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Is a debt collector charging you a fee to pay them?

In recent years, some debt collectors have started adding a “convenience fee” or a “payment processing fee” when you use a credit or debit card to make payments on a debt.  Consumers have been challenging this practice as violating the Fair Debt Collection Practices Act and similar state laws.  The Consumer Financial Protection Bureau has taken the position that federal law bars “pay-to-pay” fees. This is a developing area of the law, and different courts have made conflicting rulings on when these fees are prohibited.  Most courts are ruling that if the collection agency is profiting from this fee, for instance charging $10 on a $100 payment, the fee is illegal.  Some courts have ruled that it’s OK for a collector to charge an amount that only covers the fee it is actually paying a credit card processor, usually 2%-3%, so long as it’s not taking a kickback from the payment processing company.  Other courts have ruled that it’s NEVER  permissible for a collector to add these fees.


If you have been paying a debt collector who is adding a fee when you make a payment, please contact us.  Debt collectors already make enough money.  There is no reason you should pay them an extra fee when you are paying off a debt.

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