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I paid the debt off with the creditor (or bill collector) but now the collection agency is saying I still owe them more money!

Have you paid or otherwise satisfied a debt “in full,” or so you thought, only to be told you owe more? Before you consider paying the debt collector the difference you should ask an attorney whether the request for more money (or in some cases, failing to tell you that you might owe more due to “accruing interest and other charges”) violates your FDCPA or other consumer rights. Specifically, third party debt collectors are only allowed to add collection fees allowed by the original credit contract, state law, or in some cases federal law, and any attempt to collect a fee not otherwise allowed, and even failing to disclose a fee that is allowed, may turn the tables on the collector and make them answer to you. For more on this see collection fees and interest on debt.

Paid Creditor or Collector in Full:
Here are a few situations that might occur:

1. The debt was not delinquent and you paid the debt off but the creditor mistakenly sent it to collections.

ANSWER: Call your creditor immediately and ask for a manager, then explain that you paid this debt in full and can prove it. Insist that the creditor send a “paid in full” statement to you right away. Then demand the account be pulled back from collections and your name removed from any black list. Next, ask if it’s been reported to any credit bureau and if so, insist any negative information be removed and the account reported accurately (paid in full – not delinquent)

Finally, send a follow up payment agreement letter to the creditor outlining what happened, what they agreed to do about it, who you spoke with and the time and date. Follow our mailing instructions and send this letter return receipt requested. DO NOT forget this part. Having agreements in writing is your only protection.

2. You paid the debt in full to the creditor between the time the creditor sent the account to a 3rd party collector and the collector called you.

ANSWER: Assuming the debt was delinquent. (If not, see number one above). You could still be liable for reasonable collection fees. Call your creditor immediately and ask for the exact date the account was sent to collections. Then, using that date, make sure they did not violate any rules outlined in the credit disclosure statement such as notifying you before going to collections, grace periods and anything else that might have prevented the account from going to collections. If they did violate one or more rules, use it as leverage to have the fees removed.

If they did not violate any rules and the account was delinquent, then they are within their rights to send the account to collections and you may have no choice but to pay the fees. Be sure the fees are legal. Try to negotiate out of paying the collection fees by reminding your creditor of your good payment record, number of years as a customer, and so forth. If they refuse, try to negotiate the amount of the fees. If they agree, send a follow up letter to the creditor outlining what they agreed to, who you spoke with and the time and date. Send this letter return receipt requested.

3. You paid the debt in full to the creditor after a 3rd party debt collector called you.

ANSWER: If the debt was NOT sold, see my answer to number 2 above because most of that still applies. However, if the debt was sold and the creditor accepted your payment in full, there is a deeper legal issue here because the creditor no longer owned the rights to the account and should not have accepted your payment. Immediately dispute the debt with the collector using this paid-in-full sample letter. The issue is should be between the collector and the creditor because the creditor was already paid for the account and now they accepted your payment as well. It should be up to the creditor to settle with the collector. Do everything in writing and keep accurate records. Keep in mind that the collector legally purchased the debt and the rights to collect it so you could end up paying the debt twice and then suing the creditor to get your money back.

4. You paid the debt in full to the collector.

ANSWER: When collectors say you still owe them money after you’ve paid them in full, it’s almost always because the agreement was not in writing. A typical scenario is you offer over the phone to pay a certain amount but only if the collector will accept it as payment in full. The collector readily agrees and you send the payment right out. A few days later the collector calls back and says you still owe the rest of the account. They use a myriad of excuses why the account is not paid, but the real deal is they believe that because you paid the first amount, you can afford to pay more. Without the agreement in writing BEFORE paying the debt, you have no real proof of the agreement and the collector knows that.

You have two choices; pay the additional amount or refuse to pay it. If you choose to pay make sure that you are only paying the amount that collectors can legally charge.

