The Consumer Financial Protection Bureau (CFPB) has issued an advisory opinion regarding convenience fees debt collectors impose on consumers seeking to make a payment in a particular way.
“Federal law generally forbids debt collectors from imposing extra fees not authorized by the original loan,” CFPB Director Rohit Chopra said.
The advisory opinion shows the fees are often illegal and provides a roadmap on the fees a debt collector can lawfully collect, Chopra said.
The opinion addresses payment methods that include online or phone. The CFPB seeks to ensure debt collectors abiding by the law are not disadvantaged by competitors that impose unlawful fees.
The CFPB noted while most debt collectors allow consumers to make payments by phone or online without charging additional fees, some debt collectors impose additional fees for those payment methods.
The opinion, which interprets the language in Section 808 of the Fair Debt Collection Practices Act (FDCPA), maintains a collection of any fee is prohibited unless the fee amount is in the consumer’s contract or affirmatively permitted by law; a debt collector may only collect a fee when it is authorized by the agreement creating the debt or is permitted by law; and debt collectors violate the FDCPA when using payment processors charging unauthorized fees at a minimum if the debt collector receives a kickback from the payment processor.
The CFPB recommends consumers encountering problems with debt collectors charging unauthorized additional fees to make payments submit a complaint with the agency online or by phone by calling (855) 411-CFPB (2372).