Expert: Michael Brotherton - 6/20/2008

Question
I have a time share that I have to pay yearly maintenance fees.  I usually make these payments after receiving my income tax refund.  I missed making a payment in 2007, so now I am making 2 payments this year to catch up.  Since my payments were late, they went into collections.  I called the collection agency to make the payments only to find out that they are charging me a 35% collection fee for this account.  Since I have 2 units with this time share, my collections fees alone are $543.00.  Can they legally charge that much for collection fees (35%)?  I have the money to pay my account, but not an extra $543.00.  The resort says that they won't work with me since it is already in collections.  What can I do?  Those charges are outrages.
Thank You
Martin

Answer
Normally, unless it is a government debt they may only charge late fees and interest on the delinquent payment. They may not charge collection fees unless it is a legal account and they would have to obtain a judgment and be awarded legal costs, and that only if it is written into a contract.

If you have a contract read it thoroughly and look at the fine print. They cannot arbitrarily charge fees. If they are charging undue collection fees I would be proactive and file a small claims petition against them and let the judge decide. Beat them to the punch and make a lot of noise! You may also file a complaint with the FTC and your state Attorney General. If you push hard they may waive those fees. Be aggressive.

Please keep me posted on your progress and I will post your information on my site for others. This may encourage others to take charge of their situation.

I wish you success.

Mike