2nd collection agency on debt.. what are they allowed to collect?

[sarahcreditdetective]

I just recieved a letter from a collection agency stating they bought my debt from a different credit agency.. and I owe something huuge compared to the original balance that went in to collections!

Now without pulling out my reports, the original amount sent to collections at the end of 2004-beginning of 2005 was apx $2500.

(My state's SOL is 6 years, it has a little over a year left.)

The amount they're requesting to collect is over $9,000.

Granted I've been negligent for a long time.. none of my other large balances like this have ballooned like this. In fact, the second highest amount I have listed in my credit report(and am paying off) is $2400, so this is by far the highest I've ever recieved a collection letter for.

I just sent a validation letter, and my question is: Are they allowed to ask for the interest and fees the other agency was not able to collect? (I never contacted them and never paid a cent on the account through them.)

Please share your credit knowledge! Thanks in advance!!!

[Robert Nashville/Savannah]

The creditor (and subsequent creditors usually) can charge whatever interest and fees are stipulated in the contract/instrument that created the account and IAW your state's laws.

Whether the specific amount they are requesting is appropriate or not; no one here can answer for you...you need to look at the original paperwork and/or get whatever information you can from the current creditor...you should, as part of your DV, request that they provide an accounting of all the fees and interest that support the balance they claim is owed.

[sarahcreditdetective]

Well of course I don't have a copy of the terms and conditions from that long ago.. and I think if I contacted the original creditor now the terms have changed and it would be useless information.

I didn't know I could ask for the accounting information in a DV letter.

I was re-reading the letter and it doesn't mention anything about the previous CA that had the account (though I know there was) in this sly little letter they actually state they bought it from the OC, Bank of America. Can I contact BofA for information as well, or just DV the CA?

Before I send my DV letter, I will add the sentaces about them justifying their fees.

[Robert Nashville/Savannah]

Well of course I don't have a copy of the terms and conditions from that long ago.. and I think if I contacted the original creditor now the terms have changed and it would be useless information.

Consumers who don't keep proper financial records, especially from as recently as just 4 or 5 years ago will always be in a weak position when it comes to issues like this. However, if you don't have them then you don't have them - just understand that not having your own records only weakens your position and strengthens theirs.

I didn't know I could ask for the accounting information in a DV letter.

I was re-reading the letter and it doesn't mention anything about the previous CA that had the account (though I know there was) in this sly little letter they actually state they bought it from the OC, Bank of America. Can I contact BofA for information as well, or just DV the CA?

Before I send my DV letter, I will add the sentaces about them justifying their fees.

No one is required to send you any of this information...you can ask for it and I would ask for it but don't expect to get it...you have no power to force them to provide this information unless a civil lawsuit is involved and then you'll have Discovery power available to you.

They don't have any reason or obligation to mention previous collection agencies (nor are they likely to do so) and if this letter is from the actual current debt owner and they are acting as "CA" on their own behalf then it may well be accurate for them to say, they bought the debt from the "Original Creditor" (whether BoA can legally be considered the Original Creditor is debatable and not settled yet - it will likely take one or more Federal Court rulings to settle that particular issue).

[sarahcreditdetective]

I don't save the credit agreements.. my husband (with stellar beautiful credit) never did either.. so BofA isn't going to be required to give me this information? From what I gather, they usually say something like "you agree to pay collection fees" which wouldn't give me specific information anyway.

I think I'll send the DV letter with the information requesting the accounting and fees collected.. under federal law they're supposed to at least give me that information right?

..I think there should be something in place.. caps or posted fees, because this is absurd. This fee is more than 3x the original, and more than 3x of any of the other debt I am trying to settle (that is just as old and just as large of a inital amount).

[Robert Nashville/Savannah]

I don't save the credit agreements.. my husband (with stellar beautiful credit) never did either..

Lot's of people don't save such records or keep good financial records in general - it's times like this that point out why those records should be kept.

so BofA isn't going to be required to give me this information? From what I gather, they usually say something like "you agree to pay collection fees" which wouldn't give me specific information anyway.

I think I'll send the DV letter with the information requesting the accounting and fees collected.. under federal law they're supposed to at least give me that information right?

If BoA was the original creditor (and is no longer) then they aren't required to give you anything nor are they likely to - they no longer own the debt (if I understand your prior posts correctly).

Even the current creditor isn't required to give you that kind of detail...it's reasonable to request it but the statutes don't require them to supply it.

The CA, whom you should be sending your DV to, is required to provide validation and, if the DV is timely, they are prohibited from continuing their collection activity until they do validate. However, what the law requires as "validation" is minimal. Regardless of what they are required to supply; you should request the information you need to make an informed decision about who you owe and how much or don't owe at all...keep pushing for the information until you get it.

