topic Re: Adding interest on collection? in Rebuilding Your Credit

Adding interest on collection? UPDATE

Anonymous — Sun, 25 Mar 2012 03:36:43 GMT

Hi, I'm finally down to my last stubborn baddie. I've been trying for years to get this one removed, with no luck.

Hopefully, someone can help me with my question. Is there a law to how much interest can be added to a collection account? I thought I returned an old movie in Nov 2006, but the video store says they never received it so they sent it to collections. When they first start reporting it, the amount owed said $224, now it's $460! 3 months ago it was $391. Can they just keep adding to the amount, whatever they want? Maybe a dumb question, just curious. I'm in California by the way.

Statewide Collections

Original Creditor: All the Best Video

Date opened: 12-06

Type: Collection

Account status: Open

Terms: 1 month

Monthly payment: $0

Credit limit/Original amt: $277

Recent balance: $460

Status details: acct is schedule to continue on record til Jan 2013

Re: Adding interest on collection?

RobertEG — Thu, 09 Feb 2012 00:08:03 GMT

You need to consult your state debt collection practices statutes. Most states have prescribed limits.

Re: Adding interest on collection?

Anonymous — Thu, 09 Feb 2012 00:09:25 GMT

FOR ONE MOVIE???!!!

I dont know, but I would contact the store ASAP and see what can be done. At this rate you will owe thousands and the longer you let it sit, the worse off you will be!

Re: Adding interest on collection?

LIGHTNIN — Thu, 09 Feb 2012 00:24:31 GMT

No, a CA cannot charge whatever thay want. But they can charge interest on a debt, the terms and rates would be on the orginal contract with the OC.Some states do have laws on how much interest can be charged on a debt, check your state laws or call a local attorney for that info.Or google it. You can contact the CA and ask them to explain to you in writing on how much they are charging you and why, by law they must provide you this info.

Re: Adding interest on collection?

Anonymous — Thu, 09 Feb 2012 01:22:07 GMT

Thanks everyone for your responses. Yes, all for one movie Grrr...

I googled it and the debt statutes for California...

Interest: 10%

So, they are definately not following that law. I plan on writing them and asking them why they are charging me that much. How long should I give them to respond? What do I do if they do not provide the info or respond?

Re: Adding interest on collection?

Anonymous — Thu, 09 Feb 2012 01:24:07 GMT

I would call. Id need to hear the explanation (excuse) that they give for trying to rip you off!

I bet it will come back down to $2.99 or however much it was to rent it-LOL

Re: Adding interest on collection?

Anonymous — Sun, 25 Mar 2012 03:26:23 GMT

UPDATE:

I called and they advised me that they would not speak to me over the phone regarding my questions and to send a written request. I sent a letter asking how much the collection agency was charging me and why.

Today, I received a letter from their attorney. The letter stated that "The debt is for 1 unreturned video at **** Video in the sum of $277.34, interest is calculated at the legal rate of 10% from 9-23-06. Be aware the amount(s) being claimed are correct and that the person from whom collection is requested is the person who owes the obligation. Finally, in an offer of settlement, Statewide will accept as payment in full on or before April 2 the sum of $277.34. You may keep this letter as record of settlement once I return to you an acknowledgment and receipt of your payment.

Here is my new questions that I am hoping someone would be so kind to anwser.

1. I'm still not sure how 1 video original balance is $277, can I ask for proof of the cost of the video?

2. Do i settle for payment in full or keep sending pfd's? The balance on my credit file is currently at $460 with all the interest!

Thanks!

Re: Adding interest on collection?

Anonymous — Sun, 25 Mar 2012 15:18:21 GMT

@Anonymous wrote:
UPDATE:

I called and they advised me that they would not speak to me over the phone regarding my questions and to send a written request. I sent a letter asking how much the collection agency was charging me and why.

Today, I received a letter from their attorney. The letter stated that "The debt is for 1 unreturned video at **** Video in the sum of $277.34, interest is calculated at the legal rate of 10% from 9-23-06. Be aware the amount(s) being claimed are correct and that the person from whom collection is requested is the person who owes the obligation. Finally, in an offer of settlement, Statewide will accept as payment in full on or before April 2 the sum of $277.34. You may keep this letter as record of settlement once I return to you an acknowledgment and receipt of your payment.

Here is my new questions that I am hoping someone would be so kind to anwser.
1. I'm still not sure how 1 video original balance is $277, can I ask for proof of the cost of the video?
2. Do i settle for payment in full or keep sending pfd's? The balance on my credit file is currently at $460 with all the interest!

Thanks!

Is this debt past SOL? It appears it probably is since it is falling off your CRs in January. If I were you, I'd offer them some small and REASONABLE amount for a past due video...maybe $20 or $30 for a PFD. And, I'd stick to my guns on that number. Unless you absolutely need the collection off of your reports before January, that is.

Re: Adding interest on collection?

Anonymous — Sun, 25 Mar 2012 16:01:31 GMT

Yes, it is past SOL. I would like it to get off my reports so I can finally get a credit card to help rebuild. I have no tradelines on my report.

Re: Adding interest on collection?

Anonymous — Sun, 25 Mar 2012 16:27:32 GMT

@Anonymous wrote:
Yes, it is past SOL. I would like it to get off my reports so I can finally get a credit card to help rebuild. I have no tradelines on my report.

Well, then I guess I would PFD them until they got tired of me. They don't seem PFD friendly, but that may change if you wave some actual money in front of them

ETA: you could always get a secured cc or 2