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CA wants 18% on top of the original debt!


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I originally had a past due balance with my phone company (Cingular) for $960. After not being able to make payments in full, they suspended my service, and within five days, charged me the $150 early termination fee - and on top of that, passed the account to a collection agency that demands an 18% "fee" be applied, which has them asking me for $1400.00!

I called the cell phone company, telling them I did indeed want to pay THEM the money, not the CA, but the rep with whom I spoke explained that:

1) if I pay the collection agency in full, the cell phone company will be "notified" of the payment and not persue further collection.

2) if I pay the cell phone company the original balance of the account, they will let me resume service once the account has a 0 balance, but I will still owe the collection agency the 18% fee!

The CA has been calling, but I do not speak to CA's on the phone. I am waiting for them to mail me written notification of my debt owed to them.

I am hoping one of the debt experts on the boards will give me some "first steps" to take here. I know I should dispute that 18% fee, because I believe the limit is 6% on a judgement in my state of PA. I also never explicititly agreed to any such collection fees, that I know of.

Can I write to Cingular, explaining that the debt was sent to third party collections long before I had an opportunity to respond and explain that I intended to pay?

Who should I pay? Should I just try to settle with the CA since the CA entry is going to be on my credit report no matter what?

If I pay the CA, won't I have two listings on my credit report? (One from Cingular, plus one from the CA that recieved the payment?)

Thanks, guys!

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The way to fight this:

1 It is illegal for a CA to charge a fee like this unless specifically allowed by law, or by the contract

2 The cell company cannot charge the cancellation fee unless allowed by the contract

So, the best way to fight this is to demand to see the contract that you signed that allows the 2 above

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I just found out that this is NCO!

Cingular originally told me it was "Risk Management Alternatives." The invoice from NCO even says "NCO, formerly Risk Management Alternatives." Was anyone aware that they were also going by this name?

I just wrote a DV letter, so we'll just have to wait and see what happenes.

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