Out-of-Service Debt
Collection Fees
Frequently Asked Questions

1. How is my interest rate determined?
2. Why does my billing statement reflect a penalty fee?
3. How are my monthly interest and penalty fees calculated?
4. Why am I being charged interest when the debt is not my fault?

---

1. How is my interest rate determined?

Answer:   The Treasury Current Value of Funds rate is used to calculate interest on overdue Federal Government receivables. The interest rate on your account is the rate in effect at the time the debt becomes overdue. The rate of interest remains fixed for the duration of the indebtedness.
2. Why does my billing statement reflect a penalty fee?

Answer:   Penalty fees of 6% begin to accrue when a payment has not been received within 121 days of the initial notification date. If you have made a payment within 121 days of the initial notification date, and all subsequent payments were timely you need to contact us for further review of the payment history. If the penalty fee is unjustified we will update your account balance accordingly.
3. How are my monthly interest and penalty fees calculated?

Answer:   Interest and penalty fees are calculated using a "daily rate". This is calculated by dividing your rate (interest rate on your billing statement, or a fixed 6% for penalty charges) by 365 days, rounded to six decimal places. The daily rate is then multiplied by principal balance due and the number of days in the billing cycle. Since we do not generate billing statements on weekends or holidays, your billing cycle can vary monthly from 30 to 34 days.
4. Why am I being charged interest when the debt is not my fault?

Answer:   You received an unearned benefit. If you are not able to return the full amount within 30 days of the initial debt notification letter, as with any creditor, appropriate charges will accrue.