In McWhorter v. Ocwen Loan Servicing, LLC, No.: 2:15-cv-01831-MHH, 2017 WL 3315375 (N.D. Ala. August 3, 2017), Judge Haikala found that a defendant’s charging of fees associated with telephonic Speedpay fees stated a claim under the FDCPA.
When Mr. McWhorter and Mr. Fielder made loan payments to Ocwen online and over the telephone, Ocwen and Western Union charged convenience fees, or “Speedpay” fees, to process those payments. Western Union collected the fees from Mr. McWhorter and Mr. Fielder and remitted a portion of the fees to Ocwen. Mr. McWhorter and Mr. Fielder assert that the defendants’ imposition of the Speedpay fees and Western Union’s remittance of a portion of those fees to Ocwen violate the FDCPA.
The District Court found that the Plaintiff stated a claim under the FDCPA for the Defendants’ charging of Speedpay fees.
Ocwen argues that, even if it were a debt collector that engaged in conduct related to debt collection with respect to Mr. McWhorter and Mr. Fielder, the Court should dismiss the plaintiffs’ claims because Speedpay fees do not violate the FDCPA as a matter of law. (Doc. 9, pp. 16–27). The Court disagrees. 15 U.S.C. § 1692f(1) makes it unlawful for a debt collector to collect “any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” 15 U.S.C. § 1692f(1). Citing an unpublished Sixth Circuit case and an unpublished district court case from California, Ocwen argues that the Speedpay fees in question here do not violate the FDCPA because the fees were optional and avoidable. (Doc. 9, pp. 18–19) (citing Lee v. Main Accounts, Inc., 1997 WL 618803, at *1 (6th Cir. Oct. 6, 1997) and Flores v. Collection Consultants of Cal., 2015 WL 4254032, at *10 (C.D. Cal. Mar. 20, 2015)). In addition, Ocwen argues that the Speedpay fees are authorized by the Electronic Fund Transfer Act (EFTA) and are thus “permitted by law.” (Doc. 9, pp. 23–27). The Court is not persuaded by Ocwen’s arguments. As the plaintiffs point out in their response brief, Ocwen overlooks the fact that the courts in Lee and Flores concluded that the convenience fees in those cases did not violate the FDCPA in part because the optional fees “did not inure benefits to the collector.” Flores, 2015 WL 4254032 at *9. Here, the plaintiffs allege that Ocwen kept a portion of the Speedpay fees. (See Doc. 16, p. 12; Doc. 2, ¶ 11). Ocwen has presented, and the Court has found, no controlling case law holding that an additional fee does not violate the FDCPA when, as here, the underlying contract does not authorize the fee and the debt collector receives all or some of the fee. With respect to Ocwen’s argument that the Speedpay fees are permitted by law, the Court agrees with the district court in Newman v. Checkrite California, Inc. that “the word ‘permitted’ requires that the defendants identify some state statute which ‘permits,’ i.e. authorizes or allows, in however general a fashion, the fees or charges in question.” 912 F. Supp. 1354, 1368 (E.D. Cal. 1995). As the Second Circuit explained, “[i]f state law neither affirmatively permits nor expressly prohibits service charges, a service charge can be imposed only if the customer expressly agrees to it in the contract.” Tuttle v. Equifax Check, 190 F.3d 9, 13 (2d Cir. 1999). The plaintiffs did not expressly agree to the Speedpay fees in their contracts with Ocwen, and Ocwen has presented no Alabama law that authorizes a debt collector to impose convenience fees and collect a portion of those fees. The EFTA is not a state statute, and, moreover, the EFTA merely “provide[s] a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund and remittance transfer systems.” 15 U.S.C. § 1693(b). The EFTA does not authorize a debt collector to collect an additional convenience fee in connection with an amount owed on a principal obligation. Accordingly, Mr. Fielder has sufficiently alleged that Ocwen violated § 1692f(1) when it charged him Speedpay fees to make mortgage payments. If the Court finds that Ocwen is a debt collector with respect to the Mr. McWhorter (see pp. 6–10, above), then Mr. McWhorter will have stated a claim under § 1692f(1).