ByCan a Collection Agency Charge Interest on a Debt
About 28% of Americans are being followed by a debt collection agency. However, some of the collection agencies use unscrupulous methods in their operations. But ? Well, if you have a debt in the hands of a third party, concerns about what the agency can or cannot do are high. Although debt consumers are protected from harassment by the Fair Debt Collection Practices Act, some are not aware of their rights. This article will help you understand your rights, how to deal with a debt collector, and whether third parties can charge interest on a debt.
Although a debt collection agency can charge interest on your debt, the interest should not exceed what was agreed in the original contract. You can fight illegal charges on your own or through a third party like DoNotPay. However, stopping a collection agency on your own is a tedious and time-consuming process.
However, you can avoid the stress and save time by using the DoNotPay automated platform. DoNotPay also helps you learn how to negotiate with a debt collector, whether a debt collector can take your stimulus check, limitations of a debt collector in your state, or how to write a dispute letter to a debt collector.
Can Debt Collectors Agency Charge Interest on a Debt?
If you have a debt that has been handed over to a collection agency, here are a few questions to consider:
- How much interest can a debt collector charge?
- Can a collection agency charge more than the original debt?
- Can a collection agency add fees on the debt?
- How much can a debt collector charge
- When your debt goes into collection, does it accumulate interest?
All the above questions revolve around interest on debt and whether a . The answer is yes. A collection agency can charge interest on the debt, but the interest charged must be within the terms of the original debt contract. Some states also cap the amount of interest and fees that a collection agency can charge on a debt. So, how do I deal with debt collectors trying to charge me more than what I owe?
A debt collection agency may take advantage of your ignorance to charge you more than what you are supposed to pay. Before making the payments, check the following;
- The terms of the debt issued by the original creditor
- State laws and what they say about debt fees and interests
- The outstanding balance before the debt was handed to the agency
If the charges demanded by the collection agency violate the terms of the original debt or against the state laws, you should stop the debt collector from demanding the illegal charges. You can either stop the collector on your own, or through a third party like DoNotPay.
How to Stop a Collection Agency From Charging Unlawful Fees by Yourself?
You can dispute unfair charges or part of the debt by writing to the collection agency within 30 days after receiving a debt validation letter. Once you dispute the amount being demanded, the debt collector has no right to demand payment until the dispute is solved.
If the collection agency continues harassing you, you should report it to the Consumer Financial Protection Bureau (CFPB). There are ways to report a rogue debt collector, contact them here:
| Company | CFPB |
| Mailing Address | None |
| Phone Number | (855) 411-CFPB (2372) |
| Email or Contact Form | Complain Form Portal |
| Fax | None |
However, the process of stopping the debt collector from adding illegal fees is long and tedious. The debt collector could also be within their rights to charge you the additional fees. You can save time and avoid disputing legal charges by using the DoNotPay automated platform.
How to Stop Unfair Interest Charges With DoNotPay
If the debt collector charges interest on the debt, it is good to verify whether the interest is valid or not before disputing it. If the interest violates the terms of the original debt, you should dispute it. However, if the interest charged is within the terms of the original contract, you should pay it to avoid further complications.
DoNotPay automated platform helps you to assess whether the interest is valid, as well as dispute any unfair charges.
Here's how it works:
- Search “debt collection” on DoNotPay.
- Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.
- Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to the CFPB.
And that's it! Once you choose the course of action you want to take, DoNotPay will handle the rest. We'll deliver your request directly to the debt collectors via first-class mail, or file your complaint automatically with the CFPB so that they're no longer able to use unfair debt collection practices.
You can also check out our other credit products, including Credit Limit Increase and Clean Credit Report!
Why Use DoNotPay to Fight Unfair Interest
DoNotPay helps you solve issues around interest on debt in a fast, easy and successful manner. It is the perfect platform for stopping unscrupulous collectors.
What Else Can DoNotPay Do?
DoNotPay can also help you:
- Determine how long a debt agency can try to collect
- Discover how often debt collectors can take you to court
- Understand ERC debt collection and medical debt collection.
To fight unfair interests for help.