Empereon-Constar Employees Hold Food Drive for St. Mary’s Food Bank Alliance

PHOENIX, Ariz. – Empereon-Constar employees recently held a holiday food drive to help feed local families. This event was a joint effort between Empereon-Constar’s three Phoenix locations to support St. Mary’s Food Bank Alliance with a collection drive before the holidays.  

Empereon-Constar employees collected a total of 2,692 pounds of food, which equates to 2,243 meals that St. Mary’s Food Bank Alliance will be able to provide to members of the Phoenix community. The food drive was an opportunity for employees to give back to the community and support those in need. 

“Empereon-Constar is grateful to our employees for their generous donations to St. Mary’s Food Bank Alliance,” said Martha Hewitt, Enterprise Administration, Empereon-Constar. “To go to bed hungry or wake up hungry is something no child should ever experience. With our continued support and contribution our family, neighbors and friends will not have to experience hunger.” 

In Maricopa County, 82,000 households face chronic hunger each day and, across the state, 1 in 4 children, 1 in 6 Arizonans, and 1 in 7 seniors struggle to find enough food to eat. In response to this need, St. Mary’s partners with nearly 500 nonprofits to distribute food in 13 Arizona counties – including two-thirds of Maricopa County and all of Northern Arizona. 

“Giving back is part of who we are at Empereon-Constar,” said Travis Bowley, CEO, Empereon-Constar. “We are strongly committed to strengthening the communities where we live and work and deeply appreciate the contributions our employees make to organizations like St. Mary’s Food Bank.”

About Empereon-Constar

Empereon-Constar is a leading business process outsourcing company providing end-to-end customer engagement and customer management solutions for New Sales Account Generation, Customer Care, Risk and Fraud Operations, Collections Operations, QA Agent Call Monitoring, Back Office Administration Support, and Tech Support across the entire customer account lifecycle. Our customized solutions, real-time analytics, and global footprint help our clients achieve their business goals. 

Empereon-Constar’s full range of consumer and commercial services includes: lead generation, inbound / outbound sales, account origination, customer care, customer service, technical support, first party collections, recovery collections, credit bureau dispute management, fraud risk management, anti-money laundering, loan servicing and loan processing. Our world-class services and unique global strategy allows us to meet the needs of our client partners across multichannel (email, chat, phone) communication platforms, provide exceptional customer experiences, and consistently deliver world-class performance results, while maintaining the highest level of data security and compliance. For more information, please visit us online at www.empereon-constar.com or www.linkedin.com/company/22345663

Empereon-Constar portfolio of companies: Empereon Marketing, LLC, Constar Financial Services, LLC, Empereon International, Constar International, and HQC International.

Empereon-Constar Employees Hold Food Drive for St. Mary’s Food Bank Alliance

Bringing Common Sense to Collections

By the stroke of a pen in Kraus v. Professional Bureau of Collections of Maryland, Inc., Case 17-CV-3402 (E.D.N.Y. November 27, 2017), a senior judge presiding over the U.S. District Court for the Eastern District of New York, I. Leo Glasser, recently brought common sense to the application of the Fair Debt Collection Practice Act (“FDCPA” or “Act” or “Statute”), a federal law that governs collections. The FDCPA was enacted by Congress to provide consumer debtors with a shield against unscrupulous practices of debt collectors, and not to hand debtors a sword that can be used to obtain relief from debts that they have incurred. Unfortunately, many debtors, their counsel, and courts have strayed far from that Congressional purpose, and too often the Statute has been put to illegitimate use. Now this senior federal judge has called out the misuse and abuse of the Statute and denied relief to a debtor whose only apparent reason for bringing a FDCPA claim was to avoid payment of a just debt.

[Editor’s note: insideARM previously published this article, by Katie Neill, of ARS National, about the Kraus case. This post by Jeffrey Schreiber offers additional relevant background and commentary.]

Legislative history of the FDCPA

Effective March of 1978, the FDCPA, 15 U.S.C. 1692, et seq., was enacted by Congress. Prior to its enactment, Congress found that “debt collection abuse by third party debt collectors [was] a widespread and serious national problem.” S. Rep. 95-382, at 2 (1977) reprinted in 1977 U.S.C.C.A.N. 1695, 1696. The purpose of the Statute is to “protect consumers from unfair, harassing, and deceptive debt collection practices without imposing unnecessary restrictions on ethical debt collectors.supra. Unfortunately, by interpretation, various courts have expanded the Statute inconsistent with the spirit, if not the letter, of its legislative history. 

The declared purpose of the Statute was “to eliminate abusive debt collection practices,” while also ensuring that compliant debt collectors “are not competitively disadvantaged.”  15 U.S.C. section 1692e. Collection abuse takes many forms, including the use of obscene or profane language, threats of violence, telephone calls at unreasonable hours, misrepresentation of a consumer’s legal rights, disclosing a consumer’s personal affairs to friends, neighbors, or an employer, obtaining information about a consumer through false pretense, impersonating public officials and attorneys, and simulating legal process 15 U.S.C. 1692e.  The Act prohibits these and other harassing, deceptive, and unfair debt collection practices.


