You call the collection agency to finally pay the thing off. The person on the phone is pleasant. They’ll take your card right now. There’s just a small processing fee for paying by phone, $5 or so, or you can mail a check.
Most people pay the five bucks. It feels like the price of getting it over with.
Federal law and Minnesota’s own collection statute both say a collection agency can’t collect that fee unless the agreement that created your debt expressly authorizes it or a law permits it. Then, in May 2025, the federal agency that wrote the clearest guidance on this point withdrew it. It’s easy to read that as a green light. It isn’t. The agency changed its mind about its guidance. Nobody changed the statute.
What does the federal law actually say?
It’s one clause of the Fair Debt Collection Practices Act. Section 1692f bars a debt collector from using “unfair or unconscionable means to collect or attempt to collect any debt”, and then lists conduct that violates it. First on the list:
(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
— 15 U.S.C. § 1692f(1)
That sentence hasn’t changed since Congress passed it in 1977. The federal debt collection rule, Regulation F, repeats it almost word for word: a debt collector “must not collect any amount unless such amount is expressly authorized by the agreement creating the debt or permitted by law”, and “any amount” includes “any interest, fee, charge, or expense incidental to the principal obligation.” 12 C.F.R. § 1006.22(b).
So there are exactly two ways in. The agreement creating the debt expressly authorizes the amount, or a law permits it. Pull out the original credit card agreement or the medical paperwork. It’s often silent about a fee for paying a collection agency by phone, because when you signed it, nobody was planning on a collection agency.
That leaves “permitted by law”. And that’s where the fight has been.
The CFPB said no. Then it took it back.
On July 5, 2022, the Consumer Financial Protection Bureau published an advisory opinion on what it called “pay-to-pay” fees. Its position was blunt: § 1692f(1) “prohibits debt collectors from collecting pay-to-pay or ‘convenience’ fees, such as fees imposed for making a payment online or by phone, when those fees are not expressly authorized by the agreement creating the debt or expressly authorized by law”. 87 Fed. Reg. 39733 (July 5, 2022). It read “permitted by law” to require a law that affirmatively authorizes the charge. Silence wasn’t permission. It also said a collector can violate the statute by running the fee through “a third-party payment processor.”
On May 12, 2025, the Bureau withdrew that opinion, along with a long list of other guidance, in a single notice. 90 Fed. Reg. 20084 (May 12, 2025). The pay-to-pay opinion is item 9 under “Advisory Opinions”. The Bureau said it would not enforce or rely on the withdrawn guidance “while this review is ongoing”, and that “[s]uch withdrawal is not necessarily final.”
So what changed for you? Less than you’d think. The withdrawal notice explained that “parties understand that guidance is generally non-binding and generally does not create substantive rights.” That cuts both ways. The 2022 opinion never created your rights in the first place. The statute did. An agency withdrawing its opinion about a statute doesn’t amend the statute. I checked the Federal Register through October 4, 2026, and found no replacement opinion and no new rule on pay-to-pay fees.
What did the courts say?
The two federal appeals courts I found that have squarely decided a pay-to-pay fee both read the statute the same way.
In January 2022, the Fourth Circuit took up a mortgage servicer that charged a $5 convenience fee to borrowers who paid online or by phone. The borrowers sued under a Maryland statute that makes a § 1692f(1) violation a violation of Maryland law. The servicer argued that the fee wasn’t really part of the debt and that nothing in the law prohibited it. The court rejected both halves. On the first, “‘any amount’ means what it says—any amount, whether or not that amount is incidental to the principal obligation”. Alexander v. Carrington Mortgage Services, LLC, 23 F.4th 370, 376 (4th Cir. 2022). On the second, it held that “‘permitted by law’ requires affirmative sanction or approval, typically (though not always) from a statute”. Id. at 376–77. Not just the absence of a law saying no.
