We have a client who uses a provision in the U.S. Code of Federal Regulations (“CFR”) to collect significantly more than the original balance due on accounts sent to collections. As an example, we collected over $22,000 on freight bills that were only $11,000 if they had been paid on time.
Section 49 377.203 g(1)(ii) of the CFR says “Carriers may, by tariff rule, assess reasonable and certain liquidated damages for all costs incurred in the collection of overdue freight charges. Carriers may use one of two methods in their tariffs: ….The second method is to require payment of the full, nondiscounted rate instead of the discounted rate otherwise applicable.”
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