What is considered a reasonable collection fee?

In South Dakota, the amount of collection fees that can be reasonably charged is determined by the Commercial Collection Agency Law of South Dakota. Under this law, it is illegal for any collection agency to charge any collection fees that exceed 33⅓% or the "maximum rate" of the amount that is collected or recovered. This 33⅓% rate also applies to any attorney, creditor, or collection agency that is involved in the collection of debt. In addition to the limit on collection fees, the law also states that all collection fees must be clearly and conspicuously disclosed to the debtor in writing before any services are provided. This means that any collection agency, attorney, or creditor must disclose the total amount of the collection fees before any services are rendered. Finally, the law also requires that all collection fees must be reasonable. This means that the fees should be in line with industry standards and market rates. For instance, if a collection agency is charging a fee of 30% for similar services in the area, then any collection agency in South Dakota charging more than 33⅓% for the same services would not be considered reasonable and could be subject to legal action.

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What is considered a reasonable collection fee?

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