Charging optional fees for making expedited mortgage payments online or by phone violates the Fair Debt Collection Practices Act (FDCPA), according to the Eleventh Circuit. Glover v. Ocwen Loan Servicing, LLC, 127 F. 4th 1278 (11th Cir. Feb. 4, 2025). The FDCPA prohibits collection of any fee that is not expressly authorized by the agreement creating the debt or permitted by law. 15 U. S. C. §1692(f)(1).
Glover and another plaintiff filed consolidated actions alleging that they paid a payment processing company, Speedpay, Inc., an additional “convenience fee” for mortgage payments made online or by phone instead of by mail. Speedpay received a small percentage of the fees, which ranged from $7.50 to $12.00; Ocwen received the rest. Together, the plaintiffs alleged that they paid the fees 36 times. (Both plaintiffs had opted out of a class action filed in Alabama challenging the use of Speedpay fees.) The parties stipulated the facts for trial. The district court agreed with the plaintiffs and awarded actual damages under the FDCPA. Ocwen appealed.
In his opinion for the Eleventh Circuit, Senior Judge Chuck Wilson noted that Ocwen was concededly a “debt collector” subject to the FDCPA and that the issue was unresolved by the Eleventh Circuit, though it has been “heavily litigated in the Middle and Southern Districts of Florida.” Ocwen argued that Speedpay fees were separate fees for the separate service of accepting expedited payment, so it wasn’t collecting a debt when it charged the fee. The court explained that to establish a violation of the statute, the debtor needed only to establish that Ocwen charged the Speedpay fee while collecting or attempting to collect a debt. This was consistent with the only circuit court opinion on the issue, by the Fourth Circuit in Alexander v. Carrington Mtge. Servs., LLC, 23 F. 4th 370, 376 (4th Cir. 2022), and with advisory opinions from the Consumer Financial Protection Bureau and the Federal Trade Commission. The court specifically rejected Ocwen’s arguments that the fees were implicitly “permitted by law” by the Truth in Lending Act or the Electronic Funds Transfer Act. The court closed by noting that Ocwen could have permissibly collected the fee if the agreement creating the debt had expressly provided fair warning of the cost to the consumer of the expedited payment option.