If you choose not to pay, send a letter that clearly states the verbal agreement details, especially the time, date and amount of payments. In the letter state that you consider the account as paid in full. The collector could still try taking you to court, and depending on the amount of the debt, might just do that. Don’t panic! Go to court prepared with all of your documentation. Check your state laws to see what they say about verbal agreements as well. Some states accept verbal agreements the same as a written contract. The key is to show your good faith in resolving the issue especially with a record of payments.

Whichever choice you make….do it in writing!

* The answers on this page assume the collector is a 3rd party collector and not an internal employee of the creditor collecting the debt.

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  1. My insurance company said I owed the dentist $88 as my portion of the bill. I called to get there address. I mailed them a check. They in turn made a check out in my name and sent it to a collection agency as a payment. How can they get away with doing this?

    • Did you receive a collection letter? You may have experienced some sort of Fair Debt violation(s), the Debt Help Lawyers at this site can provide you a free, no obligation Fair Debt consultation. The worst thing to do is nothing, so call us now at 888-595-9111 and we will get started figuring our how to help you!

  2. I paid a debt collector after settling with them, they never sent me a paid in full letter I had set up 4 payments with them after thinking everything was taken care of 7 months later now I am getting calls from another collector saying I still owe money. The first debt collector will not answer any phone calls or emals from me. I verified that I made those 4 payments but they said it doesnt matter without a pain in full letter. What can I do about this.

    • Pretty common. Call us, we’ll gather some facts and we’ll get it taken care of.

      • I know I have paid of a few collections, but I have not received any paid in full letters. I’m working on my credit and to get these jerks removed I need those letters. I several times within the last 2 months to request, but no letters. Who can help with that?

  3. I had a debt collector after me for a credit union they garnished me over 800 I only owed may 600 to bank I know there are fees. They stopped garnishing saying paid. This was 4 or 5 years ago. Well I walked into the credit union to get a letter to say I paid it n in good status. They lady says yes the debt collection says you paid it off but you still owe us 331 and some cents. How do I owe if they said I paid all in full. So confused even the lady was confused. Any advise.

  4. I am trying to help a friend or who is overwhelmed by her situation. She and her boyfriend of 5 years are splitting up so she tried to get an apartment. She found out there was an eviction on her background check staying she owed $6000. When she spoke to her boyfriend about it she found out it was from a place they stayed at and the landlord had sued them for damages to the yard etc. They went to court and settled in court for the $3000 that he said they owed. They paid in full and she had court documents stating this. Some where along the line none of this showed up on her boy friends credit and it showed up double the amount on her credit so the court documents aren’t helping her since the two balances don’t match (but it is exactly double). The apartment complex contacted the landlord to try and get a statement from him staying that he had been paid in full and that it was the $3000 not $6000. Now it looks like the landlord is going to try to lie about it to paint her into a corner so he can make more money off of her. What are her rights and what action can she take in this situation? Without his release she can’t get into any apartment complex. This is in Colorado. Thanks for your help.

  5. I recieved a letter from the creditor with an offer to settle the account. I called them and said that I want it in writing and also sent a copy of their letter along with the payment and they are still continuing to call me multiple times a day. What can I do about this harassment after the account being settled?

  6. Am I able to charge the collection department a fee for sending proof that I paid my bill?

  7. A credit bureau sent papers to take me to court if I didn’t pay in full what I owe so I agreed to pay them in 2 separate payments. 8 months later they called me saying I owe more money, I told them I already paid everything and they want me to send proof. All I have is a confirmation number and bank statements. They called again and said they can’t find any proof I paid In their systems. The debt is off my credit report, what should I do.

  8. i had a collector call me stating i owe $200.00 for a dental bill. they also said i owed a $60 collection charge. I said I will have to look into this. I went home and have the $200 bill from the dentist and paid it. nothing from a collection agency. Now 2 weeks later i get a bill from a collection agency showing the payment to the dentist and a $60 fee i owe them? this is not a credit card.

