Is it silly to go to collections over such a small amount? Absolutely. I do think the system is a little ridiculous too. Technically what happens is Certegy provides authorization (much like Visa and Mastercard authorize a credit card). They check to make sure the routing number / account number, Drivers License are all legit etc. Once they do that, they pay Godaddy the amount of the product and they deduct the amount out of the consumers account. On the first transactions, there is usually not a problem. The problems usually arise when the item auto renews. I'm pretty sure Certegy doesn't reauthorize everything and they just assume the $8.00 charge will go through. They pay Godaddy, but then when they can't collect the money, they technically send you to collections. Godaddy tries to stay out of the middle of it and tell you to call Certegy etc. which honestly is a big hassle and I don't think Godaddy handles it the best from a customer service standpoint, but that is actually what is going on. Godaddy doesn't send to collections, its the Certegy company that does. If you call up Certegy and paid whatever is owed within a certain amount of time, it will never go to collections.