Contingency Fees

[texmedic]

What is the name of your state? Texas (Indiana is where it happened)


Does anyone have any idea if it is legal to collect "contingency fees"? My wife has paid a debt to the original creditor and the CA is still after their fee, one third of the original balance. I just spent the last several hours trying to find this online and struck out. I am about to send them a nastygram and I wanted to see if any of you had any idea, or maybe where I could look that I haven't already. This directly deals with the Debt Collecting act (can't remember the proper name, its late) section 808 I believe...something about debt collectors can't charge fees above and beyond the original debt, except as provided by state law. We live in Texas now, but the debt was incurred in Indiana. I looked in the Indiana state code and found nothing, or at least nothing I could decipher Any help would be appreciated.

 

[olgethorpe]

Hmmm....

What you're looking for is the Fair Debt Collection Practice Act (FDCPA). You can find a link to it with a lot more info at www.creditinfocenter.com

As to whether the collector can charge fees, that may be covered in your original credit card agreement.

 

[Ladynred]

They cannot collect any 'collection fees' UNLESS its provided for in your original credit card agreement AND its allowed by state law.

 

[racer72]

As to whether the collector can charge fees, that may be covered in your original credit card agreement.

I just found a line from a credit card offer from a major US bank and I would bet this same exact line is included in virtually all credit card offers.

As a card holder with BankXXXXXXX, you will be held liable for any and all collection costs, including those from second and third party collections. These fees and costs may include court costs and attorney fees, interest up to the maximum allowed by state or federal law, collection agency charges and fees, and any other legitimate costs required to lawfully collect any outstanding balance due.

By letting the debt get far enough behind that the original creditor sought the services of a collection agency would fall squarely in your lap.

 

[Ladynred]

Yes, that probably IS in most credit card agreements. Now the OP needs to check his/her state laws to see if state law allows it.

 

[texmedic]

Alrighty then,

There is a wrinkle...I should have stated in the beginning that this was a medical collection account. My wife lost our first child and the OBGYN "found" something that he "forgot" to bill us for. This occurred in Indiana several years ago. We have paid the Dr and the CA is sending us a bill for $11.10, or 1/3 of the original debt ($37). I know that this is a trivial amount, I am just curious to see if we can tell them to go pi$$ up a rope. I spent several hours last night digging through the Indiana state code to no avail. I couldn't even find anything remotely close to "contingency fees" in any of their laws. I could not begin to tell you if this was something that was addressed in the "contract" the was signed before my wife had her surgery. It really wasn't the first thing that was on my mind Thanks for all of your advice thus far. And BTW, the Astros just CHOKED

 

[bigun]

If they can't prove they've right to collect this amount,they owe you a $1000.

http://www.ca7.uscourts.gov/op3.fwx?submit1=showop&caseno=03-3194.PDF

Is this on your credit report?