Convenience fees charged by some debt collectors for making phone or internet payments are “often illegal,” the Consumer Financial Protection Bureau said Wednesday.
Payment fees frequently referred to as ‘pay-to-pay’ fees are barred in many circumstances by the Fair Debt Collection Practices Act, a 1977 law governing the industry, the CFPB said in an advisory opinion. Allowable fees must be affirmatively permitted by state law, or authorized in the underlying agreements that consumers have with their creditors, such as as credit card companies, the CFPB said.
Debt collectors can’t tack on fees independently, the bureau said.
The collections industry refers ...