..I think there should be something in place.. caps or posted fees, because this is absurd. This fee is more than 3x the original, and more than 3x of any of the other debt I am trying to settle (that is just as old and just as large of a inital amount).

Even though you don't have the cardholder agreement which stipulates what they can charge and when and even though the fees on top of fees they charge are borderline immoral, this is the trip you signed up for...I understand your frustration and to an extent I share it; but your situation is exactly why I haven't used a credit card in many, many years and never will again.

[sarahcreditdetective]

So you're telling me that BofA isn't required to give me info, the current collection agency isn't required to give me information, or justification of their charges and accounting, and it's perfectly justified they ask me to pay 3x the amount? They can send me a letter saying "pay 20 grand" and I'm not supposed to be allowed to make them prove it, or justify it? There's something not right there.

I'm just looking for something that I can work with, something more proactive that can allow me to work on my situation. I've been irresponsible for a long time, but there's something not right with this account. The fact that it has an opening balance similar to all my other accounts, but has $6500 more in interest than any other account just isn't right. I can tell you that I'm not going to pay $6500 in interest, it just won't happen.

I'm not ungrateful for your information Robert, it's just telling me that there's nothing I can do. There's limited room and leverage for me to work with, but I know there's something I can do.

I emailed my state attorney general, and am awaiting reply.

I disputed this on all my reports.

I asked for verification of the account including proof of accounting.

Does anyone know what term I can google to see what states allow to be collected? There's got to be some more rules more than what I've been able to find.

[jennieb]

CAs will throw anything out there (in past due fees, interest, etc) & what sticks (meaning they can always find someone who will pay whatever the CA wants), sticks. No, they don't have to give you an accounting of how they arrived at that balance - at least not until (& if) you get to court.

If this is the second CA trying to collect, my bet is that they don't have anything that legally proves the debt is definately yours or they (or the previous CA) would have tried to pursue it in the courts. I'd keep writing them, just to show them you're an informed consumer & won't roll over easy with their tactics.

By the way, I don't have any of my original agreements either. Most of the credit cards I used to use were applied for in the late '80s when I was young & single. Through subsequent moves & marraige & kids, they've gotten lost in the shuffle. When I've approached the banks that I did have cards with to get a copy of the original agreement, they tell me that they don't have copies either because they're purged on a cyclical basis!

[willingtocope]

Let me try to restate things a bit here....

1. CAs don't buy debts. Junk debt buyers (JDBs) buy debts. CAs work on commisions and / or contracts with either OCs or JDBs to hassle you for the money,

2. You can tell if the OC has sold the debt from your credit reports. Their tradeline will say "sold to another lender" and their balance will be $0.

3. If what you're dealing with are CAs, then the amount of validation they are required to provide under the FDCPA is minimal. Note that it is normal for either an OC or a JDB to farm the debt out to several different CAs (one after another) to see who can get you to cough up money.

4. However, if the CA (on behalf of either the OC or JDB) takes you to court THEN you can demand complete accounting of how they arrived at the money they say you owe. If, at the time, its a JDB that "owns" the debt, the chances of them being able to provide the approrpiate documentation is slight.

[Robert Nashville/Savannah]

So you're telling me that BofA isn't required to give me info, the current collection agency isn't required to give me information, or justification of their charges and accounting, and it's perfectly justified they ask me to pay 3x the amount? They can send me a letter saying "pay 20 grand" and I'm not supposed to be allowed to make them prove it, or justify it? There's something not right there.

Please understand that I am not suggesting that all the various and sundry fees and interest charges are “right” or even moral nor am I suggesting that a creditor and/or a CA on behalf of a creditor has the right to just add whatever fees they want to add.

What I’m saying is that a creditor has the legal right to add whatever fees and interest the contract (the instrument that created the relationship) stipulates…the contract who’s terms you agreed to, either actively or passively. To the extent the contract allows, that is fair…it’s fair because you willingly obligated yourself to that contract.

I am NOT trying to beat up on you here...I’m truly not…I’m just trying to throw a virtual splash of cold water in your face so that you, and perhaps someone else who reads this thread, will see just how bad debt is…will see just how reprehensible credit cards and the institutions that issue them truly are…as far as I’m concerned, credit cards and the people that invented them came straight out of the pit of hell.

I hope I’m not being unclear.

I'm just looking for something that I can work with, something more proactive that can allow me to work on my situation. I've been irresponsible for a long time, but there's something not right with this account. The fact that it has an opening balance similar to all my other accounts, but has $6500 more in interest than any other account just isn't right. I can tell you that I'm not going to pay $6500 in interest, it just won't happen.

