On July 27, 2017 the CFPB issued Compliance Bulletin 2017-01:  Phone Pay Fees, reminding companies that misleading consumers about fees associated with payments over the telephone may be deemed as UDAAP violations.

The Bulletin states, that depending on the facts and circumstances, the following may constitute UDAAP violations:

• Failing to disclose the prices of all available phone pay fees when different phone pay option carry materially different fees
• Misrepresenting the available payments options or that a fee is required to pay by phone
• Failing to disclose that a phone pay fee would be added to a consumer’s payment could create the misimpression that there was no service fee
• Lack of employee monitoring or service provider oversight may lead to misrepresentations or failure to disclose available options and fees

While the CFPB does not mandate any particular method for informing consumers about available phone pay options and fees, entities should consider the following suggestions in assessing whether their practices may present a risk of constituting a UDAAP or FDCPA violation:

• Review applicable State and Federal laws, including the FDCPA, to confirm whether entities are permitted to charge phone pay fees.
• Review underlying debt agreements to determine whether such fees are authorized by the contract.
• Review internal and service providers’ policies and procedures on phone pay fees, including call scripts and employee training materials, and revise policies and procedures to address any concerns identified during the review, as appropriate.
• Review whether information on phone pay fees is shared in account disclosures, loan agreements, periodic statements, payment coupon books, on the company’s website, over the phone, or through other mechanisms.
• Incorporate pay-by-phone issues in regular monitoring or audits of calls with consumers.
• Review consumer complaints regarding phone pay fees.
• Perform regular reviews of service providers as to their pertinent practices.
• Review that the entity has a corrective action program to address any violations identified and to reimburse consumers when appropriate.