The Committee viewed the Act as “self-enforcing” meaning that consumers, who have been subjected to collection abuses, will be enforcing compliance.  A debt collector who violates the Act is liable for actual damages as well as any additional damages the court deems appropriate, not exceeding $1,000, plus attorney fees.  The Statute provides that the court must take into account the nature of the violation, the degree of willfulness, and the debt collector’s persistence. By doing so, one can only conclude that Congress wanted Courts to consider both aggravating and mitigating circumstances.  On the other hand, a debt collector has no liability if he violates the act in any manner when a violation is unintentional and occurred despite procedures designed to avoid such violations. Congress was even handed.  It recognized that not every situation is black or white but that grey areas exist.  Consequently, based upon the legislative history, Congress did not intend the FDCPA to be a strict liability statute even though Courts have interpreted it otherwise.

Some judges have expanded the statute, sometimes inconsistent with the Act’s legislative history. An example of such an expansion is the adoption of the so-called “least sophisticated debtor” standard.  The FDCPA does not establish this standard.  Rather, it is silent. Instead, the Ninth Circuit Court of Appeals decided that, when evaluating whether language may be deceptive, “the court should look not to the most sophisticated readers but to the least.” Baker v. G.C. Servs. Corp., 677 F.2d 775 (9th Cir. 1982).  The court concluded that “the FDCPA does not ask the subjective question of whether an individual plaintiff was actually misled by a communication.  Rather, it asks the objective question of whether the hypothetical least sophisticated debtor would likely have been misled.  If the least sophisticated debtor would likely be misled by a communication from a debt collector, the debt collector has violated the Act.” Guerrero v. RJM Acquisitions LLC, 499 F.3d 926,934 (9th Cir. 2007) (emphasis added).  Hence, the least sophisticated debtor standard was born. The concept is not grounded in either the Act or its legislative history. Nevertheless, most other courts have followed the Ninth Circuit, in determining whether there has been a violation of section 1692e(1)-(16).             

There are cases against lawyers for violation of the FDCPA for mailing a validation letter that is either allegedly confusing and/or does not meet the least sophisticated consumer test. See Caprio v. Healthcare Revenue Recovery Group, LLC, 709 F.3d 142 (3d Cir, 2013); Graziano and Wilson v. Quadramed Corp., 225 F.3d 350 (3d Cir. 2000); Smith v. Computer Credit, Inc., 167 F.3d 1052 (6th Cir. 1999); Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir. 1996). There are cases proscribing a debt collector from collecting interest and fees on an unpaid balance when it is not disclosed that the balance may increase accordingly. Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016); Miller v. McCalla, Raymer Padrick, Cobb, Nichols and Clark, LLC, 214 F.3d 872 (7th Cir. 2000).  

There are those in which a FDCPA violation is alleged in “reverse Avila” cases; that is, the debt collector’s failure to disclose that prejudgment interest may be owed by the consumer. See Altieri v. Overton, Russell, Doerr, and Donovan, LLP (2017 WL 5508372); Cruz, v. Credit Control Services, Inc., 2017 WL 5195225 (E.D.N.Y. Nov. 8, 2017); Bird v. Pressler & Pressler, L.L.P., 2013 WL 2316601 (E.D.N.Y. May 28, 2013).  

There are even alleged FDCPA violations litigated because a mailing barcode, account number, partial account number, or an account number embedded in a barcode, are visible through a glassine mailing envelope. To that end, courts have debated whether there exists a “benign language exception” to 15 U.S.C. section 1692f(8), another concept fabricated by the courts.  Courts have gone both ways. See Anekova v. Van Ru Credit Corporation, et al., 201 F.Supp.3d 631 (E.D. Pa 2016); Douglass v. Convergent Outsourcing, Inc., 765 F. 3d 299 (3d Cir. 2014); Kostik v. ARS National Services, Inc., 2015 WL 4478765 (M.D. Pa July 22, 2015). 

How far have we strayed from Congress’ intent to protect consumers from “unfair, harassing, and deceptive debt collection practices without imposing unnecessary restrictions on ethical debt collectors?” How have consumers been injured by some of these seemingly technical, if not picayune, issues raised by consumer attorneys? Who has benefited most from these cases—the plaintiffs or plaintiffs’ attorneys? Judge Glasser answers these questions. The following are excerpts from his decision.

Kraus, et. al. v. Professional Bureau of Collections of Maryland, Inc.

Plaintiff, Kraus (“Kraus” or “Plaintiff”) claimed Defendant, Professional Bureau of Collections of Maryland, Inc. (“PBCM” or “Defendant”) violated 15 U.S.C. section 1692e by sending her an offer to settle her debt for 40% of her account balance. The letter provided the amount owed on her account. It, however, did not state that the account balance might increase due to interest or other charges if not timely paid. In Avila, the Second Circuit held that a debt collector violates section 1692e if it notifies a consumer that an unpaid account balance may increase due to interest and fees if not timely paid. Avila, however, also provides a safe harbor for a debt collector who fails to disclose that interest or other charges may increase the outstanding balance. A letter that contains language stating “that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date” is exempt. So, the issue before the Kraus court was whether Avila applied to the letter and, if so, whether the settlement offer in the letter brought Defendant within the safe harbor of Avila. The Kraus Court found that Avila applied to the letter but that the letter fell within the safe harbor. 

Judge Glasser questioned what the alleged harm was in this case. He observed that tort law, for example, teaches the violation of a statute will subject the violator to liability if the person harmed is a member of a class the statute was designed to protect, and the harm complained of is the harm the statute was designed to prevent. As to harm, the Statute’s enacted purpose was to eliminate abusive debt collection practices. See 15 U.S.C. section 1692e; S. Rep. 95-382, at 2 (1977). The judge rhetorically asks,

“Where is the abuse here? The court sees none.”

