If a service charge is assessed, the amount is the same as which of the following?

• A. The fee charged for the collection of a check drawn on insufficient funds
• B. Double the fee charged for the debt
• C. Half the amount of the debt
• D. A fixed amount set by the court

Answer: (A)

A service charge is a cost to cover the expense of collecting a debt, and when a payment is a check drawn on insufficient funds, the collection process has a specific fee. The service charge is set to match that NSF (non-sufficient funds) check collection fee because both are meant to reimburse the creditor for the same collection costs, independent of the debt’s size. It isn’t determined by doubling or halving the debt, and it isn’t automatically a court-set fixed amount unless a statute requires it. Therefore, the service charge amount is the same as the fee charged for collecting an NSF check.