Interest, late fees, and other billing charges: Are you in compliance?

Creditors need to take a good look at what their financial responsibility forms require compared to what their software programs charge.  We have encountered a number of problems in the last year or so, and plaintiff attorneys are going to get their fee no matter how insignificant the damage.  Here are some questions to ask yourself on how your systems and processes work:

  • Do you have a signed financial form that charges fees, interest, finance charges for late or non-payment?
  • Does your software automatically add fees or interest?
  • Does your office charge fees to non-signors?
  • Do you rely on signs in your lobby or pre-printed language at the bottom of your invoice or statement to charge fees or interest?

These are some very important questions to consider when reviewing your financial policy.  Failure to comply with Oregon law on these items can result in a lawsuit or fine against your company, as well as a lawsuit against your debt collection company which you may have to pay for!  Here are some important tips to help keep us all in compliance and out of mind for the plaintiff’s lawyers:

  • Do not charge more than 9% simple interest on defaulted accounts unless you have a written agreement for more.  Only the signor will be responsible for the additional interest.
  • It doesn’t matter if you call it interest, late fees, billing fees, collection costs, or anything else; you MUST have a signature to charge more than the statutory amount of 9% simple interest.
  • Is your software putting late fees on your statements when you do not have signed authorization?
  • If you have a signature, is it the same as what is on your statements?  For example, if you have Mr. Jones on the statement but only Mrs. Jones signed for late fees; or the signature allows for 18% interest but your software is compounding and/or applying interest in an amortized fashion?

These are critical issue and all creditors need to make some time to review their processes, forms and software.  One plaintiff lawyer can cost thousands of dollars in fees, even if there are no actual damages.

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