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Midland sends 'statements' that accrue interest - FDCPA violation?


qbert
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They can if your contract allows it and it is legal by state law. Even if its legal it also depends on when they started charging the interest. Many of them go back and charge interest from the time the OC charged off the account. This is known as post charge off interest and in most cases its not legal. All that being said they still have to produce the correct contract that allows them to do this. Although its possible I doubt Midland knows anything about your account other than the basics. 

 

http://www.foxbusiness.com/personal-finance/2013/10/16/how-much-can-collectors-legally-boost-charged-off-debts/

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just wondering. are they legally allowed to add interest like this?

 

Some debt collectors are trying to figure out how to legally add interest and fees. Sending monthly statements is arguably one of those ways. It is my opinion, however, that the fees and interest charged are seldom those provided for in the original agreement or provided for by law. And, certainly, if no monthly statements are sent, the fees and interest is probably unlawful.

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California Civil Code (not Civil Code of Procedure) 3289:

3289.  (a) Any legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.
    ( B) If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach.
    For the purposes of this subdivision, the term contract shall not
include a note secured by a deed of trust on real property.

 

As I understand it a debt buyer can collect interest if the contract allows it or if allowed under state law. Not sure if one would supercede the other in certain circumstances. They can only charge interest from the day they buy it.

 

The rate of interest a debt buyer can charge is capped according to state law. My complaint had the JDBs interest rate listed at 7% and a dollar amount of that accrued interest.
 

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