Comments Off on Can a Debt Collection Agency Add Extra Charges to Your Claim?

Charges can be added, but NOT by the Collection Agency. It is a violation of the law for us to add any fees to your bill. We can, however, add fees transferred from your contract with your customers.

Take a look at your current contract. There should be a paragraph in it referring to extra charges for bills that have to be sent out to a debt collection for processing. Some Client simply state that all debt collection or attorney charges will be added to the initial charge.

This usually is enough, but a stronger statement would provide a specific charge. For example, an additional charge of one third of the original bill will be added if the claim is forwarded to a debt collection agency or attorney.

Many debtors will pay the original bill plus the extra charges once we point out the clause in your contract.In these cases the debtor basically pays for the collection.

Adding extra charges does not mean you will automatically get paid for the extra fees. Just like your original, they are subject to the difficulties of dealing with a consumer who may be insolvent, dissatisfied or otherwise incapable of paying the full amount.

In these cases you may choose to take a settlement offer. If no extra fees were spelled out in your contract this offer would be based on your original bill. A settlement of 70 percent would cost you 30 percent of your original charge.

Because you have added fees in your contract the settlement will be based on a higher number and may comprise your entire original bill.In general expect more money to be collected and returned to you if you add fees.

So, we are not allowed to add extra fees but you can. Make sure your contract has a paragraph on non-payment and extra fees for debt collection services.

Your customer is causing this to happen by not paying your bill. They are already morally responsible. Make them legally responsible as well.

You will get a larger return on claims sent to collection.

Understanding debt collection and background screening best practices can save your business big money. Building up front applicant screening into your business processes costs you very little, but saves you so much in the end. If you haven’t already, partner with a full service debt collection and applicant screening company to guide your business to a place of security and prosperity. Contact us to sign up for a free account and get started protecting your business today.


Executive Credit Management is a full-service Debt Collection and Applicant Screening agency with over 20 years experience located in Central New Jersey. We provide excellent service in the following areas: Employment Screening, Business Screening, and Tenant Screening. Executive Credit Management belongs to a number of Skip Tracing databases and offers services to help locate and confirm the current address of missing debtors. Other services provided are: litigation evaluation on all lawsuit decisions, improvement of the quality of the applicant data, Lawsuit Monitoring, Handling of Debtor Disputes. Executive Credit Management features the best Call Monitoring System in the Debt Collection industry.