What is considered a reasonable collection fee?

In South Carolina, the law regarding collection defense fees is outlined in the South Carolina Code of Laws, Title 37, Chapter 15. Generally, any fees collected by an individual or company seeking to collect a debt must be reasonable and proportionate to the services provided. The law states that a collection fee must not exceed 15% of the debt amount. For example, if a debt is $500, a collection company cannot collect more than $75 in fees. In addition, the law states that the collection fee must be commensurate with the services provided and should reflect the level of difficulty of obtaining the debt. For example, if a debt is particularly difficult to collect, the collection fee may be higher. If a debt is past due, a collection company may charge an additional late fee, up to 5% of the debt amount, as long as the late fee is stated in the contract prior to any services being rendered. In addition, a collection company may only charge a fee if a debtor agrees to pay in full, or if the company successfully collects a portion of the debt. If the company is unable to collect even a portion of the debt, they cannot charge any fees. Finally, a collection company cannot charge interest or fees that are not agreed upon by the debtor. Furthermore, collection companies may not engage in any deceptive practices or unfair debt collection methods. All collection fees must be lawful and disclosed to the debtor prior to the commencement of services.

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What is considered a reasonable collection fee?

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