The Fair Debt Collection Practices Act, or FDCPA, prohibits a collector — including collection agencies, bad-debt buyers, and lawyers — from collecting or attempting to collect any amount unless such amount is expressly authorized by the contract or agreement creating the debt, or is permitted by law. 15 U.S.C. § 1692f(1). This includes the addition of interest, collection fees, and attorney’s fees.
If, for instance, you borrowed $1,000 from the credit union, and now the collection agency is asking for $1,000 plus interest, plus some other fee, then you might be a victim of collection abuse.
Collection Agencies Regularly Add Collection Costs to the Debt.
The addition of interest, collection fees, and other charges has become common place for many Arizona collection agencies. In fact, adding 50% to an apartment debt is almost universal these days. The answer to whether such charges or fees are legal is not always clear.
Many Arizona landlords, at the direction of their collection agencies, have added clauses to their lease agreements providing that collection fees will be added to the balance owed in the event the debt is assigned to a collection agency. Some of these collection agencies even specify a certain percent to be added, such as 30% or 50%. Then, on top of these fees, the agencies will add interest. Soon, a $1,000 debt becomes $1,500 then $2,000. When a collection lawyer gets involved, attorney’s fees are added effectively doubling or tripling the original amount claimed to be owed.
Arizona Consumer Sues Tempe Collection Lawyer Over Addition of Attorneys Fees.
My office recently filed suit against a Tempe collection lawyer, Mark A. Kirkorsky and his law firm, Mark A. Kirkorsky, P.C., for adding $3,753.62 in attorney’s fees to a deficiency balance of $13,543.27 on a repossessed truck. That is a 27% surcharge for the lawyer’s fees! All that had been done at that point was the mailing of one form letter.
Even though the loan agreement provides attorney’s fees in the event of legal action, these fees were added in the very first letter sent to the debtor. Our lawsuit alleges, among other claims, that the addition of these fees was illegal under the FDCPA.
What Can Be Done?
If you are an Arizona consumer and have received a collection letter or collection lawsuit showing the amount claimed to be owed is more than it should be, then you need to determine if the collector is overreaching and violating the FDCPA. If so, then not only should you not pay the illegal fees or charges, but you also have a claim against the collection agency or law firm for violating your rights under the FDCPA.
If you think your rights have been violated,
Call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 to set up a free consultation.