The recent 11th Circuit case of Owen v. I.C. System, Inc. ought to frighten the heck out of retail collection agencies and retail collection law firms. It seems to imply a duty upon the agency or firm to confirm that the original creditor has charged interest in accordance with the credit terms of any signed agreement with the debtor.
In this case, in addition to the creditor miscalculating interest accrual, the agency was adding a 7% “interest fee” to every account placed. This may end up making the case distinguishable from a subsequent case where the agency merely pursues an overlarge amount that was created by the creditor’s interest miscalculation.
The court in this case not only reversed the granting of summary judgment for the agency, it remanded and ordered summary judgment entered for the debtor. A truly harsh result.