Can a debt collector ask for more than the amount shown on my credit report?

Ask the Experts: Can a debt collector ask for more than the amount on my credit report?

I have a debt that I am trying to pay off. On my credit report it is showing a balance on $190, but when I contacted the company to pay this off they are now saying that I owe them $755.06. Can the company collect on the amount that is not being reported on my credit reports? - Rebecca

Hi Rebecca,

The first thing you need to establish is where that discrepancy comes from. The Fair Debt Collection Practices Act (FDCPA) requires that all debt collectors provide written validation of the debt they are attempting to collect.

You can send a written dispute to the collection agency, stating that the debt is only $190 according to your credit report and requesting that they validate where the debt originated and where that amount comes from. All collection activities should stop until they’ve responded to your dispute.

Chances are good that they’ll provide you with a document outlining all of the fees and interest charges that caused your debt to almost quadruple. Which leads to the next question: are those fees and interest charges legal?

Unfortunately, yes, they are.

Debt collectors can charge you interest, up to the maximum amount outlined in the original contract. It’s generally listed as the “penalty rate” in credit card contracts and it can soar past 30 percent, depending on the creditor.

Often states will cap the amount of interest a debt collector can charge, but those caps are for accounts that do not explicitly state a maximum interest rate (like a medical debt).

If the collector has validated the debt and shown you that the increased charges are legitimate, your next best step is to either work out a repayment plan or ask about the possibility of removing the extra fees in exchange for a full, one-time payoff of the original debt. You need to remember that debt collectors purchase old debts for pennies on the dollar. If the debt was $190, they likely purchased it for 60 percent of that. If the debt’s been sold multiple times, this collector likely paid even less. They may say no, but often they’ll be happy to collect what they can and be done with your account.

Good luck!

Ask the Experts

Do you know what's on your credit report?  Have you received collector calls and aren't sure if they're legitimate?  MMI now offers Credit Report Reviews - we can pull a copy of your credit report and review the information with you.  The service is free, but only available for a limited time, so visit our Credit Report Review page for more information and give us a call today!

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

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