In Shami v. National Enterprise Systems, 2010 WL 3824151 (E.D.N.Y. 2010), Judge Mauskopf concluded that a debt collector’s addition of an optional fee for payment by telephone potentially violated the FDCPA.  The letter stated, in part:


You can now pay by automated phone system … or on the internet. Transaction fees will be charged if you use the automated phone system or the internet to make payment on this account. You are not re-quired to use the automated phone system or the internet to make payment on this account.


Judge Mauskopf held that the FDCPA means what it says:  the FDCPA prohibits a debt collector from collecting any service charge ‘unless such amount is expressly authorized by the agreement creating the debt or permitted by law.


Therefore, ¶  “[u]nder the FDCPA, [a debt collector] may impose a service charge if (i) the customer expressly agrees to the charge in the contract creating the debt or (ii) the charge is permitted by law … In other words, . . . If state law expressly permits service charges, a service charge may be imposed even if the contract is silent on the matter; . . . If state law expressly prohibits services charges, a service charge cannot be imposed even if the con-tract allows it; . . . If state law neither affirmatively permits nor expressly prohibits service charges, a service charge can be imposed only if the customer expressly agrees to it in the contract.” Id. at 13 (citations omitted).    In this case, Defendant does not assert that the transaction fees described in the Collection Letter were expressly authorized by the underlying agreement creating the debt; nor does Defendant assert that these fees are otherwise permitted by New York law. Defendant contends instead that § 1692f(1) itself is inapplicable because the phone and online methods of payment are optional.    In the absence of direct support from the Second Circuit Court of Appeals or guidance from district courts in this Circuit, Defendant principally relies an unpublished opinion from the Central District of Illinois. See Mann v. Nat’l Ass’n Mgmt. Enters., Inc., No. 04-1304 (C.D.Ill. Feb. 23, 2005). In Mann, a debt collector sent the plaintiff two collection letters offering to settle outstanding credit card debt. See slip op. at 1. The letters stated, in relevant part:  If you have elected to make payments via our “check by phone” system, our office charges a convenience fee of $7.50 per transaction for this service. This fee is in addition to your actual payment and the fee will not be credited to your outstanding balance.”  Id. at 2. The court observed that “the check-by-phone method of payment is presented as an option and the amount of the fee for the service is disclosed.” Id. The court opined that “consumer harm seems nonexistent” and that a consumer “might actually want to pay for the check-by-phone option.” Id. at 2-3. Specifically addressing Plaintiff’s § 1692f(1) claim, the court relied on Lewis v. ACB Bus. Servs., Inc., 911 F.Supp. 290 (S.D.Ohio 1996), and Lee v. Main Accounts, Inc., 125 F.3d 855 (6th Cir.1997) and, concluding that it was unclear that the optional payment method constituted a collection within the meaning of the FDCPA, dismissed the plaintiff’s § 1692f(1) claim. Id. at 4. However, for the reasons set forth below, the Court finds Mann’s reliance on the cases noted above misplaced and declines to adopt that court’s ultimate conclusion.     In Lewis, the court reasoned that a payment option that imposed a processing fee in the event the debtor opted to make payment with an American Express moneygram did not violate § 1692f(1) because the debt collector itself would not receive any portion of the processing fee. See Lewis, 911 F.Supp. at 293-94. (“[Plaintiff’s] claims were dismissed because the uncontradicted evidence proved that any such fee, voluntarily chosen by the debtor if he or she chose this payment option, would not be paid to [defendant/debt collector] or any entity it controlled and was a standard fee charged by the processor of the payment, an independent entity.”) (emphasis added).    Similarly, in Lee, the court found that a five-percent “transaction fee” noted in a collection letter did not violate § 1692f(1) because the fee itself was imposed and collected by a third-party credit card processing company; thus, the debt collector itself did not receive any additional compensation in the event that the debtor voluntarily availed herself of the option to pay the debt with a credit card. See Lee, 125 F.3d at 855. (“[T]he five-percent transaction fee mentioned in the letter is not a fee collected by [the debt collec-tor], but a third-party charge triggered when the debtor chose the option of paying by credit card … and [the debt collector] would not have received any additional compensation from the credit card fee.”) (emphasis added).    By contrast, in Longo v. Law Office of Gerald E. Moore & Assocs. ., P.C., No. 04 C 5759 (N.D.Ill. Feb.3, 2005), another unpublished case cited by Defendant, the court found that a collection letter offering the debtor the option of paying the debt by phone for a $7.50 fee violated § 1692f(1) because the fee was “incidental” to the underlying debt. See slip op. at 8. The court noted that the FDCPA does not specifically state how “incidental” a fee must be to fall outside its scope, but concluded that the liberal construction afforded the statute warranted that the fee be considered incidental to the claimed debt. Id. The court further noted that the collection letter at issue in that case did not list any other payment options and was geared “toward handling payment of the debt over the telephone.” Id.    The Court concludes that Plaintiff has stated a claim under § 1692f(1). The court in Longo rested its decision on the FDCPA’s prohibition on the collec-tion of any fee in excess of the underlying debt unless authorized by prior agreement or state law. Likewise, this Court concludes that the fees outlined in the Col-lection Letter at issue, like the pay-by-phone fees discussed in Longo, are incidental to Plaintiff’s purported actual debt.