• CFPB Issues Pay by Phone Compliance Bulletin
  • August 24, 2017 | Authors: Marjorie A. Corwin; Robert A. Gaumont; Christopher R. Rahl
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • On July 27, 2017, the Consumer Financial Protection Bureau (CFPB) issued a compliance bulletin addressing pay by phone fees. The bulletin describes conduct that the CFPB views as unfair acts or practices: (a) failing to disclose the prices of all available pay by phone fees when different pay by phone options carry materially different fees (e.g., situations where the fees for phone payments are only disclosed by phone representatives at the time of payment and the phone representatives do not disclose lower cost options or inform consumers about the material price differences between options); (b) misrepresenting the available payment options or that a fee is required to pay by phone (e.g., situations where there are multiple pricing options to pay by phone and only the highest cost option is promoted); (c) failing to disclose that a pay by phone fee will be added to a consumer’s payment (creating the impression that there is no fee for the pay by phone method); and (d) failing to adequately monitor/supervise employees and service providers (potentially leading to misrepresentations to consumers and/or the failure to disclose available payment options/fees). The bulletin also takes issue with any system of compensation that provides financial incentives for creditor/debt collector promotion of pay by phone options that carry a fee. In addition, the bulletin notes that the CFPB views the following practice by debt collectors as prohibited under the Fair Debt Collection Practices Act: collecting a pay by phone fee where the underlying agreement does not specify the fee or state law does not expressly authorize the fee. Please contact Christopher Rahl for questions concerning this topic.