Michelle,
My company is sending a few of our non-responsive customers to our external collection agency. The owner of my company wants me to calculate and add on interest charges to these accounts before we send them off.
My question is, since the customers did not sign anything informing them that this would be done, can we legally do this?
- Elaine
Dear Elaine,
In order to charge interest, any late fees or add any collection costs to a debt, you have to notify the customer before the debt is incurred. Most companies include this wording on their credit applications, which the customer signs before the sale, in a contract or agreement that the customer signs before the sales and additionally it is printed on all invoices and statements that are sent to the customer. Laws vary by state on the amounts that can be charged or if they can be charged at all.
Michelle Dunn, author of the Ultimate Credit and Collections Handbook, the check IS in the mail!
Tags: collection agency, late fees