Question on CA's charging intrest/fees

[Anonymous]

My balance with Asset Acceptance and Portfolio Recovery (one originally from Capital One and one from Citi) keep going up.  There is no bill sent to me or explination I just get a notification from my credit monitoring service that the balance raised, and are now significantly higher then the "original" amount.  I did send them both pfd letters, but I know Asset Acceptance is hard to get to do that.  Is there some way I can challange the amount they are charging?  Even if its ligit, maybe if I annoy the heck out of them they will take my money and agree to a ptd?  I will send them something by snail mail, fax, email everyday if thats what it takes.  I want to say they did validate the debt, but I can't remember for sure...they are both about 4 years old.  Should I even pay these if they are unwilling to do a pfd?  Will it help my credit score to show as paid?

[esme]

I'm don't think that paying off collections boost scores. I think I've actually read that some people's scores actually went down after paying off a collection. It might be something to do with making the account more current, so it weighs more - who knows? Check the SOL in your state. Then, your best bet is to do a DV through the CRAs first. If it comes back validated, that's when you offer a PFD. Are the balances pretty high? Or still relatively low?

[llecs]

Ditto to a DV, but a DV would go to the CA as opposed to the CRA. If after multiple PFD attempts go unfulfilled, then the only option, if reporting correctly, is to just pay it. Some CAs are not open to PFDs. Some are. Conversely, some CAs might not be open to PFDs, but are receptive to deletion after it's paid. Be sure to read around to others' actions and success.

On interest and fees, CAs can charge simple interest and that's either defined by your state's laws (here in VA it's 18%), or defined by your org. agreement with the OC. There might be a universal default clause in your agreement with them. The only fee a CA cannot charge is a "collection fee" or a fee to collect the $$$. I had a CA once collect on a $300 debt I owed to First Premier. This was in 1999 or so. The CA purchased it and they collected for the original $300, but there was a line item in their dunning letter for a "collection fee" of an additional $300, or $600 total. After a while they sent another collection letter for $1200 and they added a collection fee of another $600. By the FDCPA, this practice is illegal.

[RobertEG]

Interest accrues to the owner of the debt, under the terms of the account agreement.  If a debt collector is collecting on behalf of a creditor and they list interest as part of their collection, it is not "interest being charged by them."  It is interest due to the owner that is part of  the debt they are collecting.

Collection fees are separate, and may or may not be legally due to a debt collector, dependent upon the law of your state.  It is separate debt alleged to be due to the debt collector.

It is possible to discharge all debt with the OC, and yet have the debt collector keep their collection open in pursuit of debt alleged to be owed to them.

[Anonymous]

I am wondering if I have a right to get an accounting of the fees.  Even if its all legal, can I tell them they have to account for it?  At least annoy them a little bit.  I sent them both the pfd letter here that did also say I was challenging the valitiy.  I faxed it to both.  One is around $1100 and the other around $750, so not amounts that I think they would sue for.  Both are around 4 years old, I should check what the statue of limitations is here, I wanna say it's 5 years?  I live in WI.  Oddly, I don't think the original Citi and Capital one card are on my report?  I kind of wish it was, b/c it was one of my oldest accounts.  I opened them both when I was 18 (I am 24 now).  I'm not going to pay them if it isn't going to help.  I am trying to raise my score for a mortgage, I need to have a higher credit score, but collection accounts are not required to be paid off.

[RobertEG]

Most legal interpretations of debt verification under FDCPA 809(b) include the right to an itemized listing of the debt.

While they dont have to respond to a DV request, unless you live in Texas, and it wont invoke a cease collection bar if sent later than 30 days after their dunning notice, which I presume is your situation, they will most likely comply.

Send them a request for debt verification under FDCPA 809(b).  It wont hurt.

Deciding not to pay unless they accept a PFD is, of course, a personal decision.  Just be aware in advance of any options that THEY might have.

Is the deb still within SOL?

[Anonymous]

They are still within SOL, however as I said they are small balances. They have been on my report for about 4 years, the SOL here is 6, I would think the date of last payment was somewhere around 5 years ago.  I don't know for sure b/c both of the accounts associated with this have been removed.   I can't imagine a CA getting a local lawyer and paying all the court costs to sue me over $700.00.  I literally sent both a letter stating no phone calls letters only about 2 years ago and never heard from them again.

[Anonymous]

I faxed them my pfd letters and requested they respond w/in 5 days.  If they say no, or don't respond I will send them a VA notice.  Maybe at least then I will know exactly how much more time they have left on the SOL.

[IOBA]

ktlynn_74 - CA's DO sue over small balances to include suing over balances under $100.    A recent one I have seen it in the paper, Cap 1 suing for $43.10 plus legal fees.   

If it's within the SOL they can still sue you.

You also have the right to a detailed accounting of the bill.  This would include all interest charges and fees added to the account.   The CA will usually (not always) respond to a written request for the detailed accounting of the bill.