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LoanCare Pay-to-Pay Fees for Home Mortgages Class Action

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The Fair Debt Collection Practices Act (FDCPA) regulates the activities of third-party collectors of consumer debts, in order to prevent abuse and other misdeeds. The complaint for this class action brings suit under the FDCPA, alleging that LoanCare, LLC charges customers illegal processing fees when they pay their mortgages online or by telephone. 

The complaint alleges that the illegal fees charged by LoanCare range from $5 to $15. 

Why are such fees illegal? The complaint claims that the FDCPA forbids LoanCare from collection any additional amounts from borrowers unless that amount “is explicitly stated in the agreement creating the debt or permitted by law. … But Pay-to-Pay Fees are found nowhere in the Uniform Mortgages and are not permitted by debt collection law.” 

The complaint alleges LoanCare “leverages its position of power over homeowners and demands exorbitant Pay-to-Pay Fees. Even if some fee were allowed, the mortgage uniform covenants and applicable law only allow LoanCare to pass along the actual costs of fees incurred to it by the borrowers—here, only a few cents per transactions.”

Examples of these fees are given by the plaintiffs. 

  • Plaintiff Tristan Tanner owns a home in St. Petersburg, Florida, with a mortgage that is service by LoanCare. Around December 15, 2017 and June 29, 2018, LoanCare charged Tanner a $12 fee for making a payment over the phone. They also charged him a $15 fee in March, June, and August 2018 when he paid over the phone. 
  • Plaintiff Stephanie Augustin owns property in Zephyrhills, Florida. The mortgage on the property is serviced by LoanCare. She makes her payments online, and each time is charged a $10 fee.
  • Plaintiff Shirley McNeely has a property in Ocala, Florida, the mortgage for which was also serviced by LoanCare. During the term of the mortgage, she made payments online, and LoanCare charged her $5 for each one. 
  • Finally, Plaintiff Tiera Holmes lives in Louisiana. When she makes payments to LoanCare over the phone, LoanCare charges her an extra fee. Most recently, it was a $15 fee, in April 2019. 

The complaint alleges violations of the FDCPA and two Florida laws, the Florida Consumer Collection Practices Act (FCCPA) and Florida Deceptive and Unfair Trade Practices Act (FDUTPA).

Three classes have been defined for this action.

  • The Nationwide FDCPA Class is all persons who were borrowers of residential loans not owned by LoanCare, to which LoanCare acquired servicing rights when they were thirty day or more delinquent on payments, and who paid a fee to LoanCare for making a payment by phone, online, or via an Interactive Voice Response System (IVR), during the statutes of limitatioms.
  • The Florida and Lousiana State Classes are all persons with an address in the respective state who were borrowers on a residential mortgage loan for which LoanCare acquired servicing rights, who paid such a fee.
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