The court also did the math the fee depends on nobody doing. Citing an industry survey, it noted that paying by check generally costs a collector between $1 and $4 to process, while an online or phone payment typically costs about $0.50. So the online option is “likely more cost-effective and less time-consuming for Carrington.” You’re paying a fee for the privilege of saving the collector money. That’s some convenience.
Three years later, in February 2025, the Eleventh Circuit decided a pair of cases against a servicer that took over servicing of the borrowers’ mortgages after they defaulted and charged “Speedpay” fees of $7.50 to $12 for payments online or by phone. Mail was free. The payment processor kept $0.40 of each fee, and the servicer kept the rest. The court held the servicer “violated the FDCPA because it is a ‘debt collector’ who charged an ‘amount’ that was not ‘expressly authorized by the agreement creating the debt or permitted by law.’” Glover v. Ocwen Loan Servicing, LLC, No. 23-12578, slip op. at 3–4 (11th Cir. Feb. 4, 2025).
That matters after the CFPB’s withdrawal, because Glover didn’t rest on the agency. It cited the 2022 opinion, but it treated the agencies’ long, consistent reading of the statute as having “persuasive value”, citing Loper Bright. Slip op. at 21–22 n.14. The holding comes from the statute’s own words. The Bureau’s withdrawal doesn’t reach back and undo that.
The Eleventh Circuit also took the collector’s best argument head on, and it’s a fair one. A lot of district judges in Florida had held these fees were “separate fees paid voluntarily for a separate service.” The court admitted, “[w]hen viewed in isolation, this conclusion has some merit.” Then: “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.” Slip op. at 3. You don’t get to pick your collector. That’s the point the court kept coming back to.
I didn’t find an Eighth Circuit decision on a pay-to-pay fee, or a Minnesota federal or state decision on one. I searched CourtListener’s Eighth Circuit, District of Minnesota, and Minnesota appellate collections under “convenience fee”, “pay-to-pay”, “processing fee”, and “Speedpay”. CourtListener has real gaps. So as far as I can find, neither the Eighth Circuit nor a Minnesota appellate court has answered it, and the Fourth and Eleventh Circuits aren’t binding here. They’re persuasive.
Does it matter that it’s only five bucks?
Not to the statute. The Eighth Circuit settled that a long time ago.
In 2000, in a case out of Minnesota, the Eighth Circuit looked at collection letters on bounced checks of $25.00, $11.38, and $24.40. The court agreed that a $20 service charge and a $10 collection fee were authorized by Minnesota’s bad-check statute, so they were fine. But the letters also overstated interest, by $1.29, $1.84, and $0.65 for the three debtors. That was enough. The letters “were nonetheless an attempt to collect interest not permitted by law, and therefore a violation of the plain language of section 1692f(l).” Duffy v. Landberg, 215 F.3d 871, 873–75 (8th Cir. 2000).
That case also shows you what “permitted by law” looks like when it’s real. The bounced-check fees passed because a Minnesota statute named them and capped them. That statute has since been renumbered, and today it says a service charge “not to exceed $30, may be imposed immediately on any dishonored check by the payee or holder of the check,” if notice of the charge was conspicuously displayed where the check was written. Minn. Stat. § 604.113, subd. 2(a). That’s a law permitting an amount. A statute that’s merely silent about phone payments isn’t.
Minnesota says it twice
Minnesota’s collection agency statute has its own version of the rule. A collection agency, debt buyer, or collector shall not:
(20) attempt to collect any amount, including any interest, fee, charge, or expense incidental to the charge-off obligation, from a debtor unless the amount is expressly authorized by the agreement creating the debt or is otherwise permitted by law;
— Minn. Stat. § 332.37(a)(20)
Clause (20) says “attempt to collect”, so my reading is that a collector that tries to charge you the fee has a problem under it whether or not you pay. The federal clause gets to the same place. That’s what Duffy held: letters demanding interest the law didn’t permit “were nonetheless an attempt to collect interest not permitted by law,” and that violated § 1692f(1). Duffy, 215 F.3d at 875. Different words, same answer.
