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What is a convenience fee or pay-to-pay fee?

Companies might charge a fee when they process your payment through a specific channel, such as by phone or online. This is known as a pay-to-pay or convenience fee. When a debt collector charges you a convenience fee, it’s only legal if you agreed to the fee when you first took out the debt, or a law specifically allows the fee.

A pay-to-pay fee – also known as a convenience fee – is a fee charged by a company when you make a payment through a particular channel.

For example, companies sometimes allow you to make a payment in person or by mail for free but charge you a fee for the convenience of taking your payment over the phone or online. These fees generally range from a couple of dollars to $15 or more.

Pay-to-pay fees charged by debt collectors

If your payments are past-due, your creditors may work with a third-party debt collector to collect on what you owe. In addition to collecting on your payments, a debt collector might charge a convenience fee when you make a payment. However, under the Fair Debt Collection Act, this is only legal if you agreed to the fee when you first took out the debt, or if another law applicable to your circumstances specifically says the fee is allowed.

For example, if a debt collector is attempting to collect on your credit card debt, your credit card agreement needs to expressly say you can be charged pay-to-pay or convenience fees.

If the credit card agreement or a law applicable to your circumstances doesn’t clearly authorize it, the debt collector can’t charge or collect this additional fee.

If you run into an issue with a company charging a pay-to-pay fee, you can submit a complaint through the CFPB.