At oral argument, the judge asked Ms. Kraus’ lawyer why her client brought this case? Her lawyer responded because she is in financial distress. Kraus did not seek an attorney because she felt abused, deceived, or otherwise aggrieved. Rather, she did so because she wanted help getting out of debt. Judge Glasser firmly stated that “the FDCPA is not a debt-relief statute and courts should not indulge thinly veiled attempts to use it as one.” Id. at 14.  He wrote:

Sadly, abuse of the statute is unsurprising given the development of the law in this area, and the Court suspects such abuse is fairly widespread.  In 2006, the Court observed that the interaction of the least sophisticated consumer standard with the presumption that the FDCPA imposes strict liability has led to a proliferation of litigation in this district…Since then, the number of FDCPA cases filed yearly in this District has more than quintupled.  And small wonder, when all required of a plaintiff is that he plausibly allege a collection notice is “open to more than one reasonable interpretation, at least one of which is inaccurate. Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993).  This standard prohibits not only abuse but also imprecise language, and it has turned FDCPA litigation into a glorified game of “gotcha,” with a cottage industry of plaintiffs’ lawyers filing suits over fantasy harms the statute was never intended to prevent.  With Avila, the circuit’s FDCPA jurisprudence lurches to ever more plaintiff-friendly terrain.  Kraus, supra at 14-15 (emphasis supplied).     

Judge Glasser questioned whether these cases describe genuine instances of debt collection abuse.  He is concerned that debt evasion is being facilitated for the purpose of increasing profits among the plaintiffs’ bar. Kraus supra at 18. Congress intended that the FDCPA would provide a shield against the overly zealous debt collector. By carrying the least sophisticated debtor standard and strict liability concepts to illogical extremes, “Courts have fashioned this shield into a sword” inconsistent with the Congressional intent of the Statute. Id.


For decades since the FDCPA’s enactment, federal courts have bent, distorted, contorted, misinterpreted and otherwise mischaracterized the statute, usually for the benefit of the consumer, even where no measurable damage has been sustained. This is, among other reasons, why the Kraus case is an oasis in a desert of federal cases finding the defendant debt collector liable for an alleged (if not dubious) FDCPA violation even where the debtor has not sustained any injury. Maybe the Kraus case signals the pendulum swinging toward a more common sense, judicial interpretation of the Statute consistent with Congress’ intent. Hopefully, hereafter, courts will apply the FDCPA to serious abuses in accordance with Congress’ intent and dismiss specious or implausible cases. At a minimum, plaintiffs with ulterior motives, such as seeking debt relief by suing under the FDCPA, should no longer be tolerated.

Bringing Common Sense to Collections

IACC Member Survey Reveals Chief Concerns for 2018

MINNEAPOLIS, Minn. — A recent survey of International Association of Commercial Collectors’ (IACC) members reveals finding new clients to be a chief concern, followed by the impact of the economy and new regulations, but for most the outlook is bright for 2018. 

Problems that keep me up at night

For all business owners — and supervisors for that matter — there are always problems, headaches and concerns to deal with. A recent survey of members of the IACC showed the one issue of most concern – that “keeps them up at night” – is finding new clients.

Survey respondents were asked to respond to different issues based on three categories: Client Cultivation, Angst over the Unexpected, and Recruitment & Retention. They responded to questions based on whether the given issue “most concerned them,” making them toss and turn at night; “occasionally concerned them,” bothering them but not on a consistent basis; or was simply “not a problem.” There was also a “not applicable” response.

For the “Most Concerned” category, an overwhelming 51.56% of the 64 respondents said that finding new clients kept them up at night, followed by 21.88% saying the economy and its impact on commercial collections was a major concern. Regulations that could make the job more difficult was a major concern to 18.75% of those who responded to the survey. 

Issues that are of concern but not all the time

Of the respondents ranking issues that were occasional concerns, though not consistent ones, 62.5% said the impact of the economy was a concern, and, interestingly, there was a three-way tie – at 57.81% — between respondents indicating that regulations which could make the job more difficult, managing unreasonable client expectations, and training staff to succeed were occasional yet inconsistent concerns for them.

No problem at all

Issues that did not seem to concern survey respondents included keeping headhunters away from a business’ top collectors (68.75%), the impact of bitcoins on commercial collections (57.81%), and concerns that bad publicity could befall the organization or the commercial collections industry in general (45.31%). 

But what else do you worry about?

When asked, “What else keeps you up at night?”, in addition to the specific responses included in the survey, respondents’ answers largely had to do with the topics of clients, regulations, staffing and the legal aspect of the business. Though a few responded that old age and a snoring dog were primary concerns.

One respondent replied, “We do have some clients that delay our fee payments for a very long time and we have communication problems that make it difficult to make our clients understand the legal procedures in different countries.”

Dealing with demanding clients, maintaining the existing client base, and finding and cultivating quality clients that move the growth curve were other issues raised by survey respondents. New regulations, and concern over the current regulatory climate and practices and their effect on commercial collection businesses were also mentioned numerous times.

Regarding the legal aspect of the commercial collections field, one respondent called out debtor lawyers and lawyers looking to take advantage of the system, as well as poor administration in the courts and unreasonable opposing counsel as major issues within the industry.

