March 5, 2014 Newsletter
Wisconsin Judgments Looking at 12% Yearly Interest, Again
Through an enormous effort by the Wisconsin Collectors Association, A.B. 523 is quickly moving one step closer to law.
The bill would help restore the interest rate on judgments issued in small claims court to 12%. In 2011, the 12% interest rate was changed to 1% plus the prime rate set by the Federal Reserve Board. Since then, the lower interest rate has been affecting collections on small claims judgments.
On February 13, the state assembly passed the bill and the legislation is now with the Wisconsin Senate for consideration.
Court Rules On Wording in Collection Fee Agreements
Many of our clients utilize the collection fee program on accounts sent to our office based upon the Wisconsin Statute 138.05 to maximize their bottom line. Now, the courts are cracking down on the verbiage used in the patient agreement forms.
In the case, Bradley v. Franklin Collection Service Inc., it was ruled that a collection agency may not collect a fee based on a percentage of the account balance if the agreement between the consumer and creditor did not specify the consumer would be responsible for a percentage-based fee.
In this case, the plaintiff signed a patient agreement that stated he would, “agree to pay all costs of collection, including any reasonable attorney’s fee…” The creditor then added a 33 1/3% fee, which reflected the contractually agreed upon fee between the creditor and the collection agency.
It was concluded that the percentage-based fee that was added by the creditor was not related to the agency’s actual cost of collection. Therefore, no collection fee could be added to the account and, in turn, the collection agency violated the Fair Debt Collection Practices Act (FDCPA) by collecting the 33 1/3% fee when the consumer only agreed to pay the actual costs of collection.
For sample verbiage to use in your patient agreements, please click here.
New Hire
As some of you may already know, Finance System of Green Bay, Inc. has added to its sales team. Ryne Kajewski started with us in November and has been busy transitioning into his new role here. We are excited to have him on our team establishing and expanding his territory.
Upcoming Appearances
Wisconsin Rapids Area Rental Property Owners Association
March 10 at the Hotel Meade & Conference Center, Wisconsin Rapids
The Wisconsin Credit Union League Convention
May 7-9 at the Wisconsin Center, Milwaukee
AAHAM Revenue Cycle Conference
May 7-9 at the Best Western Premier Waterfront Hotel & Convention Center, Oshkosh
