CFPB Moves to Reduce Junk Fees Charged by Debt Collectors

Share This Post

Today, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion affirming that federal law often prohibits debt collectors from charging “pay-to-pay” fees. These charges, commonly described by debt collectors as “convenience fees,” are imposed on consumers who want to make a payment in a particular way, such as online or by phone.

“Federal law generally forbids debt collectors from imposing extra fees not authorized by the original loan,” said CFPB Director Rohit Chopra. “Today’s advisory opinion shows that these fees are often illegal, and provides a roadmap on the fees that a debt collector can lawfully collect.”

Debt collectors play a critical role in the consumer finance ecosystem, and the CFPB wants to ensure that law-abiding debt collectors are not disadvantaged by their competitors that impose unlawful fees. 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 types of payments. These debt collectors do so even if it is cheaper and less time-consuming for them to process phone and online payments than it is to process the paper-check payments delivered by mail or in person that debt collectors typically process for free. These types of fees are often illegal, and today’s advisory opinion and accompanying analysis seek to stop these violations of law and assist consumers who are seeking to hold debt collectors accountable for illegal practices.

The advisory opinion interprets the language in Section 808 of the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from collecting any amount that is not expressly authorized by the underlying agreement or permitted by law. The FDCPA was passed in 1977 in response to widespread abuses in the debt collection industry, which Congress acknowledged was not subject to appropriate regulation under existing laws at the time. In 2010, the Consumer Financial Protection Act transferred primary responsibility for the FDCPA, including issuing regulations and ensuring compliance, to the CFPB.

The advisory opinion covers the following on debt collection practices:

  • Identifies scope of illegal fees: The collection of any fee is prohibited unless the fee amount is in the consumer’s contract or affirmatively permitted by law.
  • Affirms that silence in the law is not an authorization: A debt collector may only collect a fee when it is authorized by the agreement creating the debt or is “permitted by law.” Where no law expressly authorizes a fee, it is not “permitted by law,” even if no law expressly prohibits it.
  • Clarifies role of payment processors: Debt collectors violate the FDCPA when using payment processors who charge unauthorized fees at a minimum if the debt collector receives a kickback from the payment processor.

Read the advisory opinion.

Today’s advisory opinion continues the CFPB’s focus on addressing junk fees in consumer finance. Last week, the CFPB announced a review of the credit card industry’s penalty policies costing consumers over $12 billion each year, and published an Advance Notice of Proposed Rulemaking asking for information to help determine whether regulatory adjustments are needed to address late fees under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). In addition, the CFPB earlier this year sent out a request for information to hear from the public about potential junk fees. The comments that the Bureau received are available for public inspection here .

Consumers encountering problems with debt collectors charging unauthorized additional fees to make payments can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

###

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.

Official news published at https://www.consumerfinance.gov/about-us/newsroom/cfpb-moves-to-reduce-junk-fees-charged-by-debt-collectors/

Images courtesy of PixaBay

Related Posts

FTC and DOJ File Statement of Interest in Hotel Room Algorithmic Price-Fixing Case

The Federal Trade Commission joined by the Justice Department’s...

FTC Releases 2023 Privacy and Data Security Update

The Federal Trade Commission released its Privacy and Data...

RedeemTV Announces New Documentary: ‘The Shroud Face to Face’

RedeemTV Announces New Documentary: ‘The Shroud Face to Face’
Company Logo

RedeemTV ? Streaming Goodness

Vision Video’s streaming platform RedeemTV is set to unveil the highly anticipated documentary The Shroud Face to Face on March 28, 2024.

The Shroud Face to Face, produced by The Nexus Institute and The Shroud LLC, is a captivating documentary that unravels the enigma of the Shroud of Turin. With cutting-edge technology and expert insights, the film provides a face-to-face encounter with this iconic relic, inviting audiences to delve into its history, authenticity, and the profound questions it raises.

This visually stunning film, based on the book The Shroud Face to Face by acclaimed author and filmmaker Robert Orlando, offers an immersive exploration of the centuries-old mystery surrounding the Shroud of Turin and has been endorsed with high praise.

"This is a compelling and convincing account of the single most fascinating relic in the Christian world. This is for anyone seeking to understand the significance and history of the Shroud of Turin.” — Bishop Robert Barron, founder of Word on Fire

'The Shroud Face to Face'

Watch Trailer: https://watch.redeemtv.com/trailer/the-shroud-trailer

RedeemTV is a FREE, donor-supported, Christian streaming platform with over 250,000 subscribers. Streaming more than 5,000 videos, it provides family-friendly content while continuing to spread the message of Jesus.

Vision Video is a leading DVD and film distributor, committed to bringing impactful and compelling stories to audiences worldwide. With a focus on cinematic excellence, Vision Video partners with filmmakers to showcase thought-provoking narratives that inspire and captivate.

The Nexus Media focuses on TV, motion pictures, books, and screenplays, along with award- winning documentaries and shorts. Our team has years of experience in media storytelling and developing well-crafted engaging content. We invite you to view some of our past projects, The Divine Plan and Silence Patton, and participate in our new initiatives.

Stream FREE on RedeemTV: https://redeemtv.com.

Find us on Facebook at https://www.facebook.com/RedeemTV.

Follow us on Instagram at https://www.instagram.com/redeemtv1.

Contact Information:
Danielle Tumminelli
Marketing & VOD Distribution Manager
danielle@visionvideo.com
484-750-2485


Original Source: RedeemTV Announces New Documentary: 'The Shroud Face to Face'
green agriculture project
- Part of VUGA Media group -best seo company