Then there’s clause (12), which bars a licensee from violating “any of the provisions of the Fair Debt Collection Practices Act of 1977, Public Law 95-109, while attempting to collect on any account, bill or other indebtedness”. § 332.37(a)(12). So a pay-to-pay fee that violates § 1692f(1) is also a Minnesota licensing violation. I wrote about why clause (12) is the hinge of Minnesota’s collection statute, and why a collector worries more about its license than about a $1,000 federal claim.
I read all of sections 332.31 through 332.44 looking for anything that permits a fee for paying by phone, online, or by card. There isn’t one. The only fee provisions in that stretch are the state’s own license fees, clause (20) itself, and clause (21), which is about what an agency charges its client, not you.
Minnesota does have a statute that lets “[a] seller or lessor of goods or services” add a surcharge, capped at five percent of “the purchase price”, when a customer pays by credit card. Minn. Stat. § 325G.051, subd. 1(a). A collector may point to it. My reading is that it doesn’t fit. Paying an old debt isn’t buying goods or services, and the surcharge statute doesn’t touch a flat phone fee or a fee for paying by bank transfer at all. I haven’t found a court that’s decided whether it can count as “permitted by law” for a collector. I covered how that statute works for ordinary merchants in Minnesota’s credit card surcharge law.
Medical debt has a third copy of the rule. Except for “court costs for filing a civil action with the court and service of process,” a collecting party may not “attempt to collect any interest, fee, charge, or expense incidental to the charge-off obligation from a debtor unless the amount is expressly authorized by the agreement creating the medical debt or is otherwise permitted by law”. Minn. Stat. § 332C.02(16). A “collecting party” is “a party engaged in collecting medical debt”, § 332C.01, subd. 2, so that one can reach a provider collecting its own bill, too. It’s in what the Debt Fairness Act actually changed.
Who can still charge it?
The catch is a big one. These rules bind collectors. Not everyone who sends you a bill is one.
The federal act defines a “debt collector” as someone whose business has the principal purpose of collecting debts, or who “regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). It excludes anyone collecting a debt “which was originated by such person” and anyone collecting a debt “which was not in default at the time it was obtained by such person”. § 1692a(6)(F)(ii), (iii). Your phone company collecting its own bill isn’t a debt collector under that definition. Neither, usually, is a mortgage servicer that picked up your loan while you were current. That’s why both of the appellate fee cases had a twist in them. The Eleventh Circuit’s servicer took over loans that were already in default, and the Fourth Circuit’s case came in under a Maryland statute that reached any “collector”.
Minnesota’s statute has its own fence. It covers collection agencies (businesses collecting “for others”), debt buyers that purchase charged-off accounts, and the collectors who work for them. § 332.31, subds. 3, 6, 8. And it carves out, among others, “banks when collecting accounts owed to the banks and when the bank will sustain any loss arising from uncollectible accounts,” credit unions, insurance companies, and lawyers. § 332.32(a). Since 2026 it also leaves out a residential mortgage servicer licensed under chapter 58, or a student loan servicer licensed under chapter 58B, while it’s doing the work that license covers. § 332.32(c); 2026 Minn. Laws ch. 124, art. 1, § 57.
So the same $5 fee can slip past these statutes when your utility charges it and violate them when a collection agency collecting the utility’s charged-off accounts does. Same fee, same phone call, different law.
What can you do about a fee you already paid?
The federal remedy is the one with teeth. A debt collector that violates the act is liable for “any actual damage sustained”, plus “such additional damages as the court may allow, but not exceeding $1,000” in an individual case, plus costs and “a reasonable attorney’s fee as determined by the court” when the case succeeds. 15 U.S.C. § 1692k(a)(1), (2)(A), (3). The clock is short: suit must be brought “within one year from the date on which the violation occurs.” § 1692k(d). The way I read it, every fee charged is its own violation with its own date, so the oldest ones run out first.
There’s a defense, too. A collector isn’t liable if it shows the violation “was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” § 1692k(c). That defense is built for mistakes. My read is that a fee charged on purpose, every time, to everybody who pays by phone is a hard fit. But it’s the collector’s to raise.
