Collection Agency Adding Fee's or Interest?
Date: Sat, 01/08/2011 - 23:17
Are collection agencies allowed to add fee's or interest?
My boyfriend received a letter from a collection agency that stated:
A) They are adding interest to the initial amount he owed for a medical bill.
B) The want to charge him "service fee's" which include a $10 set up fee and 4% service charge, which they are adding to his first payment in a payment plan they proposed to him.
He wrote them back in March of 2010 (received with proof CMRR) and received nothing back from them, but they continued to report on his CR (which he wasn't monitoring till I insisted till recently).
They want him to sign an authorization form and return it along with a voided check or a deposit slip linked to his savings account if he wishes to pay that way instead?
They also state in the letter that if he defaults on an agreement with them that he will be responsible for the balance in full (which they still have not validated) as well as any and all interest accrued at the rate of 10% annum.
I thought collection agencies were not allowed to add interest to a debt? Only an original creditor could? Is any of the other stuff they propose legal?
My boyfriend received a letter from a collection agency that stated:
A) They are adding interest to the initial amount he owed for a medical bill.
B) The want to charge him "service fee's" which include a $10 set up fee and 4% service charge, which they are adding to his first payment in a payment plan they proposed to him.
He wrote them back in March of 2010 (received with proof CMRR) and received nothing back from them, but they continued to report on his CR (which he wasn't monitoring till I insisted till recently).
They want him to sign an authorization form and return it along with a voided check or a deposit slip linked to his savings account if he wishes to pay that way instead?
They also state in the letter that if he defaults on an agreement with them that he will be responsible for the balance in full (which they still have not validated) as well as any and all interest accrued at the rate of 10% annum.
I thought collection agencies were not allowed to add interest to a debt? Only an original creditor could? Is any of the other stuff they propose legal?
As per Section 808(1), debt collectors are prohibited from colle
As per Section 808(1), debt collectors are prohibited from collecting any amount unless it is expressly authorized by the agreement creating the debt is permitted by law. Take a look at the given page in order to know more in this regard: "http://www.fair-debt-collection.com/most-asked-questions.html#6"
