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Patrick H.
Patrick H., Lawyer
Category: Australia Law
Satisfied Customers: 5422
Experience:  Dip Law LPAB - Sydney based lawyer
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I had a credit card debt sold to Pioneer credit in 2011 for

Customer Question

Hi Pearl I had a credit card debt sold to Pioneer credit in 2011 for $20K I have paid $14125 back plus $6500 in interest. They informed me I still owe more than $12,000. Where do I stand with this? I understand the debt was on sold to Pioneer but how do they legally charge me interest when I had no say in it being on sold. I do not have access to re use the funds from the original credit card that I have paid off, so why am I paying pioneer interest? Just do not understand how this works.
JA: The Lawyer will need to help you with this. Have you consulted a lawyer yet?
Customer: No I have not
JA: Please tell me everything you can about this issue so the Lawyer can help you best. Is there anything else the Lawyer should be aware of?
Customer: I have never signed anything with pioneer credit, nor do I receive any communication from them regarding payments which have been direct debited from my account. I just don't understand how I can pay back a debt to a separate company of $21,000 and still owe $12,000. As far as I am concerned the debt has been finalised. What do you need from me?
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Submitted: 1 year ago.
Category: Australia Law
Expert:  Patrick H. replied 1 year ago.

Hello and thank you for your question.

When your credit provider 'sold' your debt' the purchaser acquires all the rights to interest, etc under the original credit card agreement, this is why they are able to charge interest on your debt. Just make sure there calculations are correct and that they have included ALL the payments you have made to either the original credit card company and the debt collector.

Generally credit card contracts contain clauses allowing the credit provider to terminate the line of credit at any time and then call in the loan, at which time you wil lose the ability to draw on further funds, but are still liable to repay and pay interest your debt to that point.

The interest they appear to have been alleging you have acquired over the period does seem high, so again you need to check your figures, but if your credit card debt was $20,000 in 2011, you may have been incurring something in the order of $4,000 a year in interest on your debt (credit cards often charge something in the order of 20% per year interest), so if it took you the full 5 or so years of regular payments to pay back $20,000, a further $10,000 or so in interest would have accrued on top of the original amount, and it would be more, if most of your repayments occurred later rather than earlier.

I trust the above assists your understanding.