ACA’s North Carolina Unit Advises Members to Stop Collecting Convenience Fees

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Several officers of the North Carolina Collectors Association recently met with North Carolina Department of Insurance Commissioner Wayne Goodwin and representatives for Attorney General Roy Cooper to clarify the legality of collecting convenience fees from consumers who choose to pay by credit card or check by phone.

This meeting was requested after a receivables management company agreed on April 11, 2014, to pay a $21,000 civil penalty for collecting convenience fees.

The commissioner informed NCCA that the Department of Insurance considers convenience fees as prohibited under North Carolina law.

This reverses a previous understanding NCCA had with the department that these fees were permitted as long as the consumer was given a method to avoid paying the fee, the fee was reasonable and the fees were not a profit for the agency.

Greg Sheperd, president of NCCA, sent an alert to all NCCA members notifying them that convenience fees are no longer allowed in the state and urged any agency charging them to stop immediately.

The NCCA is actively developing a strategy to reverse this new interpretation or change the law but any change is expected to take at least several months.

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Posted in Collection Laws and Regulations, Collection Technology, Debt Collection, Payment Systems .

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  • avatar TOM EDWARDS says:

    Fee Type Amount
    Credit or non-Visa debit card payment fee 2.65% of the amount paid with a $3.95 minimum
    Visa debit card payment flat fee of $3.95
    E-check: Payments less than $10,000 No fee
    This is Bumbe county in North Carolina to pay your property tax. How is it constitutional to only cite collection agencies or is it all convenience fees for the whole State

  • avatar christina-stranges says:

    Is the penalty for charging a convenience fee on credit card payments pertain only to collection agencies or to first party lenders as well?

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