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California/US Credit Card Correct Procedures


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Hi. I work for a small company that currently is going through growing pains. I am concerned that some of our cc policies may be outdated or otherwise flawed.


1) Is it ok, in the state of CA, to process charges after they are past due? I found out that according to The Rosenthal FACTA (Hope that is the right acronym) that anyone who collects debt is a debt collector. Therefore...should the A/R Dept. at my company be processing charges? I know that my creditors do not bill me without my authorization...My thought is maybe if the contract was altered so as to say that the client authorizes all charges as to "satisfy their obligations" or something along those lines.....any advice greatly appreciated.


2) If it is ok to process charges....I would assume that it is NOT ok to change expiration dates until a card runs. I know instinctually that this is most likely illegal, but I am not sure what laws or cc guidelines back it up.


3) If we are debt collectors...should we be giving people the whole "this is a call to collect a debt- any information obtained will be used for this purpose" etc speel?


I have so many more questions....but these are the main three. Any help is greatly appreciated/needed! Thanks!



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1. Ask a lawyer. No, seriously.


2. IANAL, but that sounds like credit card fraud to me, and if you did that to me without asking me first (in which case I'd be giving you the information anyway) then I'd report the charge as fraud.


3. Why don't you just hire a debt collection company to do this for you? If you're big enough that this is a problem, outsourcing it will save money and hassle in the long run. If you're big enough that you can justify hiring somebody to do this work, do so. Either hire somebody who has the experience and knowledge to do it right or pay to have them educated.




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