CFPB Issues Guidance on Phone Pay Fees

Pay-by-phone fees continue to attract the Consumer Financial Protection Bureau's attention. Compliance Bulletin 2017-01, issued on July 27, 2017, indicates that the following acts or practices may constitute unfair, deceptive, or abusive acts or practices ("UDAAP") or contribute to the risk of committing UDAAPs:

1. Failing to disclose the prices of all available phone pay fees when different payment options carry materially different fees;
2. Misrepresenting the available options or that a fee is required to pay by phone;
3. Failing to disclose that a phone pay fee would be added to a consumer's payment, which could create the misimpression that there is no service fee; and
4. Lack of employee monitoring or service provider oversight, which may lead to misrepresentations or failure to disclose available options and fees.