One respondent wrote, “For the last 20 years, agencies have beaten each other up with rates, and the resulting rate pressure created by agency sales representatives’ desire to land an account leads to regular reductions in the rates offered by attorneys.

“Seriously, how much longer can quality law firms stay in business with rates on commercial claims averaging below 20%? And who started the trend of sending out claims at the same rate no matter where the law firm is located?” the respondent continued.

In addition, respondents said that having “staff that never seems contented,” hiring “top flight talent,” and not having enough time for staff to process files as quickly as necessary were regular concerns as well. 

Over 45% of respondents have been commercial collection professionals for more than 30 years while only 4.69% have been in the industry for between one and five years. Members of IACC for over 30 years were 9.52%, while 25.4% have worked in the field for between one and five years and between five and 10 years.

Benefits of IACC membership that members listed most often included networking opportunities,  collector and agency certifications, and keeping staff focused through the seminars they provide.

One respondent wrote, “IACC keeps me informed on current trends and in touch with our competition, which is very helpful since IACC members are so honest with each other.” 

Perhaps the most striking – and best – news to come out of the survey was that looking forward to 2018, 59.38% of respondents expect their business to increase while only 1.56% said they thought business would decrease in 2018. 

About IACC

The International Association of Commercial Collectors, Inc. (IACC) is an international trade association comprised of more than 350 commercial collection agencies, attorneys, law lists and vendors. With members throughout the U.S. and in 25 international countries, IACC is the largest organization of commercial collection specialists in the world. The IACC contributes to the growth and profitability of its members by delivering essential educational and professional tools and services in a highly collaborative and participatory environment. For more information, visit www.commercialcollector.com.

IACC Member Survey Reveals Chief Concerns for 2018

MRS BPO, LLC Acquires Alabama-based Vantage Sourcing

CHERRY HILL, N.J. — New Jersey-based debt collection agency MRS BPO, LLC, one of the country’s premiere accounts receivable management firms, announced that it has acquired Vantage Sourcing, a call center company focused in collections and customer service, located in Dothan County, Alabama. The purchase will enable MRS continue to expand through additional seat capacity and new client vertical industries. 

“Acquiring a quality organization like Vantage helps to forward our growth objectives and offer additional services,” said Chief Customer / Growth Officer Chris Repholz. “The integration of the two companies will begin immediately and clients of both companies will continue to receive the great quality and results to which they’re accustomed.” 

Vantage Sourcing was founded in 2004 by Scott Stanford and Derrick Willman and has been an active employer in Dothan since that time. “The Dothan area has a population that is eager for full time jobs which offer benefits and advancement opportunities,” commented Co-CEOs Saul and Jeff Freedman. “Our intention is to become an employer of choice in the area and we greatly look forward to making a positive impact in the community.” 

The acquisition provides MRS with a third domestic contact center location with 200+ seats and customer service clients that complement its collections business. “We are very excited about Vantage Sourcing becoming part of the MRS family,” said Vantage CEO Scott Stanford. “We have similar cultures and I know that Dothan is going to appreciate the new jobs and career growth that MRS will bring as part of this acquisition.” 


MRS BPO, LLC is a full service accounts receivable management firm headquartered in Cherry Hill, New Jersey. The company’s unique combination of experience, technology, and compliance management processes allows them to provide industry-leading debt recovery solutions while enhancing their client’s brand and reputation. For more information on MRS BPO, LLC, visit them online at www.mrsbpo.com.

MRS BPO, LLC Acquires Alabama-based Vantage Sourcing

Mulvaney Updates CFPB Mission

Just before the holidays, as a federal judge heard arguments about whether Leandra English or Mick Mulvaney should be the interim leader of the Consumer Financial Protection Bureau (that case is still pending), Acting Director Mulvaney officially changed the Bureau’s mission statement.

Here’s what it was under Director Cordray:

“The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.”

Here’s what it is now:

“The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives.” (emphasis added)

What’s new here is the concept of identifying unnecessary or burdensome regulations — one we’ve heard from President Trump in his earliest days in office — and a change in enforcement focus from CFPB rules to “federal consumer financial law.”  Oh, and the word “fair” was removed.

This change has of course made CFPB proponents, including the Bureau’s founder Sen. Elizabeth Warren, apoplectic

Meanwhile, in other recent developments that are unpopular with former CFPB proponents, Acting Director Mulvaney has: 

  • Announced new staff additions — several of them on loan from his other place of work, the Office of Management and Budget.
  • Abandoned the planned consumer debt collection disclosure survey.
  • Announced that the Bureau does not intend to assess penalties for errors in data collected in 2018, and plans to reconsider aspects of the Mortgage Data Rule.
  • Announced that the Bureau expects to issue a final rule amending certain aspects of its 2016 rule governing prepaid accounts soon after the new year.

insideARM Perspective

Some have speculated that the leadership change at the CFPB might mean that debt collection rules will never see the light of day. I’m not so sure I agree with that. There has certainly been a delay. However if the new mission to “identify and address outdated… regulations” applies to any industry, it is tailor-made for debt collection. With a law enacted in the 1970’s and a mass of conflicting court decisions, rules governing this industry need to be simpified, clarified, and modernized.

Mulvaney Updates CFPB Mission

The Affiliated Group Changes Name to The CMI Group

CARROLLTON, Texas — The Affiliated Group (TAG), based in Rochester, Minnesota, has officially changed its name to The CMI Group (CMI) effective January 1, 2018. With this change, TAG consolidates into CMI and its operating subsidiaries. CMI acquired TAG in November 2014, making it a wholly-owned subsidiary. Since that time, TAG has maintained its name, commitment to regulatory compliance, and strong performance for its customers.

