Can a collection agency charge fee's and interest rate

[voncreutz]

On my credit report from Transunion I have two charged of credit cards from Cap one. It states on my credit report that the high balance was $535 ($200 credit limit), and that it was sold to Asset Acceptance

Asset Acceptance, however, reports the high balance to be $862, and the original balance to be $837 on the same credit card.

Equifax also reports the charge off amount to be $535, while Asset Acceptance reports the balance to be $862, with a High Credit of $837

The same scenario is true with my other credit card from Cap One.

Can they do this?

[Trish]

Yes, unfortunately they can.
According to the FCRA, a CA is allowed to put interest on debts but the amount varies from state to state...so check your state laws. Also when you DV the CA, you have the right to ask for an itemized statement showing exactly what their charges are and what they are for.

I did find out that they are not allowed to put interest on medical debts.....just an FYI.

[J.A.]

A CA can charge fees & interest if the original creditor indicated this in an agreement when the account was purchased by the CA. A CA will back off when you send a debt validation letter regarding information on the balance of the debt owed.

Just as Trish indicated they have the burden of proof. The validation letter should ask them to give you information on this debt from day 1 until it was charged off, also if they have added fees & interest you would like to see a copy of the original agreement stating they can add fees. The FDCPA which governs the collection agencies states that this information must come from the original creditor not just a print out.

Most back down after this especially if the debt is older then 2 years old. They usually can't get this information from the original creditor.

[voncreutz]

the debt is allmost 4 years old now. Should I then send them a debt validation letter and wait for a response, or should I continue with a 1 2 punch as soon as I know they received the letter?

Thanks for all help guys

[Trish]

I would go ahead with the 1 2 punch :cool:

[voncreutz]

Thanks Trish, I'll go ahead with the 1 2 punch