CFPB warns debt collectors about ‘pay-for-pay’ fees

By Jon Hill (June 29, 2022, 4:07 p.m. EDT) – The Consumer Financial Protection Bureau decided Wednesday to limit the use of so-called convenience fees in the debt collection industry, issuing an advisory notice that debt collectors are generally prohibited from charging additional fees for payments made online or over the phone.

The CFPB’s advisory opinion finds that such “payment for payment” charges violate the Fair Debt Collection Practices Act unless they are expressly authorized by the contractual wording of the debt to be collected or are otherwise specifically authorized by law.

“Federal law generally prohibits debt collectors from charging additional fees not authorized by the original loan,” said CFPB Director Rohit Chopra…

Stay one step ahead

In the legal profession, information is the key to success. You need to know what’s going on with customers, competitors, practice areas and industries. Law360 provides the intelligence you need to stay an expert and beat the competition.

  • Access to case data in articles (numbers, filings, courts, nature of lawsuits, etc.)
  • Access to attached documents such as briefs, motions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and more!

TRY LAW360 FREE FOR SEVEN DAYS

Comments are closed.