CA's and Interest rates, I got a question

[momof2]

I have a CA that will PFD if I PIF that includes the interest which they are claiming 9.25% per year, if I pay only the prinipal then they will only update as paid $0 balance.

I went to the NV state AG website and found out that a CA can ONLY collect interest if they have a written agreement with the OC to collect interest. So I looked up the interest rate and SOL info for nevada, it says written contract 6years, interest rate 2% over prime. So I have 3 questions

1. How do I find out if the OC & CA have a written agreement to collect interest?

2. I am not sure what it means by 2% over prime, does that mean that they can only charge 2% interest or an additional 2% after the 9.25%?

3. If it is only 2% that they can legally charge, do I need to file a complaint w/the AG for the CA trying to collect 9.25% interest rate?

Here is what I found on the AG website

If clearly authorized in writing, the collection agency may collect whatever interest on the

debt the creditor would be authorized to impose. In the absence of evidence of a contrary intent,

a collection agency’s authority to collect interest on behalf of a creditor may be implied in cases

where the creditor has properly imposed interest on the account prior to assigning it for

collection. The fact that a creditor had not previously imposed interest on a past due account

46 Because the outright purchase of past due debts is quite rare, we shall assume, for purposes of our analysis, that the issue of a

collection agency’s authority to impose interest arises only in cases where the debt has been assigned for collection only.

indicates an intent not to authorize the collection agency to impose and collect interest, unless a

contrary intent is clearly manifested.

Message Edited by momof2 on 04-21-2008 06:10 PM

[Anonymous]

Unfortunately, the CA pretty much has you over a barrel. Sure, you might be able to legally prove they couldn't charge the 9.25%, but then I'm sure you'd see the PFD yanked off the table.

What you have to decide is whether losing the collection is going to boost your credit score enough to justify paying the extra vigorish.

[Anonymous]

What is the Prime Rate? The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The rate is almost always the same amongst major banks. Adjustments to the prime lending rate are made by banks at the same time; although, the prime rate does not adjust on any regular basis.  The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate. 

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1. How do I find out if the OC & CA have a written agreement to collect interest?

Good question. Ask them for it?

2. I am not sure what it means by 2% over prime, does that mean that they can only charge 2% interest or an additional 2% after the 9.25%?

It means they can charge 2% above prime rate. If prime rate is 6%, they can charge no more than 8%.

3. If it is only 2% that they can legally charge, do I need to file a complaint w/the AG for the CA trying to collect 9.25% interest rate?

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[momof2]

to the new world---- so lets say I take the PFD and not even bring up them overcharging the interest rate, the date of service was 10/21/03 and is due to drop off 7/2010 according to my EX report, if I do the PFD how much of a score jump can I see?

IF only a few points then would it be worth fighting the interest rate if the OC & CA dont have an agreement to charge the interest rate and wait for it to fall off in 7/2010?

[Anonymous]

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momof2 wrote:

to the new world---- so lets say I take the PFD and not even bring up them overcharging the interest rate, the date of service was 10/21/03 and is due to drop off 7/2010 according to my EX report, if I do the PFD how much of a score jump can I see?

IF only a few points then would it be worth fighting the interest rate if the OC & CA dont have an agreement to charge the interest rate and wait for it to fall off in 7/2010?

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Not newworld............but is this your only baddie? In my own experience, I haven't really gotten much for the few I've had removed. But I hear when that last one comes off it and you see your score change, it makes you so excited that you might wet your pants.

[momof2]

needless to say, I wish it was my only baddie, i also have on my EX report the following:

1. Professional collection consultants: DOFD 10/2004 CA was suppose to update as paid, after a year and monthly calls still has not updated, currently I have a complaint against them w/the BBB and requesting full deletion since they have not fullfilled their promise. $0balance

2. daniels jewlelers- i have 1 30 day late and 1 60 day late from 2003 yet it is listed as a neg item on EX DOFD 2/2003 $0 balance sent GW's and e-mailed one to the VP today asking for the lates to be removed

3. sentry recovery- DOFD 5/2004 balance $1623.00 plan to pay this one with the IRS rebate check we get next month, plan to send a PFD, if they deny, then will send letter for settlement.

SO if I pay the interest what kind of score jump should I see, if any at all? if no score increase or only a few points then i will just pay the principal and wait for it to fall off 7/2010

[momof2]

sidewinder----   you know the answer to my last post? i need to know if it is worth to PFD or just pay the principal and let drop off in 2yrs if it doesnt change my score because of the other baddies

[Anonymous]

What's the dollar amount of interest that they're asking you for?

[momof2]

b/c their client had a class action lawsuit that i was part of, they have to reduce the amount to the correct amount of $354.90 they are going to calculate the total amount from the date of 8/2004 up to when i pay, untill i can pay they wont give me a dollar amount. they are charging 9.25% interest