Legal Question in Credit and Debt Law in Tennessee

Deferred Interest Rate

I purchased some furniture on a two year deferred payment plan. I was told by the salesperson that I would need to enroll in a credit life insurance protection plan, offered by another company, because of the deferred payment plan. He said there would be no additional cost to me and the agreement did not indicate a cost involved. I was led to believe it was just a ''formality'' as part of the payment plan. When I paid for the furniture I indicated full and final payment on the check itself. They asked for an additional $847.00 for the credit protection. I refused to pay it and had them cancel the policy. The next month I received a bill with nearly $1500.00 added as a deferred finance charge. Eventually a collection agency called on behalf of the insurance carrier and said they would settle the issue if I agreed to pay the original $847.00, which I did. They are still billing me for the entire amount, which is now in excess of $3000.00! Can they legally tack on this deferred finance charge when the furniture was paid in full and policy cancelled?


Asked on 8/24/04, 4:35 pm

1 Answer from Attorneys
Dr. Michael A. S. Guth Tennessee Attorney at Law Assists Pro Se (without a lawyer) Parties

Re: Deferred Interest Rate

The collection agency appears to be making a series of mistakes; however, its actions would seem to violate the federal Fair Debt Collections Practices Act. In particular, there seems to be fraudulent misrepresentation on which you relied in settling this debt. Your problem could probably be solved with a letter from an attorney directed to the collections agency. I would be happy to write such a letter on your behalf for $50. They cannot legally tack on this deferred finance charge when the furniture was paid in full and the policy was cancelled. Maybe if you just print out this response to your question and send it to the collections agency, it will correct this error.

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Answered on 8/25/04, 6:24 am


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