Can they keep applying charges once a/c passed to debt recovery?

nmcnelis

If an account has been passed to a debt collection agency can the bank continue to apply charges and interest?

HHH_2

I'm not sure but my debts which have been passed to DCAs have had interest frozen on them and I no longer hear anything from the CC companies or the bank. Hope that helps but I dont know if it's true in all cases.

earthmother

I've never heard of charges carrying on after a DCA took on the debt, but I don't know if it's a rule as such - just not happened in my experience.

RAS

HI

It is however known for banks to add the total value of the interest payable to the amount owed when it is transferred to a DCA - in-house at least.

Donedoingdebt

As RAS says, if it's a loan that's been passed over, then the total debt is usually the loan amount plus the interest over the original proposed payment period (TOTAL AMOUNT REPAYABLE). The DCAs do not usually add any further (COMPOUND) interest to the debt.

AGB863

There is the possibility that charges can be continue to be added to your account.

The bank is within it's rights to get a DCA to "work" for it and collect the outstanding balance.

I have had a number of cases that the bank will stop adding interest once a repayment plan is agreed, but they usually put in a clause, that if you default on the plan that they are within their rights to add all the interest and charges that not been added whilst you are making reduced payments.

If the debt has been sold to a DCA the majority of collectors do not continue adding interest to the account - but there are a few who do until a repayment plan has been agreed.

nmcnelis

Thanks for all the responses.

The situation is pretty much as AGB863 described - they will stop adding interest/charges once a repayment plan is agreed. I had never heard of that before though...you learn something new every day!