Expert: Jason Shear, Esq. - 12/5/2008

Question
We had a business account with Advanta.  My husband told him the business was no longer in business.  He wanted the card changed to his name.  The company immediately closed the account(not at our request), told him that they could no longer deal with him as the account was closed. Prior to this Advanta had continually raised interest charges even though we had not had a late payment. We send a letter in writing with the dispute.  They contend they have never received said letter, have now raised charges to 40% on the disputed amount, and are calling multiple times daily.  Is there any way to handle this?

Answer
Mary:

Sorry to hear about your situation with this company.  First, you need to keep sending letters disputing the interest charges or any other charges you don't think they are entitled to.  Send the letters certified mail and keep a copy for your own records.  A 40 percent charge doesn't sound right no matter what state you are in.  Check your state's law regarding maximum interest charges and fees.  

Next, keep track of the principle amount you owe as compared to the other charges they are trying to add.  Therefore, if they try to sue, you have a detailed accounting of what is legally owed and what might be illegal interest or fees not called for in the contract.

In terms of the multiple calls a day.  Original creditors are not subject to the FDCPA and therefore to not have to abide by a cease communication letter or worry if they are harassing you.  However, original creditors usually only try to collect themselves for about 180 days before charging off the account and turning it over to a collection agency or selling the account to a debt purchaser.  At that point, these entities must abide by the Fair Debt Collection Practices Act (FDCPA).  Make sure you keep a copy of your dispute letters and accounting regarding this debt.  This account could be sold off to a debt purchaser who may sue a couple years down the road and you want to make sure you are prepared.

Hope this answers your question.  If you have any follow up questions do not hesitate to call.  

Jason Shear
Attorney at Law
(716) 566-8988