Debt Collection, Convenience Fees, and the FDCPA

In the era of online banking and the Internet of Things, the ability to pay your mortgage in a manner other than sending in a paper check evidences both convenience and complication. Convenience to the borrower, in that there are many avenues to quickly make a payment, even a late payment, to avoid incurring a late charge. But complication to the servicer, who may wish to charge for that convenience, but would do so in the face of significant compliance risk. This article explores whether (and how) mortgage servicers may collect such convenience fees without running afoul of the Federal Debt Collection Protection Act (“FDCPA”). 

Originally published in The Review of Banking & Financial Services; reprinted with permission.