12-1-11. Collection fee -- Convenience fees.

539 words·~2 min read·/ut/title-12/chapter-1/12-1-11

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Effective 5/12/2020

(1)As used in this section:

(a)"Creditor" is as defined in 15 U.S.C. Sec. 1692a.

(b)"Debt" means an obligation or alleged obligation to pay money arising out of a transaction for money, property, insurance, or services.

(c)"Debtor" means a person obligated or allegedly obligated to pay a debt.

(d)"Financial transaction card" means the same as that term is defined in Section 13-38a-102 .

(e)"Third party debt collection agency" means:

(i)a debt collector as defined in 15 U.S.C. Sec. 1692a; or

(ii)a person who would be a debt collector under 15 U.S.C. Sec. 1692a, except that the person does not use an instrumentality of interstate commerce or the mail.

(a)A creditor may require a debtor to pay a collection fee in addition to any other amount owed to the creditor for a debt if:

(i)imposing a collection fee on the debtor or in relation to the debt is not prohibited or otherwise restricted by another federal or state law;

(ii)the creditor contracts with a third party debt collection agency or licensed attorney to collect the debt;

(iii)the third party debt collection agency with which the creditor contracts is registered under this title;

(iv)there is a written agreement between the creditor and the debtor that:

(A)creates the debt; and

(B)provides for the imposition of the collection fee in accordance with this section; and

(v)the obligation to pay the collection fee is imposed at the time of assignment of the debt to a third party debt collection agency or licensed attorney in accordance with an agreement described in Subsection (2)(a)(iv) .

(b)The creditor shall establish the amount of the collection fee imposed under this Subsection

(2), except that the amount may not exceed the lesser of:

(i)the actual amount a creditor is required to pay a third party debt collection agency or licensed attorney, regardless of whether that amount is a specific dollar amount or a percentage of the principal amount owed to the creditor for a debt; or

(ii)40% of the principal amount owed to the creditor for a debt.

(c)An obligation to pay a collection fee imposed under this Subsection

(2)is in addition to any obligation to pay attorney fees that may otherwise exist.

(a)Subject to Subsection (3)(b) , a third party debt collection agency that accepts a financial transaction card for the transaction of business may charge a convenience fee for a transaction processed over:

(i)the phone;

(ii)text or similar short message service; or

(iii)the Internet.

(b)Before a third party debt collection agency charges a convenience fee as described in Subsection (3)(a) , the third party debt collection agency shall:

(i)clearly disclose to the debtor that the third party debt collection agency will charge the debtor a convenience fee, in a time and manner that allows the debtor to accept or reject the convenience fee;

(ii)disclose to the debtor the amount of the convenience fee; and

(iii)give the debtor an alternative payment method option for which a convenience fee does not apply.

Amended by Chapter 121 , 2020 General Session