Cabot Financial & interest

bluemonday3

Hi

Quick question, Do you debt collection agencies usually charge interest?
I am in a DMP with CCCS, 2 years in and have difficulties with Lloyds but I wanted to check on debts passed onto DCA and have found that Cabot are adding interest to one debt passed onto them but not another.
Any advice will be appreciated.

fermi

Depends. If there is provision to do so in the original contract/credit agreement then they can.

bluemonday3

ok, so do I have to check the credit agreement from the original creditor. Admitted it is a large debt approx 5800 but I wasn't expecting interest to be charged. It was charged in May and June but nothing since??

fermi

Depends on the terms of the loan.

Most will say that when defaulted all the value of the loan and interest becomes payable immediately. If so, then once that is added no more interest should be applied.

bluemonday3

Thanks for this info. It is an old credit card debt originally with Egg. I have emailed them to see if they will not add further interest.

fermi

OK. For some reason I thought you said it was a loan. Must have misread.

It's most likely that any CC agreement would allow interest to keep accruing on any outstanding balance.

bluemonday3

ok, thanks, I will contact them to ask them to consider withholding interest. It's a bit bizarre how they have applied it as it was applied as 'interest' on 29/5 and then 'penalty' interest shows as a transaction on 29/6 but no debit added. Then on 30/6 'manually accrued' interest was added and then nothing else.

bluemonday3

P.s the other debt I have with them is also credit card and no interest has been added at all to that account.

fermi

Who was the other card with?

bluemonday3

Thanks for this, sorry I have got it mixed up the large CC debt which is getting the bizarre interest is originally citi cards and the egg one is not accruing interest but they have both been passed on to Cabot although another company called Clarity pass on the contribution I make via CCCS. Not sure if this would make a difference?

fermi

Without seeing the agreements it's impossible to tell. As said though, generally they would be allowed to continue with interest on a CC agreement.

That doesn't mean they always will, even if they are allowed to.

DCAs are pretty inconsistent on that.

Certainly can't do any harm by asking them to stop though.