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Home > Ask The Get Out of Debt Experts > Zwicker & Associates is trying to add interest charges on a bill I’ve been paying off, but they never informed me they were doing so. – Shelia

Zwicker & Associates is trying to add interest charges on a bill I’ve been paying off, but they never informed me they were doing so. – Shelia

I had a court date for a Target bill that I could no longer keep up with due to unexpected circumstances beyond my control.

Target got Zwicker to represent them. I actually had gone into debt consolidation, but the debt consolidation agency couldn’t include Target because I had JUST been notified about going to court.

When I went to court, a local Zwicker lawyer called me outside to and we agreed on a settlement to pay off the amount listed on the docket paperwork. I have been sending those payments two weeks ahead of their due date, and I have never been late since I made the agreement.

Now, just over a year later, I find out that they have been charging interest on the amount, and according to Zwicker, they say I owe more than that original payoff amount!

There is NOTHING anywhere in writing that says they would be charging interest, and nothing stating an APR amount. The manager at the Zwicker toll-free number that I called said, when I pointed that out, “What makes you think we wouldn’t be charging interest?”

She said that I agreed to pay interest to Target. I told her this agreement was with Zwicker, not Target, and there is no verbal or written agreement saying I’d have to pay interst over the agreed-upon payoff amount, and if the local Zwicker lawyer I made the agreement with had told me this verbally, I would have asked for that in writing.

I asked the woman on the phone why they don’t send statements or correspondence via snail mail or email. (Note: Through the debt consolidation company I’ve been dealing with, I can always go online and see what my balance is.) She said they don’t have to send statements because they’re a law firm, not a collection agency. But they ARE a collection agency!

They even say on their phone messages that any information they receive will be used to collect a debt. Does that not make them a collection agency?? They use that verbiage to weasel out of sending statements, and they do not make it easy to communicate. I have a snail-mail address, but no email address, and they have no web site available for people like me to access to keep abreast of my balance.

There is no communication FROM THEM via snail-mail or email. The ONLY way I found out that they had been adding this interest behind my back without informing me was, I called them to make sure they had received the payment I mailed them on Dec. 15, 2011, for the payment that was due on Dec. 31, 2011, since the check had not cleared as of Jan. 4, 2012.
So, my question is, how can they say I owe interest if I was not informed of this, and if it is not in writing?

Thank you!

Shelia

Zwicker & Associates is trying to add interest charges on a bill I've been paying off, but they never informed me they were doing so. - Shelia by

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  • http://GetOutOfDebt.org Steve Rhode

    1. My assumption is that the collector or debt buyer would be limited to charge interest in accordance with the last terms of the account prior to it being charged off. Of course they could charge fees and penalty rates in accordance with those last terms unless the court changed the terms or the settlement offer specifically stated no interest would be charged.

    2. The claim that the collection agency, or in this case a law firm, is not required to send a statement is interesting I believe the creditor is still be required to send a periodic statement under Regulation Z Sec 226.7. Even though Zwicker is collecting there must still be a creditor? 

    A collection or defaulted account does not seem to be exempted from Reg Z.

    It would be interesting for you to raise that statement issue with Zwicker and see what their answer is regarding the requirement under Regulation Z to send periodic statements.

    Steve

    • Fitz

      As to #1: I think it is fair to say that you are correct. Much will depend on the state the case is in and the cause(s) of action. For example, if it is a breach of contract action based upon a written agreement, the contract terms would apply as far as interest rate, costs, atty fees, etc. and the court would apply them. Post judgement interest will again depend on state law as some states allow the contract rate to continue and some have a statutory judgment rate. Non breach of contract cases (account stated, common counts, etc.) are much better for the consumer. I willing to bet that a Target account brought by Zwicker is a contract case that is pretty tight, although errors do occur. It is critical to see how the court resolved this case. Remember, many of these stipulations specifically state that the creditor will not be sending out monthly statements or billings.

      #2 in much more interesting and, unfortunately, unclear. I’ve seen some creditors (Discover and Cap One being the most prevalent) who insist upon sending the billing statement, stating they are required to as you suggest (although this practice/policy seems to be very inconsistent). I don’t believe a collection law firm who has filed suit is required to do so. I’m assuming that Target is a judgement creditor in this particular case. I personally do not have much occasion to make the Reg Z argument because as a practical matter, my settlement stipulations naturally address interest, etc. When there is some confusion as to the settlement terms and an item such as interest is not addressed, most courts are going to go strictly by the written terms of the stipulation. If it does not specifically include interest, they wont enforce interest. If it does, of course they will add it. As a practical matter, in these state limited jurisdiction matters, courts do not want to hear about Reg Z at all and believe, if anything, that any violation is a separate matter. All they want to know is do you owe the money and naturally, the tendancy is to believe that interest is included. The finer points of federal laws such as Reg Z are seldom understood, let alone applied.

      Shelia may have a good argument to the court that had there been Reg Z compliance (a billing statement received) she would have known about the interest “discrepancy” and addressed it sooner with Zwicker and the court and that if there is some ambiguity in the settlement, it should be resolved in her favor. I can see the court saying, that’s a different issue and he/she will enforce the judgment or payment arrangement as they, the judge sees fit.

      Lastly, taking these points to Zwicker is like going down a rabbit whole. I know and have debated such things with upper managment lawyers at Zwicker ad nauseum. I respect them, but rarely agree with them on these issues.

  • Fitz

    moral of the story: put everything in writing, especially when dealing with any creditor, be it  the original creditor, a collection agency, a debt buyer, or collection lawyer. This isn’t so much because they may deceive you (which some, but not all, will), but even they do not know what deal they made. If they refuse to put it in writing, refuse to make an agreement. One last point: as you were in court, I’m guessing there is some type of court record of a settlement or dismissal or something to reflect the events of that day in the court hallway. Please check the court file. You may find it benefits you.

  • Fitz

    moral of the story: put everything in writing, especially when dealing with any creditor, be it  the original creditor, a collection agency, a debt buyer, or collection lawyer. This isn’t so much because they may deceive you (which some, but not all, will), but even they do not know what deal they made. If they refuse to put it in writing, refuse to make an agreement. One last point: as you were in court, I’m guessing there is some type of court record of a settlement or dismissal or something to reflect the events of that day in the court hallway. Please check the court file. You may find it benefits you.

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