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#101823 - 07/29/03 09:06 PM collecting delinquent payment through credit card
DebbieC Offline
Member
Joined: Jul 2001
Posts: 66
Owensboro, KY USA
Our loan collectors have been processing ACH transactions by telephone request from delinquent loan customers charging their checking account at other banks. Now we want to process telephone request to collect payment from customer's credit cards. Does anyone else do this? If so, what disclosures are needed and what is the delivery time. Reg E covers telephone authorization, but not credit cards. Was just wondering what others are doing???

Thanks

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#101824 - 07/29/03 09:31 PM Re: collecting delinquent payment through credit card
Anonymous
Unregistered

I'm not sure what law this falls under, or if it's just a safety and soundness issue, but my understanding is that you cannot use a credit card to make loan payments.

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#101825 - 07/29/03 09:43 PM Re: collecting delinquent payment through credit card
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,590
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Certainly you need to worry about a customer who pays a debt with a credit card. But I don't think it is illegal.

Many years ago as a collector, if a customer came in and said this is all they had, do I want my payment(s), you betcha. I am on the receiving end.

Many small businesses have done this to survive. Some didn't survive, some did. Again, is it your desirable borrower, no. But should you refuse a payment because they are strapped, I wouldn't.
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