The Fair Debt Collection Practices Act, (FDCPA) prohibits collectors from collecting any amount unless the agreement you signed when you took out the loan states that they can add fees, penalties, etc. for such amounts to be legal.
If the contract doesn’t specifically say that fees, penalties or other “extras” are allowed, they can be added if such a charge is specifically permitted under state law. If the contract doesn’t allow collection of additional amounts, or if state law prohibits it, debt collectors cannot collect additional sums.
In California, collection agencies can add interest to your balance under state law, as long as the agreement authorizes it. You are entitled to receive an explanation from the collection agency about how much they are charging you and why. If you believe they are violating the terms of your agreement, contact The Law Offices of Todd M. Friedman for a free consultation at (877) 449-8898. We will tell you whether the collector is violating the Fair Debt Collection Practices Act and advise you on your legal rights. Consumers who have been mistreated by debt collectors can be entitled to attorneys’ fees, court costs and compensation.