The author had been in the note business two years, had an extensive marketing background and had bought hundreds of mailing lists for different industries over 15 years. He considered himself an educated, astute marketer. Even so, he learned a hard and expensive lesson.
What the list vendor promised
He bought a customized note holder list from a list broker in southern California. The list was supposed to be prequalified. It supposedly held note holders who had answered the broker’s own direct mail campaign and had urgent reasons to sell: pending foreclosure, IRS back taxes, medical bills, you name it.
The broker had also supposedly followed up by phone to confirm each holder’s interest, gather the note details and tell them a buyer would be contacting them soon. He could further customize the list to notes that were:
- Recorded
- Backed by a down payment
- Current
- $70,000 and up
The references and the exclusivity pitch
The list broker gave him two references to call. Both gave glowing recommendations, and one said he had closed 18 deals from the broker’s lists over the past 24 months.
He now believes the references were part of the scam. Before the purchase they called him back within minutes. Since the purchase, neither will return his calls.
He was also told he was one of only 200 customers a year allowed to buy these customized lists, with exclusive use of his list, and so on. On that basis he bought a list of 10,000 note holders for several thousand dollars.
What the list actually produced
He mailed a letter to the list and followed up with telemarketing. The list was junk. The mailer drew zero response, and the telemarketing results were too embarrassing to share.
He emailed, left messages and sent certified letters demanding a full refund, with no answer. When he finally got someone on the phone after dozens of tries, they heard his name, said no one from sales was available and hung up.
The pitch to walk away from
He learned firsthand what so-called note holder list brokers can offer. The vendor kept emailing its services to brokers, and had recently changed its name. If you hear a pitch like this one, don’t walk. Run.
- “Prequalified” note holders with urgent reasons to sell
- References who are eager before the sale and silent after
- Claims of exclusivity and a limited number of buyers each year
- A vendor that recently changed its name
