Can they add more fees to a disputed debt?

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Dear Debt Adviser,
I owe money, which is and has been under dispute. The debt was given to a collection agency. Each time the collection agency sells the debt, the amount that the next collection agency is trying to recover increases, and so on and so on. This disputed debt that was for several hundred dollars has increased by several hundred additional dollars. Can they do this? Is it legal to tack on these fees? Pretty soon, the fees and add-ons are going to be higher than the original amount.
— Dennis

Dear Dennis,
Yes, depending on the laws in your state, certain fees are legal to add to collection accounts. And no, simply continuing to dispute the debt will not keep the fees from being added. If you want to stop the fees, pay the debt in full, or take your dispute to the next level: a legal level. But resolve the dispute — don’t just continue it forever!

The Fair Debt Collection Practices Act, or FDCPA, allows for two types of fees to be added to a debt while in the collection process. The first type includes interest charges, late fees, etc. — all of those fees that are part of the original contract that resulted in the debt. The second type is any other fees that are permissible by law such as legal and collection expenses.

It sounds as if you know the debt is yours but are disputing that you still owe it, whether in full or in part. I suggest you start at the beginning, by asking the collection agency to provide you with validation that the debt is yours. If you make that request, they must send you documentation. Many times, this is missing in older debts, especially ones that have been sold over and over. If they can’t provide validation, collection activities must stop.

Next, if this is a truly old bill, you might want to check the statute of limitations for collecting a debt in your state. If the debt has been sold numerous times, it could be that the debt is nearing the time when it can no longer be collected legally. When the statute is up, you can communicate with the collection agency that the debt is past the statute and is no longer collectible. This, too, will end your problem.

If you believe you have a good case for dismissal of the debt due to your reasons for disputing it, I recommend you consult with an attorney to determine if you have a case. Suing collection agencies for pursuing debts unlawfully and for other violations of the FDCPA is not unusual. In fact, the law stipulates that an individual is entitled to any actual damages and, when filing an individual lawsuit, up to $1,000 in statutory damages if you prove your case.

Of course, depending on what you currently owe, the legal fees to pursue the collector may end up costing more than your disputed debt. Only you can decide if the principle is worth what it may cost to pursue the matter legally.

In the end, I suggest you get this disputed debt behind you one way or the other, and get out there and enjoy your life.

Good luck!

Ask the adviser

To ask a question of the Debt Adviser, go to the “Ask the Experts” page and select “Debt” as the topic. Read more Debt Adviser columns and more stories about debt management.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.