By: Robert J. Nahoum
Youâ€™ve been getting phone calls and letters from a debt collector on an old credit card bill.Â The amount they are trying to collect seems to be a lot more than you thought you owed. What can account for the larger than expected balance?
Could it be interest?
Federal debt collection laws known as the Fair Debt Collection Practices Act (FDCPA for short), regulates the conduct of third party debt collectors including collection agencies, junk debt buyers and debt collection lawyers.Â Debt collectors subject to the FDCPA must not use false, misleading or harassing debt collection tactics.Â One of the precluded debt collection tactics is collect or attempting to collect any interest or fee that is not authorized by the underlying agreement or by law.
The interest rate or fees charged on a debt may be raised if the original loan or credit agreement permits it.Â However, as a practical matter, most debt collectors, debt buyers in particular, stop charging interest after they charge off the debt.Â There a number of reasons why they do this but as general matter, debt collectors stop charging interest on charged off debts to free themselves from regulatory and evidentiary requirements.
For example, under the federal the Truth in Lending Act, if a debt collector wants to charge interest on a charged off debt, they are required to send monthly statements to consumer.
Also, under the FDCPA, if the debt collector is attempting to collect a debt including post-charge-off interest, they must clearly and effectively disclose that they are charging interest to the consumer in its debt collection communications.Â Disclosures like this are a moving target that is subject to change on a daily basis.Â Failing to disclose these changes effectively may be a violation of the FDCPA.
WHAT TO DO
If a debt collector is trying to collect a charged-off debt including interest, speak with an experienced consumer protection attorney familiar with the FDCPA to see if what the debt collector is doing is authorized. Â If a debt collector violates the FDCPA, you can sue for statutory damages up to $1,000.00 plus actual damages (like pain and suffering) and your attorneyâ€™s fees.
If you need help settling or defending a debt collection law suit, filing for bankruptcy, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.Â With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C