Members of the public frequently fall victim to a relatively common scam perpetrated by many debt collectors. Many debt collectors will charge “collection costs” or “processing charges” or “service fees” on debts that they attempt to collect. There are times when debt collectors are allowed to charge money for the costs involved in collecting a debt, but only when such charges are allowed either by law, or from a contract signed by a consumer. However many debt collectors attempt to collect charges not authorized by a contract or otherwise allowed by the law. Knowing whether or not the charges are allowed may take a little bit of specialized legal knowledge and many debt collectors prey on members of the public my charging fees they are simply not allowed to charge. The New York Attorney General, alongside the Consumer Financial Protection Bureau have recently started pursuing cases against several companies they accuse of having engaged in these sorts of unlawful practices.
Unfortunately it is not uncommon for debts to increase a very large amount due to permissible late fees, penalty fees and interest fees so it can be very difficult for a member of the public to know if someone is trying to scam them in this manner. Speaking in very broad strokes, this particular violation of the law is not usually done by law firms, ACTUAL law firms, it is usually done by non-attorney debt collectors but there have been instances where law firms have done this as well. If you believe that a debt collector is trying to overcharge you on a debt, you may want to consider contacting a law firm such as our own for guidance. Our office charges no fee to review legal matters such as this.