The North Carolina Insurance Commissioner recently published a Frequently Asked Questions document clarifying its order, amended order, and bulletin issued over the past week, which require debt collection agencies to give North Carolina consumers the option of deferring debt payments for a period of 30 days from the due date of payment.

While an analysis of the provisions is available here, the FAQ clarified the following information:

  • How does the order apply to collection agencies? “The Bulletin and Order applies to ALL debts not only insurance debt.”
  • Do collection agencies have to proactively reach out to consumers to make them aware of this deferral option? No, “it is up to the customer to take the necessary steps to contact the collection agency to discuss their options.”
  • If a collection agency contacts an individual about repayment, does the agency have to communicate this deferral option? Yes, “[i]f the collection agency contacts the customer to discuss repayment, the agency must advise the customer of the option to defer the payment for 30 days.” However, the customer must state his or her desire to exercise this deferral option. The deferral option does not start automatically upon notification of this option to a consumer.
  • If a consumer elects to defer payments, which activities are suspended?


    • “All debt pursuits and collection activities should cease,” including “transmission of notices of action, any payments which are currently in collection, including those where a payment schedule has been set-up, and time limits imposed by statute.”
    • “Not just payments are deferred; ANY collection activity should cease for 30 days.”
    • Late fees, penalties, or additional fees may not be applied.
  • Do recurring payments have to stop? No, collection agencies do not need to affirmatively communicate this deferral option. However, collection agencies must inform consumers of this deferral option during any communication. Recurring payments may continue until a consumer affirmatively communicates that he or she wishes to exercise the deferral option.
  • Do law firms collecting on the accounts fall under the definition of a collection agency? No, NCGS § 58-70-15(c)(8) specifically exempts “[a]ttorneys-at-law handling claims and collections in their own name and not operating a collection agency under the management of a layman” from the definition of a collection agency. However, if the law firm is representing insurance companies to collect on insurance contracts or policies, then the firm must delay collection activities during the deferral period.
  • When does the order expire? April 26, 2020.