Arvest Faces Class Action Over ‘Pay-to-Pay’ Fees for Online, By-Phone Mortgage Payments

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Out of Arkansas federal court comes a proposed class action filed by a consumer who claims mortgage servicer Arvest Central Mortgage Co. charged unlawful “pay-to-pay” fees for online and over-the-phone mortgage payments.

According to the lawsuit, Arvest charges $10 for payments made by phone with a customer service representative and $5 for both online payments and over-the-phone Interactive Voice Response (IVR) payments. These costs, the case alleges, “far exceeded” the cost to Arvest of providing such services, which the suit claims is closer to $0.50. Under Texas law, the mortgage servicer is not permitted to mark up the amount it pays to third parties to provide services to borrowers and thereby “create a profit center for itself,” the lawsuit says.

“Arvest services mortgages throughout the United States and is supposed to be compensated out of the interest paid on each borrower’s monthly payment—not via additional ‘service’ fees that do not reflect the cost to Arvest of providing such services,” the complaint reads.

The case further alleges that Arvest’s “pay-to-pay” fees are not expressly authorized by borrowers’ deeds of trust and are therefore prohibited under Texas debt collection law, which states that debt collectors are not permitted to charge fees that are not expressly authorized by the agreement creating the debt.

The plaintiff seeks to represent “thousands” of similarly situated individuals who paid a fee to Arvest for a mortgage payment made by phone, IVR, or the internet in connection with a residential mortgage loan securing a property in Texas.