TITLE 26

BANKS AND BANKING

CHAPTER 22

COLLECTION AGENCIES

26-2229.  Contracts. (1) Contracts between collection agency licensees or collection agencies required to be licensed under this act and creditor clients shall be in writing.

(2)  It shall be a violation of this act for any collection agency contract to:

(a)  Authorize a collection agency to retain any sums collected on behalf of a creditor client, other than the regular collection fees or commissions authorized by this act;

(b)  Penalize a creditor client for any unintentional error, mistake or omission in furnishing the correct name or address of any debtor to a collection agency; or

(c)  Require the payment of any fee, commission or compensation in excess of fifty percent (50%) of the amount actually collected on any account, bill, claim or other indebtedness entrusted to the collection agency for collection. However, in the case that a collection agency collects interest on an account, the creditor client and the collection agency may agree in writing for division of such interest between them without such percentage limitation. Furthermore, in the case of the collection of checks dishonored by nonacceptance or nonpayment, the creditor client and the collection agency, by written agreement between them, may provide, in place of a percentage fee, for the payment of a set dollar amount collection fee not to exceed the amount provided in section 28-22-105, Idaho Code, which shall not be subject to the fifty percent (50%) limitation. Collection agreements to proceed under section 1-2301A, Idaho Code, shall be subject to the fifty percent (50%) limitation.

(3)  (a) No debt counselor, credit counselor or credit repair organization licensed or required to be licensed under this act shall take or receive for services performed for any one (1) person more than fifteen percent (15%) of the amount received by it at any one (1) time from or on behalf of that person for payment or prorating to creditors, and no other charges shall be made or received for any such service.

(b)  Debt counselors or credit counselors who do not receive, hold or disburse funds from debtors for payment to creditors shall not charge or accept as a fee for their services more than twenty percent (20%) of the principal amount of the debtor’s unsecured debt at the time of contracting for services for the management of debt. In the event of cancellation of the contract by the debtor prior to its successful completion, the debt counselor or credit counselor shall refund fifty percent (50%) of any collected fees associated with the amount of debt remaining unsettled at the time of the termination of the contract.

History:

[26-2229, added 1970, ch. 53, sec. 8, p. 118; am. 1973, ch. 263, sec. 1, p. 538; am. 1974, ch. 24, sec. 24, p. 744; am. 1982, ch. 107, sec. 1, p. 306; am. 1984, ch. 47, sec. 8, p. 81; am. 1995, ch. 211, sec. 5, p. 718; am. 1996, ch. 373, sec. 4, p. 1270; am. 1997, ch. 370, sec. 3, p. 1178; am. 2008, ch. 347, sec. 9, p. 945.]