Can a debt collector add interest to a debt, can they do it after og debt is paid?

[NekroG]

Im in CA we had Riverside public utilities, no contract signed.
when we moved they sent us to collections for about $340.
The debt collector account sez we owe like $470.
We just moved back to riverside and to turn the power back on we had to pay the past due, the $340.
So we paid that, but the debt collection company still wants the $130 difference, even tho the original debt is now paid with the original original owner of the debt.
Can they do this? if so, Can they Continue to charge interest on that interest?

 

[FlyingRon]

Yep. Just because you paid the principal doesn't mean you still don't owe the interest.
While you may not have signed a contract, you almost certainly had one.

However, you should contact the utility and see what the story is. They may have agreed to forgo the interest and that just didn't get communicated to the collector.

 

[NekroG]

So they can keep charging interest on top of interest if I dont pay the interest that the collection agency tacked on, even tho the original debt is paid?

 

[Zigner]

So they can keep charging interest on top of interest if I dont pay the interest that the collection agency tacked on, even tho the original debt is paid?

The ~$130 isn't all interest. It is also the collection fee that you agreed to.