Can Portfolio Recovery Associates add this much to an old credit card debt?
Today I received a collection notice from "Portfolio Recovery Associates, LLC" at my mothers address, which is where I moved a year ago when I lost my home (of 16 years) to foreclosure. The notice indicates the creditor is MBNA and the principle account balance is $1,148.21. The current balance of the account is 1757.86. I have a couple questions please.
The first is, what is the limit allowable by law that agents can charge for debt collecting?
Second, I recall this account clearly. In 2007, I sold my small business and contacted MBNA to pay off the account. At the time, the outstanding balance was around three thousand. They could not or would not give me a figure to pay the account in full. I was at the bank ready to have a cashiers check drawn to pay off the account. What I decided to do was send as close to what I "guessed" the pay off may be. The outstanding account balance was around $50. Five years later I am being billed for nearly $2000. Is it legal to mark up debt this much?
It certainly is immoral and unethical.
How can a debt collector claim I owe them 2000 dollars on a 50 dollar debt?
Portfolio Recovery Associates (PRA) is a debt buyer. Given the background info you gave, and your questioning the amount of the alleged debt, I would suggest you send them a letter requesting validation. Be sure to send certified mail return receipt requested. I can Sketch out some of what that letter would contain for you in a reply, but would first like to know what state you moved from and what state you live in now. If the debt is past the limitation for the collector to sue you in order to collect (statute of limitations), it will change things a bit.
The limit of fees, interest and costs that can be added to a debt that remains unpaid will vary. Generally the amount and timing of fees is outlined in your agreement with the credit issuer. You will need to look to that agreement (if possible) to know more. That said, junk fees are a big problem in the debt collection industry. It will be one of the issues you can raise in your validation request.
Drilling into the legality of whether a 50.00 balance can balloon to 2000.00 in your situation would require you (and them) to substantiate a whole host of details. Unpaid debts do indeed increase by obscene amounts in what I also see as an unfair practice. Kicking someone when they are down helps who exactly?
How is this account showing on your credit report? Is PRA reporting it?
Please respond in the comment section below and we can go from there.