Wacky Math

[AISLE4]

A CA sent validation--a bunch of statements purportedly from the OC (unsecured credit card). The envelope was addresed from the CA, not the OC, but they look like copies of statements from the OC. The last payment made was about a year ago to the OC when the balance was about $9,000.

Fast forward one year later. The CA is now trying to collect a balance of close to $17,000! The default interest rate from the OC is a bit over 32%, but somehow the balance has increased close to 90%. After comparing the statements sent from the CA to the original statements from the OC for the same time period (original statements are from my own records), it is clear that the CA has made math alterations. If calculations are made from one statement to the next monthly statement, the math doesn't add up. The numbers are wildly inaccurate and don't match the original statements from the OC for the same time period.

Of course I'm not paying, but what can I do with it? Is it possible that a CA is really so brazen to alter statements in an attempt to inflate the balance? This seems like more than the run-of-the-mill FDCPA violation.

[Amerikaner83]

don't forget mail fraud

[merkurfan]

they are likely trying to collect the over the limit and late payment fees. But even at 60-80 dollars a month their math is not working in my head.

[willingtocope]

Hmmmm....the marvels of compound interest.

So, an annual rate of 32% is 2.67% per month. If the over limit fees and late fees total $100 per month, and you start at $9000, and you pay interest on the fees...at the end of 4 months, my Windows Calculator says you would owe them $10,400. Depending on how many actual months "about a year later" really is, I can see it growing to $17,000.

32% interest without fees doubles in three years....

[EdwinRamos]

This site explains Compound Interest in layman's Terms...

Click Me!!

[AISLE4]

They had been charging late payment and over limit fees for about 6 months after the last payment made, but those fees totaled $70 each month. There is no way to tweak the math (using the original statements) that ends in the amount they are asking for.

The balance doesn't really matter to me right now. What I'm particularly interested in is why the statements from the OC have changed. Statements that were sent to me in the autumn of 2006 from the OC, before any CAs were involved, when the account became delinquent have now changed. There are different balances due and different new transaction amounts that don't appear on the original statements. There is no way I could have made purchases with the card during this period because the card was no longer usable; it had been cancelled and in default. I can think of no reason why these statements have magically changed once a CA is involved and a year has passed.

I know the CA is going to have no interest in walking me through the math nor explaining the mysterious document switcheroo, so I guess we will be at a stalemate until we are in front of a judge.

[willingtocope]

No doubt about it...they are probably using voodoo economics to inflate their claim. One of the "discoveries" you'll want if you do go to court is how they arrived at their numbers.

[merkurfan]

Must be that fuzzy math we heard about 3 years ago.....