Frankly, I applaud you for wanting to actually settle an old debt rather than just try to find a way to get out of it…I’ve taken a lot of heat over the years (not just on this board) when I’ve suggested that people who have the ability to pay or settle a debt they legitimately owe/owed should try to do so.

When a consumer is honestly trying to resolve a debt, I know it can get very frustrating when you try to get the information you need but you need to understand that, outside of the court room, a consumer has virtually no power to force a creditor (original or otherwise) or a creditor’s representatives (CAs) to provide the kind of information the consumer might actually need to make an informed decision about how to proceed. It’s unfortunate but that’s the way it is.

The Dispute/Validation process established by the FDCPA was simply never intended to be a substitute for the Discovery process that comes into play during a civil proceeding.

However, if you are clear that you are wiling to settle the debt for a fair amount and that you are simply seeking the information you need to make an informed decision, the creditor may eventually come around and work with you…you just have to keep pushing.

At the end of the day, if they simply refuse to work with or perhaps, as was suggested, they simply don’t have the information (not at all unusual), then at least you will have tried to do the right thing.

I'm not ungrateful for your information Robert, it's just telling me that there's nothing I can do. There's limited room and leverage for me to work with, but I know there's something I can do.

I emailed my state attorney general, and am awaiting reply.

I disputed this on all my reports.

I asked for verification of the account including proof of accounting.

I doubt your complaint to the AG will get any traction because, based on what you’ve said, the Creditor/CA hasn’t actually done anything wrong.

As far as disputing this on your reports; you may get lucky with that but you really need to familiarize yourself with what is commonly called the “623 method”.

Keep asking for what you need…keep REALLY GOOD records of everything that has happened (letters, phone calls, names, dates, times, etc).

I wish you well.

[sarahcreditdetective]

You stated:

When a consumer is honestly trying to resolve a debt, I know it can get very frustrating when you try to get the information you need but you need to understand that, outside of the court room, a consumer has virtually no power to force a creditor (original or otherwise) or a creditor’s representatives (CAs) to provide the kind of information the consumer might actually need to make an informed decision about how to proceed. It’s unfortunate but that’s the way it is.

*There is something somewhere that says they have to itemize the bill they send me, or it would be common practice for people to get outrageous bills for $10000 for a $20 dollar bill.. I just need to research it more. I work at a hospital, I'll go to our billing department if I have to, but I know theres a law in that department.

You stated:

However, if you are clear that you are wiling to settle the debt for a fair amount and that you are simply seeking the information you need to make an informed decision, the creditor may eventually come around and work with you…you just have to keep pushing.

At the end of the day, if they simply refuse to work with or perhaps, as was suggested, they simply don’t have the information (not at all unusual), then at least you will have tried to do the right thing.

*I won't pay a penny until I'm told what I owe $9,000 for. For all I know, this isn't the $2,000 dollar account I think it is, it's something totally different. And proof of their accounting is the only way they'll see my money. The SOL is up in a year.. if they won't help me to help them, then I'm marking days on the calender. Note- I am willing to do the right thing, but I'm not going to be pushed over. I could have just as easily filed bankrupcy when I got this letter and didn't.

I think the collection agency has been something wrong if they don't provide me with the information- which is sensible- so that's why I emailed the AG. At the very least they can send me some links about my state's laws.

..I will google "623 method" and I am keeping awesome records.. I have the letters, dates recieved, my letters sent, dated, with return reciepts.. etc etc.

I was told that if I didn't reply and it went to court, I could claim unjust enrichment.

Like I said before, thanks for the help. I'm just looking for more avenues to go down to get some of this interest- which is 100% profit.. taken away. If it comes down to it, I refuse to pay the lining in their pocket.

..on an off subject, the one local CA's we have in town, that I just went in to settle a $600 debt.. (ugh..).. the owner drives a brand new Mercedes.. black.. tinted.. washed daily.. and he parks it right next to the door.

That is why I'm not paying $6500 in interest.

[willingtocope]

Like I keep saying...

CAs don't buy debts. JDBs buy debts.

Its critical that you determine which you are dealing with. Under the FDCPA, if you DV a CA, all they are required by law to do is go back to the OC or JDB and send you the Original Creditor's name, the account number, and the amount of the debt. Period.

If the OC still owns it, call them...ask for a supervisor...tell them you are willing to settle, but you need a complete accounting of what they say you owe. If they tell you that you'll have to work with the CA, tell them it is your personal policy NOT to enrich such people, and if they want their money they'll deal with you directly or take you to court and you'll let the judge decide (follow this up with a CMRRR letter as proof that you tried).

If a JDB has bought the debt, tell the CA you refuse to pay without a complete accounting of what they say you owe (again, CMRRR). If they refuse, tell them to cease all contact and take you to court.

In court, you can use the discovery process to find out the details of what the money is for....