Help please, Collection Agencies and Interest?

What state are you in? That would help a lot.

If the original contract and you state does not allow it, they cannot charge interest.

hea12ther1:
Hi Everyone, I have two old Capital One cards from around 2004 - 2005 that I need to pay off. Both of these cards had a credit limit of only $250. The two collection agencies that now own these two debts are Kay Mitchell and NCO. NCO states I owe $980.00 and Kay Mitchell states I owe $1050.00. I do intend to pay off these debts but does anyone know if there is a cap on how much a CA can charge for interest and fees? I know that when Capital One handed these over to the CA's the balances were not over $300. I live in Ohio. Any advice or opinions would be appreciated.

I live in Ohio also, and this is something I have been doing research on. I have heard (I haven't found this info to be true, yet though), that Collection agencies can not charge interest unless they have a license to lend in the state they are collecting in. I haven't found any iron clad information in the laws yet to back that up, though. I have also heard, that collection agencies can only charge the amount of interest which was on the original loan contract from the original lender. So, I am anxious to hear an answer to this question once and for all, I would love to know the actual law that pertains to this.

According to the fdcpa a collector cannot charge interest or fees unless original creditor agreement states that interest.Some states require additional requirements to charge interest. In your dv letter ask for a complete payment history and how they can up with all their figures.

I found this, which I am going to use during discovery.

Under Section 808 Unfair Practices of the Fair Debt Collection Practices Act under the Consumer Credit Protection Act, federal law prohibits a debt collector from collecting any amount (including any interest, fees, charge, or expense incidental to the principal obligation) unless such amount is expressly authoized by the agreement creating the debt or permitted by law.

If a debt collection agency owns your account, and you did not expressly enter an agreement to pay interest and fees to that collection agency, than they cannot charge you anymore than what the already existing balance is.

hey Shazzers now that is good stuff there! Use it!

You know I actually found myself reading through the fcra last night. There is so many things I highlighted but I am sure my brain will need a week or so to translate it into undertandable english .