A federal judge in California has ruled that individuals paying a voluntary transaction fee is sufficient to cover the “concrete” injury standing required to file a lawsuit in federal court.
The plaintiffs have filed a class-action lawsuit against Santander Consumer USA regarding transaction fees that were paid when making payments via Western Union’s Speedpay service.
The ruling was first reported by Blank Rome.
The plaintiffs voluntary paid a $10.95 transaction fee when making a payment via Speedpay. While the loan contract did not detail the transaction fee, the plaintiffs knew that they had other means by which to make payments which would not have incurred an additional fee. The plaintiffs used the Speedpay service when they were behind on their payments to avoid late fees and having their vehicle repossessed. The plaintiffs used the service on about 40 of the 65 payments they made before the vehicle was ultimately repossessed.
Santander kept a portion of the transaction fee every time a payment was made using Speedpay. The plaintiffs are alleging this is a violation of the Rosenthal Fair Debt Collection Practices Act, a California state law that mirrors the federal FDCPA.
Santander had moved for summary judgment alleging that the plaintiffs suffered no concrete injury and agreed to the fee when they used the Speedpay service.
Under Spokeo v. Robins, an individual must prove he or she suffered a “concrete” injury in order to be eligible to file a lawsuit in federal court.
By repeatedly collecting on an unlawful fee, the judge ruled that the plaintiffs had suffered a concrete injury. The judge also ruled that knowingly paying the Speedpay fee did not satisfy the requirements of an oral modification of the original loan contract.
From Blank Rome:
Debt collectors should revisit their practices to ensure that they are not retaining any fees incidental to the collection of a debt unless the fee is expressly provided for in the underlying contract. Even in situations where the debt collector makes no-fee alternatives available to the debtor, the debtor’s election to pay by a method in which a transaction fee is charged, can place the debt collector in violation of both 15 U.S.C.1692f(1) and the Rosenthal Act
