Collector - October 2017 - 44
CFPB Issues Compliance Bulletin on Fees for Phone Payments
The bureau warns of potential UDAAP and FDCPA risks related to charging fees for payments made by phone.
By Kim Rath
he Consumer Financial Protection
Bureau's most recent compliance
bulletin, Compliance Bulletin 201701: Phone Pay Fees, provides guidance
to the credit and collection industry
regarding fee assessments for making
payments over the phone and outlines
the potential risk for violations of the
prohibition on unfair, deceptive or abusive
acts or practices (UDAAPs) or the Fair
Debt Collection Practices Act.
The bulletin reflects the CFPB's concern
that companies may potentially mislead
consumers about the purpose and amount
of certain pay-by-phone fees or fail
to inform them about alternative, less
expensive (or free) payment options.
In its bulletin, the CFPB identifies
conduct related to pay-by-phone fees
that may constitute UDAAPs, including
failing to disclose the prices of all available
payment options when they carry different
fees and lacking adequate employee
monitoring or service provider oversight.
The bulletin also provides debt collectors
guidance on complying with the FDCPA
when charging fees for taking payments
over the phone, noting that the FDCPA
prohibits a debt collector from charging
certain fees, including phone pay fees,
unless such amount is expressly authorized
by the agreement creating the debt or
expressly authorized by state law.
While the CFPB's recent bulletin does
not mandate any particular way to inform
consumers about pay-by-phone options
and fees-nor does it expressly prohibit
such fees-the bureau expects entities to
review their practices on charging fees for
phone payments to assess whether they may
present a risk of committing a UDAAP or
In conducting such a review, the bulletin
suggests entities do the following:
* Review applicable state and federal
laws (including the FDCPA) to
confirm whether fees for phone
payments are permissible.
* Review underlying debt agreements
to determine whether such fees are
authorized by the contract.
* Review and revise (as appropriate)
internal and service providers'
policies and procedures related to
phone pay fees, including call scripts
and training materials.
* Review where information on phone
pay fees is shared, such as in account
disclosures, loan agreements, periodic
statements, payment coupon books,
on the company's website, over the
phone or other mechanisms.
* Incorporate pay-by-phone issues in
regular employee monitoring or audits
of calls with consumers.
* Review consumer complaints
regarding fees that are charged.
* Perform regular reviews of service
providers as to their pertinent practices
(refer to CFPB Compliance Bulletin
* Review employee and service provider
incentive programs to determine if there
are incentives to steer borrowers to certain
payment types or to avoid disclosures.
* Review that the company has a
corrective action plan to address any
violations and to reimburse consumers
This new bulletin serves as a warning that
the CFPB will be closely reviewing conduct
related to phone pay fees. Entities are strongly
encouraged to review applicable laws to
confirm whether they may charge such fees,
and carefully review their business practices
for assessing fees for payment options.
ACA members may review state
requirements related to payment fees in
ACA's SearchPoint™ document, Payment
Transaction Fees, at www.acainternational.
Kim Rath is ACA International's
director of compliance.
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