Mortgage servicers charging extra for payments by phone can be a FDCPA violation
- Peter Schneider
- Mar 27
- 5 min read
Updated: Apr 14
Often you can tell if you are dealing with a scammer business or entire industry if they charge extra for "convenience fees". Businesses that like their customers usually want to offer convenient payment methods.
The 11th circuit recently had to decide if if a mortgage servicer charging "convenience fees" for taking payments online or by phone ran afoul of the Fair Debt Collection Practices Act when those fees weren't authorized by the agreement creating the debt or permitted by law. The case is Glover v. Ocwen Loan Servicing, LLC, No. 23-12578 (11th Cir. 2025). Spoiler alert, the 11th circuit court of appeals ruled that they did. First, some history of the case:
Ocwen acquired servicing rights to Booze and Glover’s mortgages after they defaulted on their loans. Ocwen offered bor-rowers the option to make expedited payments over the phone or online, rather than by mail, for an additional convenience fee rang-ing from $7.50 to $12. Ocwen did not charge a fee for mailed pay-ments. The payment processing company, Speedpay, Inc., kept $0.40 of each fee. Ocwen kept the remainder. Glover and Booze paid the fees a combined total of thirty-six times. Neither of their mortgages nor promissory notes mentioned fees for making pay-ments online or by phone. The district court entered judgment for both plaintiffs, hold-ing: (1) Ocwen was acting as a debt collector when it charged Speedpay fees; (2) Speedpay fees are “expenses incidental to the principal obligation,” and are covered by the FDCPA; and (3) Speedpay fees are not permitted by law, nor expressly author-ized by the debt agreements. The district court awarded Glover and Booze actual damages. Ocwen timely appealed both judgments, which were consolidated on appeal.
I've talked at length in this blog how many trial court judges are anti consumer. Don't take my word for it, the 11th circuit said it themselves.
District courts in the Eleventh Circuit and around the coun-try are split over whether the FDCPA prohibits loan servicers from collecting “pay-to-pay” or “convenience” fees for the use of certain payment methods . . . Most judges in the Middle and Southern Districts of Florida have reached the conclusion that convenience fees are neither part of nor incidental to the transferred debt, but separate fees paid voluntarily for a separate service. When viewed in isolation, this conclusion has some merit. But it overlooks the broader context in which debt collection activities occur. Ocwen’s convenience fees may have been optional, but it charged those fees to consumers who had no option but to do business with it.
Ocwen acquired servicing rights to Booze and Glover’s mortgages after they defaulted on their loans. Ocwen offered borrowers the option to make expedited payments over the phone or online, rather than by mail, for an additional convenience fee ranging from $7.50 to $12. Ocwen did not charge a fee for mailed payments. The "convenience fees" was a cash grab, the payment processing company, Speedpay, Inc., kept $0.40 of each fee. Ocwen kept the remainder. Presumably mailed payments were subject to the same 40 cent payment processing fee.
Typically the FDCPA only applies to debt collectors, not original creditors, and the court found that Oswen was a “debt collector” subject to the restrictions of the FDCPA. Glover came to Ocwen because of missed payments but most mortgages are serviced by someone other than the original creditor.
By purchasing servicing rights to Booze and Glover’s defaulted mortgages and regularly collecting monthly mortgage payments owed to their lenders, Ocwen acted as a “debt collector.” Ocwen admits it collected similar payments from many other bor-rowers. Because Ocwen acts as a “debt collector” when it services the underlying mortgage loans, the FDCPA restricts Ocwen’s con-duct when it collects or attempts to collect “debts.”
And Ocwen protested that it wasn't acting as a “debt collector” when it charged the convenience fees, using the argument it was charging a separate fee for a separate service of accepting expedited [compared to mailing] payments. The 11th circuit didn't bite.
1692f(1) most logically prohibits the “conduct” of collecting “any amount” not authorized by the debt-creating agreement or permitted by law, while a debt collector is collecting a debt. Under the FDCPA, Glover and Booze need not show Ocwen was acting as a debt collector when it collected the Speedpay fee, only that it charged the amount while collecting or attempting to collect a debt. Here, they have done so because Ocwen charged the fee as a condition of accepting an online pay-ment on the debt that Ocwen was collecting. As a debt collector, the FDCPA prohibits Ocwen from using “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Among other “conduct,” Ocwen may not collect “any amount (including any interest, fee, charge, or ex-pense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permit-ted by law.” We hold that a debt col-lector violates the FDCPA when they charge “any amount” which is not expressly authorized by the agreement or permitted by law while collecting or attempting to collect a debt.
The 11th circuit joined the 4th circuit, who previously held in Alexander v. Carrington Mortg. Servs., LLC, 23 F.4th 370, 376 (4th Cir. 2022); that “‘any amount’ means what it says—any amount, whether or not that amount is incidental to the principal obligation.
Section 1691f(1) prohibits debt collectors from collecting “any amount, (including any interest, fee, charge, or expense incidental to the principal obligation).” (emphasis added). Congress’ use of “any” suggests an intent to use that term “expansively.” Smith v. Berryhill, 587 U.S. 471, 479 (2019). The Supreme Court has noted that “read naturally, the word ‘any’ has an expansive meaning, that is, ‘one or some indiscriminately of whatever kind.’” Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 219 (2008)
Glover v. Ocwen Loan Servicing, LLC is a great opinion that shows appellant judges are often much more mindful of the law than trial court judges. The Glover opinion goes on to discuss why "optional" fees in collecting debts is unlawful under the Fair Debt Collection Practices Act, unless, as the court noted, it is in the agreement that created the debt or authorized by law. Hopefully now you know more about how mortgage servicers charging extra can be a FDCPA violation
The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. Do you have more questions? We would be happy to answer your questions:
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Peter Schneider
206-800-6000
Robocalls and Telephone Consumer Protection Act questions:
Nathen Barton
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Fair Debt Collection Practices Act (FDCPA) questions:
Peter Schneider
206-800-6000
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