Mortgage Service Company Must Face Lawsuit Over Convenience Fee

A mortgage service provider must face a suit alleging the convenience fee it charges mortgagors for making payments online or by phone violates Maryland consumer protection law because it is a “collector,” the Fourth Circuit said.

The Maryland Consumer Debt Collection Act prohibits “collectors” from violating the federal Fair Debt Collection Practices Act. The FDCPA prohibits the collection of any “amount” that isn’t “expressly authorized by the agreement creating the debt or permitted by law.”

Ashly Alexander and Cedric Bishop brought a class action against Carrington Mortgage Services LLC, claiming that its $5 fee was illegal in Maryland. The district ...