Bank of America Charges West Virginia Borrowers Illegal ‘Pay-to-Pay’ Fees, Class Action Says

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A proposed class action lawsuit claims Bank of America has collected unlawful payment processing fees from borrowers who make monthly mortgage payments online or by phone.

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The 11-page lawsuit says that as a mortgage lender and servicer, Bank of America has “routinely” violated state law and borrowers’ mortgage contracts by charging West Virginia consumers illegal “pay-to-pay” fees.

“[Despite] its uniform contractual obligations to charge only fees explicitly allowed under the mortgage and applicable law, [Bank of America] leverages its position of power over homeowners and demands exorbitant Pay-to-Pay Fees,” the suit contends.

Although it charges borrowers a fee of $6 or more when they make a payment online or over the telephone, Bank of America typically pays only $.50 or less to process each transaction, the case explains. As the complaint tells it, the bank “passes along its transaction costs to borrowers” and “pockets the difference as profit.”

Per the filing, such fees are not authorized by borrowers’ deeds of trust, nor permitted under West Virginia law. In short, “[there] is no statute that authorizes Bank of America to collect Pay-to-Pay fees,” the lawsuit emphasizes.

The plaintiff, a West Virginia resident who entered into a $20,000 loan agreement in 1998, has been charged a $6 fee by Bank of America each time she’s made a mortgage payment by phone, the case relays. In addition, the plaintiff was charged a total of $47.01 in unexplained fees in 2020, which may include unlawful pay-to-pay fees and other unauthorized charges, the complaint says.

The lawsuit looks to represent anyone with a residential mortgage loan on a property in West Virginia whose servicer is Bank of America and who paid a fee to the bank for making a payment by telephone or electronic means during the applicable statute of limitations period.

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