal, with the power
vested in me as chairman of CARP,

they will commence
the debt forgiving process.

So, what do you say ? Are you
ready to make television history ?

Let's do this !

This is only going to help the 9 000
people whose medical debt we bought.

The larger issue is,
we need much clearer rules

to protect consumers from
predatory companies like ours.

In the meantime,
it seems the least we can do,

with this debt that I cannot
believe we are allowed to own,

is to give it away.

Are you ready to do this ?

You are about to watch me
give away $15 million.

Fuck you, Oprah.

It's done !

I am the new queen
of daytime talk !

Thank you so much
for watching the show !

Thank you
to the debt-buying industry

and our irreparable
problems associated !

See you next week,
good night !