Gregg Sheperd, president of the NCCA, sent out an alert to all NCCA members about the new interpretation of convenience fees, and demanded that all convenience fee collection be stopped. All collection fee activity that occurs after this warning could result in more civil charges by consumers.
In 2013, the Federal Trade Commission (FTC) reached a settlement with one collection agency after a debt buyer failed to follow federal debt collection laws about convenience fee charges. The FTC charged the debt buyer after the organization failed to notify consumers that they were not obligated to pay immediately over the phone, thus eliminating the convenience fee. The company agreed to pay $799,958 in restitution.
The FTC claimed that the debt buyer violated the Fair Debt Collection Practices Act (FDCPA) and FTC Act by using deception to get consumers to pay over the phone, and by falsely threatening to file lawsuits against consumers if they didn’t pay immediately. The complaint also stated that the agency told consumers that were also required to pay an additional $18.95 for the service, and did not mention options to avoid the fee.
The issue could have been avoided, if the debt buyer only mentioned an alternative to over the phone or credit card payment.
Currently, the NCCA is actively searching for a way to reverse the new interpretation of the law, or to change the laws in North Carolina in order to resume convenience fee collection.
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