# Regulatory Compliance Category > National Credit Act Forum >  Do you have to deal with a collections company or can you deal with the party you owe

## Mr Capo

I have seen that the fees charged by the collections companies are harsh and expensive, do we have deal them if an account has been handed over or can we go back and pay into the original account reducing the balance. If we pay the collections company they take a cut of the payment and add more charges.....

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## AndyD

Can you clarify what you mean by collection agency? Are you talking about lawyers or an agency that has bought the bad debt from the original creditor? What stage are you wondering about as well, before or after legal action has started and before or after a court judgement has been issued?

I'm not sure about the answers to all the scenarios but it might help clarify for others more qualified to answer if you canm be more specific about the case in question.

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## mbsmit

Hi there,

Nope, not possible. The debt was handed over to the to collect, and either way you will need to pay their fees. I trust the collection company has entered into an agreement with the original creditor.

Regards,
Mr Smit

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## Dave A

> I trust the collection company has entered into an agreement with the original creditor.


Yes - that's normally the problem. Technically you're not paying the collection agency - they are effectively billing your creditor and collecting the money from you on your creditor's behalf.

And yes, your creditor is entitled to recover collection costs from you, although there are limits to just how much those charges can be recovered from you. For example collection costs and interest can't exceed the principal debt.

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## Mr Capo

So what would happen if I pay the outstanding balance to the creditor directly and settle the balance in full? Where would this leave the collections company?? Would I have any obligations to them?

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## BuyNoEvil

I tend to agree with Capo. Pay the original creditor what you owe - sit back and see nothing else happen.

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## flaker

> Yes - that's normally the problem. 
> 
> And yes, your creditor is entitled to recover collection costs from you, although there are limits to just how much those charges can be recovered from you. For [B][B][B]example *collection costs and interest can't exceed the principal debt.*


*.
*
is this true??? i settled a "debt" last month of approximately R700 with a payment of approx R4000 directly to attorneys claiming to act on behalf of Ethekwini Municipality.This debt dated from  around June,2008 which i was never aware of & which was sold by the municipality in December,2010 to some party that these attorneys would not name in writing.(skelm attorneys with very questionable scare tactics).

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## Dave A

It all sounds rather suspect.

No, not the lawyers trying it on to get more than _in duplum_ paid out - that's no surprise at all. It's this bit:




> This debt dated from  around June,2008 which i was never aware of & which was sold by the municipality in December,2010 to some party that these attorneys would not name in writing.


I'm not sure the municipality has the authority to sell its debt  :Huh: 




> (skelm attorneys with very questionable scare tactics).


You said it.

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## Rebel

If the debt was sold and you were never advised of the cession and who the new owner is - you can send payment to the original credit provider.

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