CMI continues to execute its vision of an integrated organization that drives shareholder value and delivers optimal service to the verticals and customers it serves.

The Rochester, MN office continues its operations and anticipates no changes. 

About The CMI Group

CMI is a full-service receivable management firm providing leading-edge solutions to customers nationwide. Through its subsidiaries, CMI delivers innovative revenue cycle, accounts receivable management, and BPO solutions resulting in enhanced operational efficiency and increased revenue for its customers. Founded in 1985 and serving a multitude of industries, CMI has headquarters in Carrollton, TX, with satellite offices in Dallas and Rochester, MN. For more information, visit www.thecmigroup.com.

The Affiliated Group Changes Name to The CMI Group

Integrated Vendor Partnership Helps Hospitals Manage Patient Self-Pay Challenge

The following is a discussion I had with Manoj Chabra, CEO, DCS Global and Ed Caldwell, Chief Revenue Officer at CarePayment about the integrated vendor partnership they began in 2017, and how they are helping healthcare revenue cycle professionals adapt to the new patient (or self)-pay dynamic.

The partnership between CarePayment and DCS: What does it say about the self-pay crisis?

It says the self-pay healthcare crisis isn’t on a trajectory to improve, and any serious effort to change that trajectory is going to require focus. Everyone has skin in the game, especially hospitals and physician practices that are facing disappearing margins.

If more people lose healthcare, the problem is only going to get worse. In any event, we think the right focus is patient engagement. It’s proactive, it’s positive, and it empowers patients by educating them on their choices. It ultimately makes them loyal patients, and repeat patients. Satisfied patients tend to figure out a way to pay their bills.

Has behavioral science played a role in your business model?

You can’t understand the healthcare revenue cycle without taking human behavior into your calculus. Only recently has anyone had the data to back up what we’ve known anecdotally for a long time: Getting people to make payment arrangements is a matter of driving the right conversations, to the right patients, at the right time.

Will vendor fatigue keep healthcare providers from offering patients more ways to pay for healthcare?

From a provider perspective, having one vendor figure out a patient’s propensity to pay at the top of the rev cycle, and then having a different vendor, if any, step into the patient financing and collections portion of the lifecycle—it’s a lot to manage. Providers want end-to-end help with patient financial matters. They’re clinicians, and for them, vendor fatigue is very real.

The hospital systems probably have no choice; to stay open, they’ll all have to think about how they’re going to offer patient financing beyond a four-month duration. So they’ll likely engage vendors for that, so they can stay efficient and keep a focus on clinical care. By integrating CarePayment with DCS, we’re hoping to provide the market with a solid, integrated choice.

What did DCS add to what CarePayment was already offering in the marketplace?

There’s a whole early-cycle experience patients can ideally have, and it hinges on good estimates of a propensity to pay, as well as good transparency for the patient about her estimated patient responsibility. When a patient goes for care, they may not be in a position to really face the financial aspect of the encounter. DCS takes the opportunity to profile the patient based on their past payment behaviors, using a soft hit on their credit files. The financial counselor then has a set of materials, tailored to that patient, that makes them aware of their payment options at the point of service. If they’re not able to take action on one of those payment choices up front, they’re offered a CarePayment plan.

Essentially, DCS added a robust and very sophisticated tech-enabled on-ramp for patients. It’s a nice workflow that triages the patients and quickly identifies various work streams that providers need to take to maximize their collection efforts. Providers weren’t doing this very well—this up-front work of identifying those patients that can and will pay their balance up front either in full or with a prompt-pay discount. Those who can’t pay in full, and are facing an out-of-pocket expense they can’t fund all at once, those patients have an opportunity to work with CarePayment.

Will these sorts of vendor partnerships get more prevalent?

We think so. One, the issue of becoming effective at collecting outstanding balances from patients is going to keep accelerating. The pressure is getting more and more intense. Hospitals and physician ecosystems are simply not geared to collect from patients. They don’t have people, processes and technology to collect from thousands of patients. Integrated partnerships between complementary vendors will help make things simpler for providers.

Are there any regulatory implications of your business model?

Of course, the CFPB does treat any payment arrangement of four payments or more as a lending environment. While no one is exactly policing that right now, that is bound to change and once it starts, it will be like wildfire. So yes, there is regulatory risk, and it’s going to grow. This is why vendors that are not making a significant investment in their compliance function will not survive. In the healthcare space, we of course also have IRS 501(r) guidelines. So, overall, we definitely see the regulatory environment as a market issue and we’re monitoring it very carefully as it develops.

Do you see CarePayment and DCS changing the patient finance and revevenue cycle game?

It’s clear that this market is evolving fast. There are many new entrants working to solving the patient finance and revenue cycle issues hospitals and providers are facing—and they often don’t have—the healthcare specialization track record and background to fully understand the issues. So we are uniquely positioned. Our work has the potential to cause a tidal change in financial behavior.

It’s easy to change the behavior of those who want to have their behavior changed. We have to start addressing financial literacy at the beginning of the patient journey. We recognize that the revenue cycle has long been a business-to-business conversation. With the patient-as-payer reality, we are helping hospitals change that. Unless you’re going to provide finance options to all patients, you’re not trying to change the game. We’ve all seen that a patient in the middle of a clinical encounter may not be ready to talk payment arrangements until later in the rev cycle, and we’re prepared for that moment when they are more ready.

