The Permissibility of Fees in ARM: Important Information for Industry Stakeholders

Base Insights

In an industry webinar on The Permissibility of Fees in ARM, participants received valuable information on this important topic. The event was widely attended, with everyone from agencies to other payment providers interested in learning more about the potentially confusing area of convenience fees in ARM.

With input from legal and compliance experts, the session was a comprehensive discussion of the permissibility of fees in the industry, including key steps to include in developing or modifying a payment processing strategy. Below are some of the major points from the discussion.

1. Develop Your Strategy

The first step in determining whether a No-Cost-to-Biller™ model is a viable solution that will support your profitability is partnering with clients in all aspects of your strategy, including payment processing. The key is to educate clients when you are able to influence their agreements with consumers, and collaborate with their compliance experts regarding risk tolerance as it relates to the use of fees.  

Also, you’ll want to assess when and where various payment options are appropriate for your specific business types. Implementing a fee model in just a small portion of your collections can have a positive effect on profitability. 

2. Adhere to the Rules

Fees are not outside the jurisdiction of FDCPA, CFPB, and state laws, but much of the language used is based on collection agencies charging fees internally. If the agency isn’t collecting fees, the scenario is regulated quite differently, if at all. And while some states have clear regulations, you can still successfully navigate risk for a comprehensive payment strategy. 

You’ll also want to make sure that proper disclosures are in place and that alternative payment options are clear to the consumer. Both your vendor and legal counsel can help you address these areas. 

3. Understand Your Strengths

What’s your core competency? Many agencies believe their client relationships, technology, or specific service areas are the key to their success. Typically, payment processing isn’t high on their list. Consequently, having effective legal counsel and a payment processing partner well-versed in deploying a No-Cost-to-Biller™ model is critical. You must collaborate with partners who are experts in this area and who are continually monitoring developments and enhancing their solutions based on client requirements, industry opportunities, and regulatory changes.  

The most important fact to be aware of is that game-changing payment processing solutions are now available and adoption is steadily increasing. Now is the time to modify your payment processing strategy to capitalize on these solutions.

For more information on how to implement a No-Cost-to-Biller™ model, and integrating your payment processing into a powerful platform that can consolidate both bankcard and ACH payments in one system, reach out to our Business Development Executives today.

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