illegal to charge late fees?

Discussion in 'Credit Talk' started by sprungli, Aug 28, 2003.

  1. sprungli

    sprungli New Member

    My doctor had billed me for an appt and then added a late fee...I paid the bill but not the late fee which i disagreed with...he kept charging $25 fees on top of the remaining late fee...(the principal had been paid)...so $25 became $50 and on and on...so now it's gone to collection and it's about $150!

    Isn't it illegal to charge a finance charge (or late fee) on top of a late fee?!
     
  2. SoParkDiva

    SoParkDiva New Member

    If you're late paying your credit card bill don't they keep charging you a late fee until the bill is current?

    If X CC company charges you a late fee on $100 and you pay the $100 but not the late fee. It's still late and they can continue to charge you a late fee.
     
  3. Flyingifr

    Flyingifr New Member

    It depends on whether the doctor gave "fair notice" of the charges. Fair notice would be a ststement on a piece of paper you either were give on signed, or a sign prominently posted in the public area of the doctor's offices.
     
  4. GEORGE

    GEORGE New Member

    Was it like 4 or 5 months AFTER service was rendered???

    If yes...a LATE FEE MAY BE LOGICAL or INTEREST tacked on...

    I PAY BEFORE I LEAVE...BUT THAT IS ME...
     
  5. Butch

    Butch New Member

    Hi Sprungli,

    First, they may not charge a late fee unless it's stipulated in your financial responsibility agreement you signed when you first saw the Doc. Since I know you don't have a copy, go get one or have them fax one to you. :)

    Second, what you're referring to is called "pyramiding late fees" and you're right, they cannot do that. If your bill is $100 and you pay late, they can add the late fee, as long as it's in the contract. Once you pay the principal, but not the late fee, they may not pile on one late fee after another to increase the balance.

    Now wouldn't you know it. Just last night I read case law about this very issue, so I do know I'm correct. Right now I just can't remember where I saw it. I'll look for it. Heintz v. Jenkins, btw, was about an atty. attempting to collect more than what was owed.

    But until I can find it and prove what I'm saying I have to qualify my remarks.

    :)
     
  6. sprungli

    sprungli New Member

    Awesome! Thanks, Butch...I was thinking that it couldn't be right for them to just pile on these fabricated fees...Thank you for your help!
     
  7. sprungli

    sprungli New Member

    p.s. George: it was 15 days after the visit! (which is why I refused to pay it in the first place!)
     
  8. Butch

    Butch New Member

    Well ... I can't find it right now Sprungli.

    Sorry. I'll keep tryin.

    .
     
  9. GEORGE

    GEORGE New Member

    Re: Re: illegal to charge late fees?

    15 days is NOT LATE even if they ask for payment BEFORE you leave the office!!!
     
  10. sassyinaz

    sassyinaz New Member

    You just need to request validation, sprungli, the FDCPA covers that.

    It is also covered under the FCBA, but that doesn't apply to medical bills.

    Heintz v Jenkins isn't really applicable, the whole point of that case primarily was the validation requirements and mini-miranda wording as it applied to attorney's communications as a debt collector versus being exempted under the FDCPA. It changed the entire interpretation of the FDCPA too. It's a great case, but not here.

    So, send a validation letter to the CA, the additional fees and interest are covered there.

    If you want to address the OC, since it's a doctor, look to your state's unfair and deceptive businesses practices act. It won't go that far though, because it is a medical bill, there is never interest on medical bills (save plastic surgery) and would have to have been part of your original agreement with the Doctor to be allowed -- most doctors don't go there.

    Getting the original agreement is the key, showing you agreed to it or NOT, required as part of validation -- it is unlikely you'll be receiving one.

    Collection activity has to cease until and if it is ever provided, that will take care of that TL and doctor's don't report directly.

    Sassy
     
  11. Butch

    Butch New Member

    Re: Re: illegal to charge late fees?


    Incorrect Sassy.


    Darlene Jenkins sued attorney Heintz and his law firm for violating the Fair Debt Collection Practices Act by attempting to collect unauthorized amounts.

    Darlene Jenkins filed suit against the collection atty., Heintz, for violations of

    § 808. Unfair practices [15 USC 1692f]

    the following conduct is a violation of this section:

    (1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.





    Before the district court, the defendants (Heintz) moved to dismiss Jenkins' suit, arguing that attorneys who file suit to collect debts are not covered by the Act. The district court agreed and dismissed Jenkins' case.

    Jenkin's appealed. The case made it to the Supreme's for a decision on the applicability of the FDCPA to atty's.

    It was the U.S. Supreme Court Appeal which had to do with whether or not the FDCPA applies to Atty's.

    The "case" most certainly DOES apply here.

    .
     
  12. madison

    madison New Member

    What did the doctor's office say when you spoke with them?
     
