Banks do chase their loans, they only sell charged-off debt when...

Banks do chase their loans, they only sell charged-off debt when they feel that pursing the matter further is too unproductive, so they call in specialists like CCP. Banks focus on banking, not tracking down people, which is a specialist task, and a great deal of debt chasing involves locating welches who do not want to be found.

The reason for not settling with the original debtor who has welched is to avoid creating a national culture wherin debtors routinely welch, and then settle for a fraction of what they owe. I am not familiar with the nature of the conditions attached to the sale of debt, but sellers of charged-off debt do impose collection conditions. I imagine that they oblige the buyer to pursue the debts, and not routinely settle for less. Somebody who has inside knowledge, may confirm this.

The banks are perculiar animals in that they often focus on their entire business, rather than incedent by incedent. That is why the arest rate for bank robbery is so high - a major bank would think nothing of spending a $100,000 to ensure a robber is apprehend, even though the robber stole less than $100,000. The message is, robbing banks is a mugs game, stick to robbing old ladies. Similarly for debt welches, the banks would not want to encourage more borrowers to welch, and then settle for cents in the dollar. I think CCP buys debt at about 20c in the dollar.