Debt Collectors Add Surcharges, Additional Fees, And Everything But the Kitchen Sink

How Are Debt Collectors Calculating Your Total Owed?

I read with interest this National Law Review online post about consumers and attorneys filing class action lawsuits against debt collectors that have allegedly been tacking on the balance of unsuccessful garnishments to consumers’ accounts.

Unfortunately, it’s not uncommon for shady debt collectors to attempt to include various fees, interest, charges, expenses, balances, and more to consumers’ accounts when filing debt collection lawsuits–and no surprise, this is often illegal.

According to the Fair Debt Collection Practices Act (FDCPA), “demanding interest, surcharges, legal fees or collection fees that have not been agreed to, incurred or are not permitted under state or federal law.” So, attempting to collect anything other than the original debt incurred may be a violation of the FDCPA.

Then again, depending on state law and what the original credit card contract actually did specify, these additional fees may be allowed. It can be hard to determine if surcharges are legal  without a careful examination of the paperwork–a consumer attorney experienced in debt collection lawsuit defense will most likely review all paperwork for suspicious surcharges and added fees.

I will certainly be interested in the outcome of the MI class action lawsuits filed, as there is currently quite a bit of grey area in their state’s garnishment court rule regarding the issue at hand. In the meantime, I will continue to keep a close eye on debt collectors’ surcharges as I review my clients’ paperwork.

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