11th Circ. Blocks Collection Agencies' Percentage Fees

Law360, New York (January 2, 2014, 7:16 PM EST) -- The Eleventh Circuit found Thursday in a precedential ruling that the Fair Debt Collection Practices Act prohibits collection agencies from charging consumers a percentage of their principal account balance unless the debtor had explicitly assumed responsibility for such fees.

A unanimous panel determined that Franklin Collection Service Inc. violated the FDCPA by forcing plaintiff Melvin Bradley to pay 33 1/3 percent of the principal balance of an unpaid medical bill as a fee once the delinquent account was referred for collection by his health care provider....
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