Do you think providers and their collections teams have been missing a critical moment in the patient financial lifecycle?

Providers don’t traditionally have a great engagement strategy to reach patients 60-75 days after the clinical encounter, when they are most likely to be struggling with the reality of the bill, and most prone to accept new information about their payment options.

We’ve done a lot to analyze collection activity and subsequent success of providers (prior to a CarePayment engagement) and what we know is that a provider is going to bill a patient for 120 days. We routinely see that they’re going to collect 80% of what they are ever going to collect in the first 60 days. And between days 61-120, they’ll virtually not collect anything more. So when they engage us, we take over an educational phone call and outreach to let the patient know “Hey, we know you owe $2,000 and we want to make sure you knew that your provider is subsidizing a program that will allow you to pay over time, at zero percent interest, etc…” We catch them in that critical window and use an opportunity—one that is typically wasted—to engage them.  

From a data perspective, there are definitely moments in a patient’s financial journey that are more or less ripe for outreach. This is a key value we add to the provider rev cycle capture.  Many patients are not ready to deal with the financial matters exactly when providers are, but when they are ready, we want to be there to capture the benefit of that receptivity. A full 80% of the cash we drive is captured in this “second-chance” period. It can’t be wasted!  

What was DCS focusing on before patients became such a huge payer demographic?

We were tracking insurance companies to see how they paid on claims, and forecasting outcomes for the revenue cycle. With the landscape changing, we pivoted and now we track patients to learn more about how they behave, and how we can best motivate their behavior. DCS was finding the same gaps in the revenue cycle that CarePayment was: Hospitals can’t really offer payment options more than four months in duration. This kept them between a rock and a hard place. The insights DCS provides can bring hospitals a level of insight about propensity to pay that’s very valuable in making the most of the patient journey.

What do you think the future holds for the hospital revenue cycle?

I see tighter vendor integration in the nearing future. Qualifying for extended healthcare financing should be like it is in the auto loan industry: Patients should be able to see in minutes whether they’re approved for certain options or not. Tech moves fast, but the truth is, business and regulatory drivers set the pace.

There are many ways we can improve looking forward. Further to patient education, I’d like to work on helping patients truly understand their bills. We want them fully knowing why something is subject to deductibles, or why their co-insurance calculates out a certain way. We need help from insurance carriers to provide better transparency to patients. It’s happening, but it’s happening slowly.


DCS Global is a software solutions firm specializing in healthcare process improvement and information management. DCS Global provides an integrated suite of solutions for Patient Access/Revenue Cycle and Patient Experience in a single source environment, iPAS, which allows for lower cost of ownership. iPAS provides seamless patient access workflow, paperless operation and advanced data analytics to our provider partners. Our suite of product helps hospitals get paid in a timely manner. iPAS includes front end and back office revenue cycle tools like order manager, authorization, eligibility, payment, e-Forms and e-Signature, patient payment estimation, patient tracking, claim status and denial tracking. iPAS is HFMA peer reviewed and is also ranked by KLAS.

CarePayment is a patient financial engagement company that accelerates providers’ transition to the new consumer-driven healthcare market. Powered by advanced technology and analytics, our innovative patient financing solutions improve patient satisfaction and loyalty while delivering superior financial results. By partnering with healthcare providers to make affordable financial options available, CarePayment helps patients get the care they need, when they need it, while protecting the financial health of provider organizations so they can continue to offer valuable care to the community. CarePayment’s patient-friendly financing is compliant with applicable state and federal consumer credit laws, requires no application, and is supported by a friendly US-based customer service staff. Accounts for the program are issued by Republic Bank & Trust, Member FDIC.


Integrated Vendor Partnership Helps Hospitals Manage Patient Self-Pay Challenge

CFPB Credit Card Market Report Addresses Collections and Recovery

Just before the holidays the Consumer Financial Protection Bureau (CFPB or Bureau) released its latest Consumer Credit Card Market Report. You can see the full report here.

This report is mandated (every two years) by the Credit Card Accountability Responsibility and Disclosure Act (“CARD Act” or simply “Act”), passed by Congress in 2009. With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, that requirement passed from the Board of Governors of the Federal Reserve to the CFPB.

Chapter 8 of the 352-page report covers the debt collection market. The report states that the Bureau surveyed “a number of large credit card issuers in order to understand current practices and trend, as well as to identify changes to internal policies in the credit card and debt collection and recovery arena.” It does not state how many creditors participated, however the report does note that none of those who responded allow third-party agencies to credit report; they do it themselves. 

Some of background highlights:

  1. Approximately one in eight debt collection complaints between January 1, 2015 and December 31, 2016 identified a credit card as the source of the debt.
  2. Debt collection industry revenue has declined in recent years, falling from about $13.3 billion in 2012 to $11.4 billion in 2016.
  3. Creditors employ around 300,000 collectors to work initial delinquencies, while the much smaller third-party collection industry employs approximately 125,000 (a reduction of nearly 10,000 jobs in the past two years). The source of this data is noted as IBISWORLD.
  4. The net credit card charge-off rate for all commercial banks rose from 3.8% in the second quarter of 2015 to 4.9% in the second quarter of 2017. Charge-off rates declined from an all-time high of 16.3% in 2010 to 4.3% in 2016. 

