Can collections managers charge fees in addition to the debt owed?

The correct answer focuses on the important principle that while collections managers are allowed to charge fees in addition to the principal debt owed, these fees must be clearly disclosed to the debtor ahead of time and must comply with the specific regulations set forth by the state. This practice safeguards the rights of consumers and ensures transparency in the collections process. In Michigan, as in many other states, there are legal guidelines on how fees can be assessed, including what constitutes reasonable fees and the necessary disclosures required to inform debtors about these charges upfront. This approach protects consumers from unexpected costs and promotes ethical standards in debt collection.

The other choices suggest limitations or absolutions that don't align with the legal regulations governing collections practices. Specifically, stating that fees can’t be charged at all or can be charged without any regulations does not reflect the balance that the law seeks to enforce between the rights of creditors and consumers. Overall, understanding the legal framework around fees is essential for collections managers to operate within compliance and maintain fair practices.