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Collection Agencies Delinquent Account Upcharge

Guest KenK

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As a matter of practice, it is common for collection agencies, when contracted by other business to provide either First or Third Party services, to charge more for the collection of accounts that are already delinquent as opposed to pre-delinquent?  Just wondering.  Thanks in advance.  Ken 

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There are several factors that would need to be noted.  Some contracts state that collection fees will be added to delinquent accounts, or that the cost of collection can be added to the account.  Late fees can continue to accrue each month of delinquency.  Sometimes there is an acceleration clause that states when an account is delinquent, the entire amount is immediately due rather than just the late plus regular monthly amount.  And then there are some contract that state the interest rate will go way up to the max if the account goes delinquent which can add extra charges.


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