Question Regarding the Amount a CA Can Collect

I just sent a letter to Arrow Financial regarding they debt of mine they are trying to collect. Now when the account was charged off, the balance was just over $500. Another CA had it stating the balance was $722. They never validated the debt, so now Arrow has it. They stated over the phone that the balance is $990 and some change. I have kept EVERYTHING from this account since it was opened and I don't understand where that amount comes from. The original credit card company sent me a confirmation that the balance was $514 when it was charged off.

The fdcpa states a collector cannot collect "any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law."

So does this mean they are in violation by trying to collect $990? I sent them a looooooong letter asking for validation, stated I still had not received anything in the mail from them and when I do or when I communicate with anyone there, I expect a FIRST and LAST name...none of this "Miss Bailey" BS.

Sorry...they were pleasant enough, but I feel like I am being taken advantage of.

A collector has the right to add interest and fees if the original contract creating the debt allows for this.Some states forbid this practice unless they hold a financial license. In your dv letter to them ask for a cost breakdown to explain the undocumented charges.

Cajun is right, in proper validation they must show you how they calculated all these add-on fees and interests and why. Send your letter registered return reciept. I've heard of CAs lying, and saying that they didn't get the DV, but the alleged debtor had the signed card proving they got it.

Thanks for the information. I sent a very specific letter to them today asking for all that. Not just a simple debt validation...I requested to know each cent that made the balance escalate to that amount.

Please tell me what states do not allow collectors to add fees and interest to old debts, without a financial license.

Hi waterbug

You did the right thing by asking them to verify the amount of debt that they are claiming to be yours. Most of these collection agencies buy debt in pennies from the original creditors and charge in dollars from the consumers. Thats how their business runs.

So as of today, I have not received this letter Arrow said they sent on July 24th. No big surprise there. I sent them a letter (certified) the other day and know they signed for it the next day. They did call twice yesterday so I called them back and advised them about the letter, the fact I knew they received it and that them calling me was a violation of the fdcpa. The lady says "those things are hard to prove." I said "not really since they incoming calls are recorded on my phone with date and time." She actually said "whatever" and then "are you gonna pay this up or what?" Ha. I simply said they have my letter and must provide validation and then I hung up. I also found an e-mail for them and sent a copy of my letter...and received a delivery and read reciept.

I am thinking that I am either not going to hear from them again or they will actually validate the debt.

Now here is another question...if they validate the debt...as they have already violated FDCPA, do I have to pay them or can I use the defense of their violations to not pay them?