Medical Collection - Can a Collection Agency legally add money to the original balance?

[IncreasingFICO]

I was wondering if anyone knows if a collection agency can legally add money to the original balance of a medical collection each month when I am not paying them. 

I have six medical bills in collection and the collection agency keeps adding more money owed each month.  Because of this, they keep changing the Date Last Active to the current month.  Does this hold my credit score down, or changing the 7 year time frame of the debt falling off? 

This should be ILLEGAL since I have not signed a contract with them and the doctors and medical businesses do not charge interest. 

I hope someone could answer this for me. 

[MileHigh96]

https://www.experian.com/blogs/ask-experian/can-collection-agency-charge-more-than-original-debt/

According to Experian, they can unfortunately.

[gdale6]

They can charge whatever the original contract allows, most medical companies have interest rates of 18% or higher if the bill is not paid when it is received.

[Onlinecreditnewbie2]

Good day. 

The quote from Experian ,  provides you with a start. In my state - they cannot apply interest on a debt.

Yours may differ.

Google the state you reside in, and allowable interest on debt collection = for you state, as laws do vary. 

https://www.consumerfinance.gov/ask-cfpb/can-a-debt-collector-increase-the-interest-rate-on-a-debt-i...

"Both state laws and federal laws like the Fair Debt Collections Practices Act (FDCPA) regulate the fees a collection agency can charge. Often, the amount of interest is dictated by the interest rate listed in the terms and conditions of the original contract."

[SoCalGardener]

From *tons* of personal experience, I know that they can add whatever is allowed by state law, as long as they spell it out on their bills. For example, *my* bills included a blurb like "if amount due is not paid by XX/XX/XX, a penalty fee of $XX will be added." Perfectly legal.

[IncreasingFICO]

What if there is no original contract as the debt was from a doctor's office? 

I have never received anything from this collection agency, nor phone calls.  I found out about them by pulling my credit reports. 

Since writing the original post, I have contacted the state's Attorney General's office for clarification and what laws apply regarding charging interest on medical collections.  I also slipped in that these medical collections should be deleted as they contain inaccurate information on my credit reports -- balances different, date opened are different, etc.  I also included that the state statute of limitations has expired on all these debts.  I had to send them copies of what is being reported on my credit report.  They sent me an email that stated that it may take 7-10 days before hearing back from them as they are extremely busy with all the evictions that are going on in the state. 

I am very anxious to see how they reply - both the Attorney General's office and the collection agency.  As soon as I find out anything, I will post how this went and if it was effective or not. 

[bass_playr]

There will still be a contract, it would just not look like a typical contract.  When you go to a doctor, you sign a consent form.  That consent form is you consenting to be treated--and also to be responsible for the costs involved.  Now, some states say that any additional amounts must be expressly stated in the consent form, while others have a max interest rate that can be sued for or added onto the debt.  As someone said above, your mileage may vary.  

[Cowboys4Life]

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@IncreasingFICO wrote:

What if there is no original contract as the debt was from a doctor's office? 

I have never received anything from this collection agency, nor phone calls.  I found out about them by pulling my credit reports. 

Since writing the original post, I have contacted the state's Attorney General's office for clarification and what laws apply regarding charging interest on medical collections.  I also slipped in that these medical collections should be deleted as they contain inaccurate information on my credit reports -- balances different, date opened are different, etc.  I also included that the state statute of limitations has expired on all these debts.  I had to send them copies of what is being reported on my credit report.  They sent me an email that stated that it may take 7-10 days before hearing back from them as they are extremely busy with all the evictions that are going on in the state. 

I am very anxious to see how they reply - both the Attorney General's office and the collection agency.  As soon as I find out anything, I will post how this went and if it was effective or not. 

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There very much is a contract.  It is called the Financial Agreement.  It is one of the consent forms you sign when you fill out all the paperwork.  The first major problem is almost no patient reads it they simply scribble their signature and move on.  It clearly states that you are consenting for the office to bill your insurance provider (if there is one) as a courtesy but if they do not pay you are still liable for ALL charges.  The next paragraph is one that most providers now have which is if the bill(s) are not paid by a particular date (usually 90 days after care) they can/will turn it over to collections at your expense and often spells out the financial consequnce.  That can include interest as well as CA fees.  NONE of that is illegal if you signed the financial agreement.  You need a copy of that from your provider.