Highlights from the survey responses:

In-House Collections

  • Contact attempts: In general, issuers’ actual average contact attempts tended to fall well below policy maximums. Daily contact attempt limits ranged from three calls to as many as 15 per account. See table below.
  • No issuer allowed calls to continue within a given day once “right party contact” has been made.
  • Right party contact rates typically fell between 3% and 7% for in-house and first-party collections and between 0.5% and 2.0% for third-party collections over a three month period.
  • In general, issuers’ average daily number of contact attempts via telephone fell between 1.5 and 3.5.
  • Most issuers restricted the number of voicemails that can be left for a consumer each day. Among those that do so, nearly all allowed no more than one voicemail per day.
  • Nearly all of the issuers surveyed used email as a part of their credit card collection strategy. Conversely, less than one-third of issuers surveyed employ mobile text messages to communicate with delinquent consumers.

CFPB 2017 Credit Card Market Study-Debt Collection Table 1

First-Party Collections

  • Nearly all of the issuers that use first-party collectors prior to charge-off noted that they do not “place” specific accounts with first-party agencies. Instead, they allocated work between in-house and first-party collectors throughout a given day. Therefore, if available resources have shifted, a single consumer account could be handled by both in-house and first-party agents within the same week, day, or hour.
  • From 2015 to 2017, the surveyed issuers increased the total number of unique first-party agencies by 36% to 15 total agencies.
  • Those issuers that used first-party agencies used three different agencies on average.
  • A majority of the issuers surveyed required that first-party agents place, receive, and document calls to consumers using the issuer’s own case management system and dialers. In general, first-party collection agents were contractually bound to abide by the issuers’ consumer contact limit policies.

Third-Party Collections

  • More than half of the surveyed issuers worked with third-party contingency collectors.
  • The number of unique collection agencies used across issuers remained steady between 2015 and 2017, with 30 unique agencies in 2015 and 31 in 2017.
  • The percentage of delinquent accounts placed with third-party agencies prior to charge-off dropped from 8.3 in 2015 to 7.9 in 2016.
  • The average number of third-party agencies used by each issuer was seven in 2015 and eight in 2017.
  • Contingency fees ranged from 6.4% to 24% in 2015 and 7.2% to 24% in 2016, with the variation being attributed to the risk profile of the accounts being placed.

Pre-charge-off loss mitigation strategies

The report addresses a range of strategies used by issuers, including re-aging accounts, short and long-term forbearance programs, debt settlement, and debt management plans.

  • Re-aging returns a delinquent credit card account to current status without collecting the balance due. Issuers may perform a re-aging in order to assist customers with temporary cash flow issues. The quarterly re-aging average ranged from as low as 0.6% of total delinquent dollars to a maximum of 4.5%. Average re-aged balance was $660 million per quarter, with an uptick noted in the fourth quarter of 2016 due to the recent increase in credit card delinquencies.
  • Forbearance is designed to help those borrowers with longer-term financial hardship. Most of those surveyed offered one or more of these payment programs, typically consisting of a fixed payment amount over a specified period of time, and often at a reduced interest rate. New enrollment rates among the individual issuers ranged from low of 0.6% to a high of 5.3%. Forbearance inventory showed a 30% reduction from the first quarter of 2015 to the first quarter of 2016.
  • Debt settlement programs are those in which an issuer agrees to accept less than the full balance owed as full satisfaction of the balance owed. Generally, pre-charge-off loans are settled with a single lump-sum payment or multiple installments. The installments typically consist of three payments, but the total duration is not to exceed 90 days. The portion of the balance that is forgiven should generally be charged off when the settlement agreement is fulfilled. Post charge-off settlements can be structured over any length of time.

Post charge-of recovery strategies

In general, the survey found that:

  • The majority of issuers used third-party agencies throughout the entire review period
  • The majority of issuers engaged in internal recovery
  • The majority of issuers engaged in post-charge-off litigation
  • The minority of the issuers sold debt
  • All issuers warehoused a portion of their account balances 

insideARM Perspective

Given the context of potential debt collection rulemaking, it is also interesting to note that the report addresses communication with consumers. This is a very hot topic from an industry perspective, with many asking the Bureau to update and clarify the law regarding modern methods of communications. 

Most issuers reported that they accommodated special requests for limited cease communication requests, such as stopping communications at a particular time of the day or day of the week. A few issuers accepted requests to cease communications in certain channels (e.g., requesting the issuer cease making phone calls but permitting emails, letters, and text messages). Total balances in pre- and post-charge-off inventory with requests to cease communication grew significantly in recent quarters for most issuers. The year-over-year growth in account balances with these requests ranged from 5% to 44% among the surveyed issuers.

Also worth noting is the description that issuers are able to manage multiple accounts with the same consumer at once; 75% of those surveyed said they bundled accounts and handled them during a single call to the consumer. The report states that most of the issuers surveyed did not have a similar approach to bundling post-charge-off debt, with only 25% placing all of a consumer’s charged-off accounts with the same third-party agency for collections. From the perspective of consumer-friendliness, bundling accounts is a distinct benefit – it reduces the number of contacts necessary, and minimizes hoops a consumer has to jump through to designate preferences.

Additionally, benefits of the bundling strategy to the creditor include:

  • Ability to negotiate repayment on the accounts in the customer’s bundle that are most advantageous for the issuer to mitigate the loss.
  • Allows for higher account-to-collector ratios as a result of multiple accounts with one customer being counted as one account for the purposes of a call.