The Minnesota statute works differently. Sections 332.31 to 332.44 don’t give you a damages claim of your own. They’re enforced through the license, by the commissioner of commerce, § 332.40, and by an injunction the attorney general or a county attorney may seek, § 332.39. Whether a § 332.37 violation can ride Minnesota’s private attorney general statute is an argument, not a given: § 8.31 reaches the state’s laws “respecting unfair, discriminatory, and other unlawful practices in business, commerce, or trade, and specifically, but not exclusively” a list of named acts. Minn. Stat. § 8.31, subds. 1, 3a. I laid out how that door works, and the catch that isn’t in the statute’s text, in Minnesota’s private attorney general statute.
And if the debt is old, be careful what the call is about. Minnesota law says a payment doesn’t revive an expired consumer-debt limitations period, but that’s not the only reason to think before you pay. I explained it in “never make a payment on an old debt”. If a debt buyer has already sued, it owes the court a specific package of proof before it gets a default judgment, including, if it asks for fees, interest, or charges on top of the charged-off balance, “a breakdown of any fees, interest, and charges added” to that amount. Minn. Stat. § 548.101(a)(4). I walked through the rest in the seven proofs a debt buyer owes the court.
A stamp costs less than five bucks. And nobody needs a statute to sell you one.
Madgett Law, LLC
Madgett Law, LLC represents Minnesota consumers in debt collection and credit reporting disputes, in state and federal court, including FDCPA claims against collectors who ignore these rules. More on that work is on our general litigation page. If a collector charged you to pay it, or a collection letter has numbers on it you can’t trace to anything you signed, send us a message.
Sources: 15 U.S.C. § 1692f (unfair or unconscionable means), para. (1) (unauthorized amounts); 15 U.S.C. § 1692a(6) (debt collector defined), (6)(F)(ii)–(iii) (originated debts; debts not in default when obtained); 15 U.S.C. § 1692k(a)(1), (a)(2)(A), (a)(3) (damages; $1,000 cap; fees), (c) (bona fide error), (d) (one-year limitation); 12 C.F.R. § 1006.22(b) (Regulation F; unauthorized amounts). Debt Collection Practices (Regulation F); Pay-to-Pay Fees, 87 Fed. Reg. 39733 (July 5, 2022). Interpretive Rules, Policy Statements, and Advisory Opinions; Withdrawal, 90 Fed. Reg. 20084 (May 12, 2025). Alexander v. Carrington Mortgage Services, LLC, 23 F.4th 370, 376–77 (4th Cir. 2022); Glover v. Ocwen Loan Servicing, LLC, No. 23-12578, slip op. at 3–4, 21–22 & n.14 (11th Cir. Feb. 4, 2025); Duffy v. Landberg, 215 F.3d 871, 873–75 (8th Cir. 2000). Minn. Stat. § 332.31, subds. 3, 6, 8 (collection agency; collector; debt buyer); § 332.32(a) (exclusions), (c) (licensed mortgage and student loan servicers; 2026 Minn. Laws ch. 124, art. 1, § 57); § 332.37(a)(12) (FDCPA violation), (a)(20) (unauthorized amounts), (a)(21) (fees to clients); § 332.39 (injunctions); § 332.40 (commissioner). Minn. Stat. § 548.101(a)(4) (breakdown of added fees on a debt-buyer default). Minn. Stat. § 541.053 (no revival by payment). Minn. Stat. § 604.113, subd. 2(a) (dishonored-check service charge). Minn. Stat. § 325G.051, subd. 1(a) (credit card surcharges). Minn. Stat. § 332C.01, subd. 2 (collecting party); § 332C.02(16) (medical debt; incidental fees). Minn. Stat. § 8.31, subds. 1, 3a (laws covered; private remedies). This article is general legal information about Minnesota and federal law. It is not legal advice, it does not create an attorney–client relationship, and no particular outcome is promised or implied.