The North Carolina Dept. of Insurance (N.C. Dept. of Insurance oversees collection agencies) settles with agency for charging transaction fees:

The North Carolina Dept. of Insurance (N.C. Dept. of Insurance oversees collection agencies) settles with agency for charging transaction fees:

In April 2014, the Commissioner of the North Carolina Department of Insurance (“NCDOI”) brought an action against a debt collector after receiving a complaint from a consumer about a $10.00 transaction fee.  NCDOI discovered that the company collected $20,912.50 in such fees from North Carolina consumers, between June 1, 2010 and June 5, 2013, where the individual fees ranged from $5.00 to $10.00.

Rather than face an administrative hearing to determine whether charging the fees was in violation of state law, the collector voluntarily agreed to stop collecting transaction fees from North Carolina consumers and agreed to pay a civil penalty of $21,412.50 for the fees collected.

The collector also agreed to fully reimburse any North Carolina consumer who paid the company a processing fee between June 1, 2010, and June 5, 2013 upon receipt of written request from the consumer within one year of the settlement.

The NCDOI’s position on the application of N.C. Gen. Stat. Section 58-70-115(2) should cause collection agencies doing business in North Carolina to carefully analyze the assessment of any “collection fee” including fees assessed for processing certain types of payments.

If you would like more information on this settlement or its impact on your business, please contact the firm.

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