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#2222426 - 09/26/19 08:35 PM Ability to Charge Collection Fee
CSB98 Offline
Diamond Poster
Joined: Dec 2003
Posts: 1,236
Wisconsin
In recent discussions about charged off accounts and sending them to a collection agency, we wondered if we are able to charge a collection fee for the work that will have to be done? Does anyone charge something similar or has heard of a similar fee being charged?

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#2222434 - 09/26/19 10:28 PM Re: Ability to Charge Collection Fee CSB98
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
Is it in your depositor's contract?
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#2222475 - 09/27/19 03:12 PM Re: Ability to Charge Collection Fee CSB98
burkemi Offline
Gold Star
Joined: Nov 2013
Posts: 468
I've never heard of it. But another thing to consider is potential UDAAP.

If it's a deposit account, your customer is already overdrawn and likely stacked with overdraft or return item fees. Adding more fees is likely not going to be looked on favorably.

Part 2, if it's getting charged off you likely aren't getting the money back anyway, at least not all of it. Adding more to the chargeoff is only going to increase risks, not monetary return.

Remember, in the world of UDAAP, even following the rules is not a guarantee against a UDAAP sanction if the action taken can be considered unfair, deceptive, or abusive. So the fact that it might be in your deposit contract may not necessarily be enough.
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#2223991 - 10/18/19 06:01 PM Re: Ability to Charge Collection Fee CSB98
TeamComply Offline
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Joined: Aug 2016
Posts: 393
On a related matter, how soon is a bank allowed to send a closed deposit account to a collection agency to begin collections?

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#2224003 - 10/18/19 07:28 PM Re: Ability to Charge Collection Fee CSB98
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
It is a business decision.
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