Strike Debt, an offshoot of the the Occupy Wall Street movement has managed to buy up
nearly $15m worth of personal debt belonging to members of the American public and abolished
it.
To be clear, this means that the Americans who owed that debt will never have to pay
it back.
Ever.
And what's possibly even more incredible is that it only cost Strike Debt $400,000 to
do this.
That means that for every dollar the group was able to raise from its project Rolling
Jubilee, it was able to clear about $37 worth of debt.
And all of the debt cleared came from medical bills.
Strike Debt acquired this debt in three separate purchases.
Its most recent purchase was on $13.5m of medical debt owed by 2,693 people across 45
states and Puerto Rico.
So exactly how were Debt Strike able to achieve this extraordinary feat?
We spoke to Andrew Ross from Strike Debt, who is a professor of social and cultural
analysis at New York University and the author of Creditocracy.
"Rolling Jubilee is a very simple idea.
What we do is we raise money and we buy debt that has been defaulted on and has been sold
on the secondary debt market very cheaply.
Original lenders decide that they no longer want to pursue the collection of these debts
so they sell the debt for pennies on the dollar.
The debt collectors buy it and then they come after you to try and collect the full amount.
So basically what we do is we, we sort of act like a debt collector although we don't
collect on the debt.
We go in and we buy the debt very cheaply and then we abolish it.
We write to the debtors telling them they're off the hook."
Since launching the Rolling Jubilee project exactly a year ago, Strike Debt have managed
to raise more than $600,000 all donated by individuals.
Andrew explained to us why Strike Debt decided to spend two thirds of this money on clearing
medical debt.
"Most other industrialized countries there's no such thing as medical debt, 62% of all
personal bankruptcies are a result of medical debt.
And so it's a huge problem here.
People are forced to go into debt simply because they get sick.
Seems to us to be very immoral.
In addition it was easier for all sorts of technical reasons for us to buy medical debt
and very cheaply."
Andrew says the group plans to use the rest of the money raised to go after student debt.
Occupy Wall St, Occupy Everywhere never give it back.
Some of you watching might be wondering if Strike Debt can help you get your debt cleared.
But unfortunately the way the process works is that anonymous debts are bundled up and
sold as a whole and so Strike Debt have no way of knowing whose debt they're clearing
until after they have bought it.
And this is just one example of why Strike Debt believes the entire debt system needs
to change.
And worryingly, Andrew doesn't believe that Obama's controversial healthcare reforms are
going to do much to solve the personal debt problems caused by medical bills.
"In Massachusetts, which is where Obama's model was first instituted basically the same
system, the evidence is there was no appreciable decrease in medical bankruptcy.
It will continue to rise as indeed medical costs will continue to rise."
Despite all this however, Strike Debt are closing down the Rolling Jubilee project and
at the end of 2013 will no longer be accepting any donations.
"The Rolling Jubilee is a public education project.
It's not designed as a large-scale solution to the household debt crisis.
It's really a small dent in the volume of secondary market debt out there.
And we wanted to expose the secondary debt marketplace to let people know just how cheaply
debt collectors buy your debt.
We think we've made our point.
It's very labour-intensive to operate in this very murky, shadowy debt marketplace.
We want to free up some of those resources, our time and energy to building a debtors
movement more generally.
We think that the future of democracy is on the line here.
If the government can't protect its citizenry from creditors... then democracy is in peril
and in order to salvage a living democracy we really need to take action for ourselves.