Debt collectors?

Question

if let's say a collection agency gets your bill from a hospital that is about $300 when you do pay that bill the collection agency adds up several fees (about 44 of them, not even kidding) which really are "cancellation fees, interest fees, closing account fees, opening account fees, management account fees, etc" and there are other fees to get your credit back to being good (which is $150 per company they have to contact) otherwise they don't contact your credit companies to restore the credit and you have to do that yourself.

is this legal? ethical?

Answer 1

No!

They are not allowed to do that.  You are to pay the "original debt" and reasonable interest (depending on how long it has been). --Is this something they told you over the phone?  Or did they really have the gall to send this in a letter?

Legally they have to "report" that the debt was paid to the credit reporting agencies.

They can not offer to "fix" your report if you pay them.  Besides why "pay someone" for something you can do your self.

Answer 2

Is it legal? Judging by your question I'd be inclined to say that is extortion. If you pay or settle a debt they have NO CHOICE but to update the listing on your credit report to fix that, they can't charge you a bunch of fees to do that. If they didn't update the listing you would have grounds to sue for FCRA violations, and in my opinion they violated the FDCPA by telling you that. You could consider it deceptive practice, or misrepresenting the legal status of a debt...take your pick.

Is this ethical? Well you are dealing with a collection agency, so the answer would be "NO!"

Answer 3

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Answer 4

probably legal if you look at the fine print, you probably agreed to paying fees if you didn't pay ..... ethical - nope.   I'd offer to pay them the original $300 and that's it, otherwise you don't have it and tell them that you will pay off a different debt and get back to them later.   The collection agency probably bought the $300 debt for $50-$100, so they'll take the $300.