This contract is effective beginning January 1, 2013 by and between Effective Debt Recovery (hereinafter referred to as EDR) and any individual or company (hereinafter referred to as CLIENT) that is requesting EDR to perform collection services as specified in this agreement. CLIENT has submitted or intends to submit to EDR one or more delinquent accounts for collections activity (hereinafter referred to as DEBTOR(s)). The CLIENT agrees that the submission of any account to EDR expresses that the CLIENT fully understands and agrees to the provisions herein. Handwritten alterations to this agreement shall not be honored. Solely this contract and the provisions herein define the relationship between the aforementioned CLIENT and EDR:
1. Upon placement of a claim(s), where a DEBTOR owes monies to CLIENT, EDR will use its best efforts to expeditiously collect the claim on behalf of CLIENT. EDR agrees to charge a commission only on funds actually paid by DEBTOR and not the actual amount owed, subject to the provisions of paragraphs 4, 5, 6, 7 and 8 below.
2. CLIENT warrants the validity of all information provided, including but not limited to the amount and authenticity of all claims and accounts placed with EDR for collection, debtor’s address, contact information, social security number and date of birth . Upon request by EDR, CLIENT agrees to expeditiously forward documentation to EDR to prove the amount and authenticity of the claim of debt to be provided to the debtor in accordance with local laws and statutes.
3. CLIENT warrants that any other collection agency or attorney is not currently or actively collecting any claim(s) placed with EDR for collection. This is in accordance with CFDCPA Rule 2.10 that “No collection agency may knowingly collect a debt that is being collected by another collection agency or attorney”.
4. EDR’S fee is to be on a contingency-fee basis and will be calculated at 30% (20% for ELS Members) of recovered funds on the CLIENT account. Sums collected over and above the amounts placed with EDR as interest, treble damages or applicable fees are to be retained by EDR in addition to the contingency-fee, when appropriate and allowable by local laws.
5. CLIENT may at any time request that EDR cease collection efforts, in accordance with the provisions of paragraph 4a and 4b. CLIENT may withdraw a claim placed with EDR only in accordance with the following provisions : A) the account was not placed in the previous 90 days; B) the claim is not in litigation or involved in an insolvency proceeding; C) payments are not being made by the DEBTOR; D) payments have been promised by the DEBTOR e) the claim has not been forwarded to any other collection agency or attorney. All withdrawals must be done in writing via e-mail, postal mail or fax to EDR by CLIENT and any commissions or fees then due and payable to EDR must be paid before the claim is deemed fully withdrawn. CLIENT understands that if the account is withdrawn for no cause or bad cause and CLIENT later receives any payment from the DEBTOR, even when using another collection agency or an attorney, EDR is still entitled to 15% of the collected sums. Any claim withdrawn by CLIENT while payments are being made by DEBTOR will be billed by EDR for the full anticipated commission due EDR on the entire amount of the original claim assigned to EDR.
6. CLIENT shall report all direct payments made by DEBTOR to CLIENT to EDR within three (3) business days of receipt of payment via phone, e-mail, or fax. The contingency-fee due EDR on the direct-to-CLIENT payment shall be remitted to EDR within 30 days of receipt of said payment.
7. Any merchandise returned to CLIENT by DEBTOR after initial contract by EDR shall entitle EDR to a commission equal to 30% (20% for ELS Members) of the original amount placed for collection with EDR by the CLIENT. Any trades negotiated between the CLIENT and DEBTOR also entitle EDR to a commission equal to 30% (20% for ELS Members) of the original amount placed for collection by the CLIENT.
8. Any claim placed with EDR by CLIENT that is discovered to have been previously paid by DEBTOR, or placed by CLIENT in error will be billed by EDR to CLIENT at a rate of 30% (20% for ELS Members) of the claim as a nonrefundable administrative, clerical and initiation fee.
9. CLIENT grants to EDR, its affiliates and any attorney handling CLIENT’S claim the express authority to endorse and negotiate any check, draft or other negotiable instrument made payable to EDR for distribution to CLIENT after deducting any commission and fees due EDR under this agreement. EDR shall remit payments due to CLIENT within 30 days after the last day of the month in which any collections are made for CLIENT, less the aforementioned commission and fees due EDR subject to the provisions of paragraphs 4 and 5 above.
10. If the debt being collected is less than $10,000.00 EDR can, upon request, assist CLIENT in completing a claim for filing in Small Claims Court (SCC) as a clerical service. If proceeding to SCC, CLIENT agrees to pay on advance applicable SCC filing and service fees which will be disclosed prior to poceeding. If awarded a judgment or are submitting an account that is a judgment you have already obtained, EDR will charge 35% (25% for ELS Members) of the amount recovered due to the complex nature of these types of cases. Any debt exceeding $10,000.00 may require filing in a higher court. If requested, EDR can forward the claim to a collections attorney in good standing, to assist with filing in a higher court. CLIENT acknowledges that the attorney typically requires filing and service fees of $350-$650 prior to filing in a higher court. In addition to filing and service fees, the attorney will retain a contingency fee of 35% (20% for ELS Members) of the amount recovered. It is understood and agreed that neither EDR nor the aforementioned attorneys can guarantee any specific result on accounts placed by CLIENT.
11. CLIENT acknowledges that debts incurred in “closed” states (states that require collection agencies to maintain resident offices within their borders while collecting debts from DEBTORS located within those states) must be forwarded to a nationally licensed collection agency. EDR has a preexisting relationship with a nationally licensed agency and will forward any and all collection accounts upon CLIENT’S request, or the account must be closed. It is understood by CLIENT that the commission rate for forwarded accounts is subject to the most competitive rates in the state, of funds collected. Closed states include AK, AR, AZ, CT, HI, ID, MA, ME, MO, MN, NM, NV, OR, NY (New York City and Buffalo only), WA, WI, WV and WY.
12. In no event shall EDR be liable in any respect for the inability to collect any account placed with EDR by CLIENT for collection. CLIENT agrees and shall hold EDR harmless from any claim, demand, action, cost or judgment, including, but not limited to, reasonable attorney fees or court costs arising out of any action, failure or negligence by EDR in connection with the collection of any claim(s) placed with EDR by CLIENT for collection. EDR is not a law firm and does not give legal advice. Advice concerning this collection or any legal matter should be obtained from an attorney.
13. This contract shall be construed in accordance with the laws of the State of Colorado. In the event that any provision hereof is found to be invalid or unenforceable, then that provision shall be deemed to be severed and removed and the remaining provisions shall remain valid and in full effect. In the event of the commencement of any action under this agreement, the parties agree that venue will be proper in the County of Boulder, Colorado and expressly consent to the jurisdiction of that Court.
