Abington Cole + Ellery is conducting a class action investigation regarding fee assessments for pay-by-phone services (phone pay fees) and potential violations of Federal consumer financial laws prohibiting unfair, deceptive, or abusive acts or practices when assessing phone pay fees.
Many companies provide consumers multiple payment options. For instance, some provide consumers the option of making payments over the phone by using an automated system or speaking with a live representative. Many companies also provide consumers the option to make phone payments by using a credit card, debit card, or electronic check, or to have their payment expedited. Companies include: credit cards, cable, internet, utilities, banks, etc. Federal laws may restrict fees related to these phone payments.
Many companies charge different phone pay fees depending on the payment method used by the consumer. Prior to charging such fees, companies sometimes send periodic billing statements or other documentation that discloses that “transaction fees may apply” to various payment methods, but that do not disclose the relevant fees to be charged for those methods. In some of these instances, companies may depend solely on phone representatives to disclose the relevant fees to consumers before the charge is imposed. Yet, the phone representatives may potentially only reveal the higher-cost options or fail to inform consumers of the material price difference between available options. This conduct poses a risk of an unfair practice: it may cause substantial harm to consumers, who are pushed into materially higher-cost options; this harm may not be reasonably avoidable if consumers are unable to select lower-cost alternatives because they do not have the necessary information to know that such options are available; and countervailing benefits to consumers or competition may not warrant the company’s failure to disclose the materially different prices of the available phone pay options to its consumers.
Companies sometimes charge a fee for expedited phone payments, but also offer consumers no-fee phone pay options that post after a processing delay. Some companies in turn offer their fee-based expedited payment option as their default pay-by-phone option. In such cases, disclosures in connection with the default option may risk misleading consumers into believing that a fee is required under all circumstances to make any payment by phone.
A company may risk engaging in a deceptive act or practice when it fails to disclose that a phone pay fee will be charged in addition to a consumer’s otherwise applicable payment amount and indicates to that consumer that only the otherwise applicable payment amount will be charged. This conduct may leave the misimpression that there is no service fee, when in fact the company does charge the consumer a fee. This potential misrepresentation may be material to consumers because a consumer who knows about the fee may inquire whether there is an alternative payment option with a lower fee or may choose a payment method that requires no fee.
If you have used a pay-by-phone service, believe you may have been the victim of unfair, deceptive, or abusive acts or practices while making a phone payment, and would like to participate in a class action lawsuit regarding the phone payment, please complete and submit the contact form on this page.