Have you been paying “convenience fees” for paying your credit card and other debts? The kind of “convenience fee” where the debt collector charges you a fee to make your payment over the phone? If so, your debt collector is probably violating federal law. The federal Consumer Financial Protection Bureau (“CFPB”) — an agency dedicated to protecting against creditor abuse — recently announced an advisory opinion saying that so-called convenience fees — where a consumer pays a fee to pay their debt obligations — violate the Fair Debt Collection Practices Act (“FDCPA”) unless the fee and the amount of the fee are specifically permitted by the credit agreement or by State law. See CNBC media report here.
Most credit agreements do NOT allow these fees and do NOT set the fee amount and most State laws do NOT specifically allow these “convenience” fees. Thus, most consumers and debtors are being abused by their creditors and the CFPB has sent a warning. The CFPB calls these fees “exploitative” and “junk.”
If you have been paying convenience fees, contact us here at Guardian Litigation Group. Our number is (949) 444-5474. We are California Debtors’ Rights Lawyers that can help you recover money damages if your rights have been violated. We are your “go-to” California Debt Collector Abuse Attorneys.
The CFPB says that these convenience fees are unlawful because of various provisions in the FDCPA. As the name suggests, generally, the FDCPA prohibits unfair and abusive debt collection practices. There is an extremely broad range of actions and activities done by debt collectors that have been deemed “unfair” and “abusive.” One example of an unfair debt collection practice is where a debt collector charges and collects an amount of money — like any sort of “fee” — that is not allowed by the loan documents or by State law. To date, the argument is that, mostly, State laws are silent on whether a debt collector can charge a convenience pay-to-pay fee. As one would expect, debt collectors then argue that since collecting such fees is not prohibited, then it is permitted.
However, the CFPB has rejected that false and pro-creditor approach. The CFPB explicitly states in its press release that “[w]here no law expressly authorizes a fee, it is not ‘permitted by law,’ even if no law expressly prohibits it.”
The same legal rule applies here in California under the Rosenthal Fair Debt Collection Practices Act (“RFDCPA”). See Cal. Civil Code, §§ 1788 et seq. Like the federal version, the RFDCPA bars a debt collector from collecting any “fee” unless such charges/fees are expressly authorized by the loan agreement creating the debt or unless such “are otherwise permitted by law.” California law does not permit such fees. Thus, they are illegal under both federal and California laws.
Contact Our Experienced Debtor’s Rights Attorneys
For more information, contact the Consumer and Debtor Rights attorneys at Guardian Litigation Group. We have the tools and legal experience necessary to protect you, vindicate your rights, and potentially, recover money damages on your behalf. Our Mission is to provide unparalleled legal services and support to consumers and financially distressed individuals. We can be reached via our contact page or by phone at (949) 444-5474. We are located in Irvine, California.