Collector - August 2020 - 29

Fees can offset the
administrative costs of debt
collection, but they can also
expose your company to
potential liability. Proceed
with caution.
By David N. Anthony and Jonathan P. Floyd

C

onvenience fees have emerged as
a prominent topic in the accounts
receivable management (ARM)
industry as creditors and debt collectors
look to defray the expense of payment
processing and the Consumer Financial
Protection Bureau continues to signal
that such fees are appropriate, so long
as they comply with applicable laws and
regulations.
Although the ability to charge fees
associated with credit card and debit card
transactions is born out of the specific rules
of each credit card company as outlined in
the cardmember agreement, the ability for
third-party debt collectors to charge fees
associated with credit card and debit card
transactions is further regulated by state
law, the Fair Debt Collection Practices Act 
and consent orders and guidance bulletins
published by CFPB.
As attractive as convenience fees are,
this convoluted web of legal and regulatory
obstructions is enough to give any industry
participants pause as they consider whether
to risk an increase in both litigation and
regulatory oversight.
We'll take a look at the ways in which
various courts have treated convenience
fees under the FDCPA as well as general
guidance currently available from the CFPB.
State-specific regulations may also affect the
ability to charge convenience fees.

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Collector - August 2020

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