Can a debt collector charge interest or late fees on my debt?

The answer to this question depends on the type of debt being collected. Certain debts are subject to interest or late fees if they are not paid on time. In California, consumer debt defense law typically prohibits debt collectors from charging interest or late fees on consumer debts. Consumer debt includes debts the collector has purchased or accounts that the collector is attempting to collect, such as credit card debt, medical bills, and student loans. However, if a debt collector is collecting a debt that is not considered to be consumer debt, it can be subject to interest or late fees. These types of debts are typically secured debt, like a mortgage or auto loan, or a business debt, like a loan made to a business by a bank. In these cases, the debt collector may be allowed to charge interest or late fees, depending on the contract that was signed when the debt was taken out. Consumer debt defense law in California also prohibits debt collectors from charging unreasonable interest rates or late fees. If a debt collector attempts to add an excessive interest rate or fee to a consumer debt, the consumer should contact the collector to dispute the charge. If the debt collector still attempts to impose the charging, the consumer may be eligible to file a complaint with the California Attorney General’s Office.

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Can a debt collector charge interest or late fees on my debt?

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