  9. I paid off my fitness membership bill and closed my contract in November. I received in writing a statement which states I do not owe any money. I have a zero balance. It also shows the contract is closed. However, for the last six months I have received intermittent calls requesting I pay the already settled bill. Each time, I provide a copy of the zero balanced closed bill, and I respond in wiring, etc. I have shown up at the fitness center three times. I have called their corporate center (no response). I have provided copies of the cancellation and zero balance receipt. I have provided a copy of the termination of the contract. They still call. I am exhausted and at this point I just do not know what to do. How do you get them off your back if you’ve paid up and you have proof? It’s like they refuse to take no for an answer, and at this point even if I paid the amount they say I owe ($20?!!) I can’t trust that they will leave me alone. I have already paid and I have the receipt and they are bothering me.

    • Lots to unpack in there, and the ramifications of their misunderstanding could appear in the future, e.g., on your credit report. But what you mentioned could be first party FDCPA, TCPA, and/or even EFTA depending on some additional facts. We sent you an email, did you call or respond? Please do.

  10. A rental car company charged my credit card a balance for the rental and tolls totaling 573. 3 months later a collection agency calls me asking for a payment of over 2000. I never received a letter for this amount from the rental company or a notice of a bill being sent to collections. The rental company only has a receipt for the 530 charged to my credit card, which assumed to be emailed to me. They claim they cannot provide me a detailed summary of the charges on my rental account because the account was sent to collections. The collections agency says they cannot give me a detailed summary of charges because they must get the information from the rental company.
    Can I fight this? Is it legit?

    • Let’s fight it, yes. We dispute the charges first and ask questions later. We’d like some additional info too, please call, sounds like a strong FDCPA and Rosenthal case.

  11. Back in July of 2016 I agreed to pay a portion of a debt that I had and we settled on an amount. They sent me a letter outlining the payment process. This was to be two payments and the debt was to be settled for a portion of what was owed. I then called to ask if I could just pay the amount agreed upon up front rather than in payments. They took the payment out of my account as agreed upon on on 08/02/2016. I never received a letter of final payment or that the account was settled. They then called a few months later saying I still owed the rest of the payment and have been sending me things ever since. I checked my credit and the account is no longer on my credit report. A few months ago after they said I still owed them money they credited my account the payment I placed and then dropped it off my credit after they still said I owed them money. When I told them about the deal that was made they said they had no record of it in their system. Unfortunately the letter of intent they sent me I know longer have.

  12. In Jan 2016, I was garnished $2600 for an old HOA debt by a local law firm. I paid the debt online and got the case dismissed in about a week and everything was supposedly cleared. Now, the same firm has filed yet another suit against me for the same purpose in a different county. The first case was in the county of the law firm. The new case is in the county of the property. I have told them numerous times that I’ve paid the debt, but they kept calling and now I’ve been served to appear in court. I even left a message for them stating the original case number and the dismissal. Of course, I am not getting a reply since they have filed. Fortunately, I finally found my proof that I paid the debt last year through their online system. Do I have a case against the collection agency for all the calls, my time going to the courthouse and research, but ore importantly, the embarrassment of being served while entertaining guests at my home? Thanks in advance.

    • Do you have proof you paid it? If so sounds like a strong FDCPA case that we could potentially help you with at no cost. Can you call us to provide some additional information? 888 595 9111.

  13. I was in a car accident and went to court and thought everything was settled. Soon after a sect collection agency calls and says I owe 1,000 but was never contacted by original creditor. Then the debt went up to over 2,000 because the other person was supposedly injured (it was a fender bender and hit and run) unknowingly I made a payment plan and now upon further research feel I made a mistake and don’t think the debt belongs to me. I’m not sure what to do. I can’t pay the debt and I’m struggling as is.

  14. Midland Collection Agency in San Diego is notorious for this. I naively settled a debt verbally, paid over the phone and still years later they send me mail offering deals to pay balance off. Luckily none of this is on either credit report so I know these PIMPS are scamming folks. There’s a special place in Hell for turds like them.

  15. I fell behind in my HOA payments. I worked out a payment agreement of $561 a month until I get caught up. The HOA has now changed the law firm that is handling the payments and they are now refusing to accept my payment and telling me that I have to pay $1500 up front then $610 each month until I am caught up. Can they legally do this?

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