Collection Agency Charging Interest and Wants Bank Info

A collection company contacted me about a debt that that is only 2 months old. The person I owe just sent me a bill 3 weeks ago. This debt collector told me I was no longer eligible to contact the person I owe, and that all payments need now to go thru them. I was told that a down payment was required of one third of the total amount was needed to avoid a daily intrest accruing at a rate of 10%. I was also told that they needed my banking information was needed, including my banks routing number. Is this correct?

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Mar 18, 2011
Collection Agency Charging Interest & Wants Bank Info

Thanks for getting in touch. First, do NOT share any financial information with the debt collector including your bank routing number, account number, etc. No law obligates you to give the collector that information and if you do, the collector may take money out of your account without your permission and it could be difficult, if not impossible to get the money back.

Whether or not the collector can charge you interest and if it can how much interest it can charge is a more difficult question to answer. In part it will depend on whether or not your agreement with the person to whom you owe the debt allows interest to be charged and what the law in your state says.

I recommend you take two steps. First, write the collector a letter to ask that it validate the debt it says you owe. Send your letter via certified mail with a return receipt requested. The collector is legally obligated to respond to you in writing and cannot take any actions to try to collect what it says you owe until it provides the validation. Second, consult with a consumer law attorney in your area who helps people resolve their debt collection problems. The attorney will be able to answer your question about the interest.

I also recommend that you purchase a copy of our book Debt Collection Answers so that you understand all of your rights when you are dealing with a debt collector. You can get our ebook Debt Collection Answers here.

Good luck!

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