by Scott W. Lee, JD, CCE
Idaho recently made a ruling that those who deal with customers in Idaho should be aware of. You may want to review the documents cited and talk to your counsel about any action you should take within your company.
The Idaho Department of Finance published a notice dated July 29, 2014 that may change your right to collect interest and fees against Idaho debtors. The Department’s position is based upon the Idaho Supreme Court ruling in Medical Recovery Services, LLC v. Strawn, 156 Idaho 153, 321 P.3d 703 (2014). The Court was asked to interpret Idaho Code § 26-2229A(4). There seems to be no distinction between consumer and commercial debtors. The references are simply to “Idaho debtors.”
The Court held that, except in certain narrow situations, it is not permissible to add “incidental” charges. The Court only allowed collection of the “principal obligation.” The Department states plainly that the “principal obligation” is what the cash price would have been had the debt been paid immediately.” To clarify that statement, the notice states it is not “lawful to collect, or attempt to collect, ‘any interest or other charges, fees, or expenses,’ no matter how labeled, against an Idaho debtor that are incidental to the debtor’s principal obligation… .”
So if you deal with customers in Idaho, it would seem that any recourse must be had by lobbying the Idaho legislature.