  13. sassyinaz

    sassyinaz New Member

    Re: Re: Re: illegal to charge late fees?

    No it doesn't, that is just what I said...

    § 808. Unfair practices [15 USC 1692f]

    the following conduct is a violation of this section:

    (1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.


    And how do you determine that if not validation???? or having all the documentation yourself?

    Exactly, you can't!!!!!!!!!

    And it still doesn't address the issue of pyramiding.

    Here's the case: http://www.edcombs.com/CM/Opinions/opinions134.asp

    http://supct.law.cornell.edu/supct/html/94-367.ZS.html

    It's all about the terms in the underlying agreement, which is validation.

    The plaintiff in this case, Darlene Jenkins, borrowed money from the Gainer Bank in order to buy a car. She defaulted on her loan. The bank's law firm then sued Jenkins in state court to recover the balance due. As part of an effort to settle the suit, a lawyer with that law firm, George Heintz, wrote to Jenkins's lawyer. His letter, in listing the amount she owed under the loan agreement, included $4,173 owed for insurance, bought by the bank because she had not kept the car insured as she had promised to do.

    Jenkins then brought this Fair Debt Collection Practices Act suit against Heintz and his firm. She claimed that Heintz's letter violated the Act's prohibitions against trying to collect an amount not "authorized by the agreement creating the debt," § 1692f(1), and against making a "false representation of ... the ... amount ... of any debt," § 1692e(2)(A).

    The loan agreement, she conceded, required her to keep the car insured " 'against loss or damage' " and permitted the bank to buy such insurance to protect the car should she fail to do so. App. to Pet. for Cert. 17. But, she said, the $4,173 substitute policy was not the kind of policy the loan agreement had in mind, for it insured the bank not only against "loss or damage" but also against her failure to repay the bank's car loan. Hence, Heintz's "representation" *294 about the "amount" of her "debt" was "false"; amounted to an effort to collect an "amount" not "authorized" by the loan agreement; and thus violated the Act.


    Sassy
     
  14. sprungli

    sprungli New Member

    Madison: i didn't speak with the doctor's office coz usually I think verbal contacts are pointless...when I sent the original payment I had declined to pay the late fee and wrote them why...they continued to send monthly late fees on late fees, and then it mushroomed into this :(

    thank you everyone for your help...trying validation now, then we'll see...I may write the doctor a letter just to alert him that his billing system is screwed up (thinking he may intervene)...
     
  15. Butch

    Butch New Member

    Re: Re: Re: Re: illegal to charge late fees?


    My point Sprungli, (lest it should be lost in all the superfluous bantering) is that cases do get filed for the attempted collection of amounts in excess of that which is authorized, which is how Jenkins V. Heintz began.

    .
     
  16. Butch

    Butch New Member

    Re: Re: Re: Re: illegal to charge late fees?

    BTW - this probably happens a LOT. lol

    I'm thinking this may be a primary reason why validations are not forthcoming. If a CA attempts to collect MORE than what is owed, they'd be stupid to prove it in writing.

    Their best bet, ignore your demand for validation.

    Ergo - no validation, PLUS continued collection activity = violation.

    :)
     
  17. sassyinaz

    sassyinaz New Member

    Re: Re: Re: Re: illegal to charge late fees?

    No superfluous bantering either, it's plain irrelevant and guessing until and if validation is ever provided.

    And, it likely won't be, especially since it's medical.

    You better be nice, Butch, or I will tell Jlynn on you!!!!!! ;-)~~

    Sassy
     
  18. Butch

    Butch New Member

    Re: Re: Re: Re: illegal to charge late fees?

    http://www.yourcredit.com/memb/laws/federal/usc/cpr.PDF?



    http://www.ftc.gov/bcp/conline/pubs/credit/crdtrul.htm

    How can late charges be assessed?
    A creditor can charge a late fee if you do not make your loan payment on time. However, it is illegal under the Rule for a creditor to charge you late fees or payments simply because you have not yet paid a late fee you owe. This practice is called "pyramiding late fees." Under the Rule, this means that if you do not include the late fee you owe with your next regular payment, it is illegal for a creditor to subtract the late fee from your payment and then charge you a second late fee because the current payment is insufficient. For example, your loan contract may state that your monthly payments are $100 and that you will be assessed a $10 late fee if you pay after the grace period. If you make your $100 loan payment after that time and you do not include the $10 late fee with your next $100 payment, a creditor cannot first deduct the missing $10 late fee from the $100 payment, claim you have now paid $90, and then charge you an additional late fee. But, if you skip one month's payment entirely, the creditor can charge late fees on all subsequent payments until you bring your account up to date.

    .
     
  19. sassyinaz

    sassyinaz New Member

    Re: Re: Re: Re: illegal to charge late fees?

    Butch,

    That doesn't apply to medical bills, nor does the FCBA.

    Sassy
     

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