On the other hand, there are some challenges for issuers, incluing:

  • Finding ways to link accounts based on common identifying criteria.
  • Bundling at the customer level on the system of record, for purposes of pushing a single account representing all to a dialer or other channel.

CFPB Credit Card Market Report Addresses Collections and Recovery

SWC Group Donates More than $1,100 to Ronald McDonald House Dallas

DALLAS, Texas -– SWC Group selected Ronald McDonald House of Dallas (RMHD) as their third quarter 2017 Charities of Choice. Employees from their Carrollton, TX office volunteered to prepare and serve breakfast for families staying at the Dallas house, and raised a total of $1,105 in donations.

“It costs RMHD approximately $125 per night to host a family, but they only ask families to contribute $15 night and will not turn anyone away who cannot pay,” says Jeff Hurt, CEO. “We choose to continue supporting RMDH in their mission, so they may continue to provide opportunities of closeness for families and their loved ones.”

Employees were separated into teams and competed to see who could raise the most money. Team members coordinated a number of different fund raising activities throughout the company floor. The team who raised the most money was awarded a paid volunteer day in order to serve lunch to the families at the RMHD.  The winning group, the administrative “Consumer Account Resolution Team” selected the menu and submitted it for approval.  On November 22, 2017 the team purchased, cooked and served the food, and cleaned the kitchen afterwards. It was a great team building experience for SWC Group employees.

“RMHD does great work to help out our local community and we are honored to donate funds for them, and thankful for the opportunity to serve those families in need,” says Hurt. “We look forward to volunteering with them again.”


About SWC Group

SWC Group is one of the nation’s leading providers of accounts receivable management and consumer service solutions.  They bring over 40 years of proven experience in the government, tolling, utility, telecommunications, cable, property management, and education industries. SWC Group annually manages billions of dollars in receivable accounts, proudly serving organization of all sizes from Fortune 500 private firms to small public agencies.


SWC Group Donates More than $1,100 to Ronald McDonald House Dallas

E.D.N.Y. Rips Into Plaintiffs’ Bar on Reverse Avila Claims

The Eastern District of New York issued a scathing opinion about reverse Avila claims and issued a crushing blow to the plaintiffs’ bar in the decision for Kraus v. Professional Collections Bureau of Maryland, Inc., 2017 WL 6398744 (E.D.N.Y. Nov. 27, 2017). The decision (read it here) provides an excellent policy argument regarding the absurdity of reverse Avila claims and how they have morphed the FDCPA from a shield to a sword for consumers. The decision also finds that a settlement offer letter with a deadline satisfies Avila’s requirement to clearly state that a specific amount paid by a specific date would satisfy the debt. 

Most importantly, the court flat-out said what the industry has been saying for years regarding the plaintiffs’ bar’s abuse of the FDCPA: 

While the Court struggles to see how Avila protects consumers, little imagination is required to envision how the plaintiffs’ bar will make use of it. During oral argument, plaintiff’s counsel advised the Court that many cases have been filed as a result of the Avila decision. No doubt this is true. But are those cases serving to root out genuine instances of debt-collection abuse? Or are they, instead, serving largely to facilitate debt evasion and to prop profits among the plaintiffs’ bar? With the FDCPA, Congress intended to “arm[ ] consumers with a shield against the overly zealous debt collector.” The Court worries that, by carrying the least-sophisticated-consumer standard and strict liability to an illogical extreme, this circuit has fashioned that shield into a sword.(Citations omitted.)

Interestingly, unless the below arguments were brought up by PCBM during oral arguments, the court came to these conclusions on its own. PCBM’s motion to dismiss contained a single, completely different argument. 

The Decision’s Policy Argument 


Judge Glasser states that Avila and its progeny have lost sight of the purpose of the FDCPA: to protect consumers from abusive debt collection practices. The decision rips into the widespread abuse of the FDCPA, which caused it to become a debt relief statute rather than a shield for consumers as it was initially intended to be. When asked during oral argument why his client sought his assistance, plaintiff’s counsel stated it was because she was in financial distress and was seeking some relief – not mentioning anything about feeling abused by the letter received.

Specifically regarding Avila, the decision states that there is nothing ambiguous, deceptive, or misleading about a letter that accurately conveys the balance but is silent as to interest. Judge Glasser slams the argument, stating it is as plausible as alleging that the letter is ambiguous about the existence of Bigfoot. (Yes, Bigfoot was referenced.) 

The court ultimately finds that “[a] debtor who assumes his account balance will never increase, simply because a collection letter provides no information regarding interest, does so unreasonably, and this irrationality should not be rewarded by courts at the expense of non-abusive debt collectors.”

Second Prong of Avila Satisfied 

The court avoids going against precedent in the Eastern District by providing a conclusion that the settlement offer in PCBM’s letter satisfies the second prong of Avila. According to Avila, if interest is accruing, the letter must inform the consumer that the balance may increase or, in the alternative, clearly state a specific amount paid by a specific date would resolve the account. 

PCBM’s letter clearly stated that it would accept payment of $1552.45 on or before June 20, 2016 to settle the account.  According to Judge Glasser, this is sufficient. 


This is the blow that the industry has been waiting for. No article will do this decision justice, so it is recommended that the decision is read in full by all in the industry. Once again, read it here.

E.D.N.Y. Rips Into Plaintiffs’ Bar on Reverse Avila Claims