Dear Consumer Ed: 

If you enter into an agreement with a collection attorney to pay off a debt can they charge interest per year?

Consumer Ed says:

If the interest is being charged by the creditor who holds the debt, it is permitted if this was included in your debt agreement.  If the interest is being charged by the collecting attorney, it is allowed provided that it was disclosed to you as being a part of the agreement you entered into with the collector. 

You are entitled to an explanation from the collection agency as to how much they are charging you and why; you should make this request in writing.  Never sign any agreement without first reading all of the terms and conditions.  You should also discuss (and document) any concerns you may have as to the validity of the additional charges with the debt collector.

For more information on the protections offered to you under the Fair Debt Collection Practices Act (FDCPA), please visit the ConsumerEd.com website. If you believe that your rights have been violated by a debt collector, you may file a complaint with the FTC, the federal agency that enforces the FDCPA.  You can contact the FTC online at www.ftc.gov or by phone at 877-FTC-HELP.

To file a complaint against a debt collector who is an attorney, contact the State Bar Association of Georgia, either online at www.gabar.org or by calling 800-334-6865.  Remember that even if the debt collector violates the FDCPA, that does not erase any legitimate debt you owe.

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