Comedian John Oliver Buys $15M In Medical Debt, Then Forgives It
Comedian John Oliver, host of HBO’s “Last Week Tonight,” got a bit serious on his most recent show.
He explored the topic of medical debt, which affects nearly 20 percent of Americans, according to a December 2014 report by the Consumer Financial Protection Bureau (CFPB), and how the practice of medical debt collection is somewhat murky and sometimes even illegal.
In case you’re not 100% clear on how debt collection works: Debt buyers will purchase medical debt from creditors or other debt collectors. Each time the debt is sold — and it can change hands multiple times — its price drops. When a collection agency finally pursues the consumer who owns the debt, the profit potential is huge, and so the incentive to receive payment is high.
Oliver highlighted the issue of “zombie debt,” which is when collectors receive payment for debts that have passed the point of being prosecutable in court. Most consumers aren’t aware, when a debt collector calls, that the statute of limitations on being able to prosecute them for unpaid debt may have passed. According to Consumerist, that number is around six years in most states.
To make his case against the practice of medical debt collection, Oliver created a debt-collecting firm (for about $50), then proceeded to buy $14,922,261.76-worth of debt for just under $60,000. And then, rather than capitalize on those large margins, Oliver erased the debt for the 9,000 individuals whose accounts he’d purchased.
What’s more: Because individuals can face tax consequences for debt forgiveness, Oliver and team worked with a company that works specifically to forgive medical debt without creating a big tax consequence for the former debtor.
Watch the segment below: