Class Action Says Ally Financial Charges Unlawful ‘Pay-to-Pay’ Fees for Payments Made Online, By Phone

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A proposed class action out of West Virginia claims Ally Financial, Inc. has “routinely” collected unlawful payment processing fees from borrowers who make monthly auto loan payments online or by phone.

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The 10-page lawsuit says the company, which finances auto loans, “plainly” violates state law and its contractual agreements with borrowers when it charges a “pay-to-pay” fee of up to $4 each time a consumer uses online or telephone payment processing systems to make a payment.

According to the suit, there is no West Virginia statute or provision in the terms of Ally’s contracts with borrowers that authorizes it to collect such pay-to-pay fees.

What’s more, the case shares that Ally’s pay-to-pay fees cost over 1300 percent more than the typical charge a lender pays to process such transactions—usually $.30 or less per payment.

The plaintiff, a West Virginia resident, says he entered into a contract in October 2022 to buy a used 2015 Ford Expedition from a dealer who assigned the purchase and financing to Ally. As the complaint tells it, the defendant charged the man a $4 fee for making a loan payment over the phone and $3.50 for making a loan payment online.

By assessing these fees, Ally has used “unfair” and unreasonable means to collect a debt from the plaintiff in violation of state law, the filing alleges.

The lawsuit looks to represent anyone with an automobile loan securing a vehicle in West Virginia where the lender or assignee is Ally, who paid a fee to the defendant for making a loan payment online or by phone or other electronic means during the applicable statute of limitations period.

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