Archives for June 2015

“The Ayes Have It” — FCC Passes Declaratory Ruling on Portions of the TCPA


The FCC held a hearing this morning on a proposed Declaratory Ruling and Order that FCC Chairman Tom Wheeler claimed  will “reaffirm the Telephone Consumer Protection Act’s (TCPA) protections against unwanted robocalls, encouraging pro-consumer uses of robocall technology, and responding to a number of requests for clarity from businesses and other callers.”

insideARM previously reported on Chairman Wheeler’s May 27, 2015 Fact Sheet regarding his TCPA proposals. Unfortunately, as noted in our earlier article, that “Fact Sheet” was short on facts. The document was light on specifics regarding the proposed Declaratory Ruling. However, it was clear that the proposed ruling was generally not going to be pro-business and specifically, not helpful to the ARM industry.

ARM industry experts were not optimistic regarding the proposed Declaratory Ruling.  As it turns out, based upon the dialogue at the hearing, industry concern and pessimistic outlook was justified.

There are a number of specific areas of concern for the ARM industry in the Declaratory Ruling.

  1. Consumers would have the right to revoke their consent to receive robocalls and robotexts in any reasonable way at any time. It is not yet clear what that means. But, based upon the discussion at the hearing, it means exactly what it says.  A consumer may revoke consent in any way, anytime, and anywhere.
  2. If a phone number has been reassigned, callers must stop calling the number after one call. Chairman Wheeler referred to this provision as the “One Strike Rule.” Basically what the Chairman suggested is that a caller could make a single call to a re-assigned number without liability. Subsequent calls would expose the caller to the strict liability under the statute.
  3. Defines an “autodialer” as any technology with the capacity to dial random or sequential numbers. Based upon the discussion at the hearing it appears that this is to be considered in the broadest terms possible.

The Declaratory Ruling was confirmed by the FCC by a 3-2 vote.  The vote was along political party lines.  The 3 Democrat commissioners (including Chairman Wheeler) voted in favor of the Ruling while the 2 Republican commissioners opposed it.

The depth of the disagreements between the individual commissioners on this issue was palpable. It was clear that the Republican commissioners felt that the new Ruling went too far and was punitive to legitimate business.  The Democrat commissioners lumped all potential callers into the unscrupulous “robocaller” category.

Much more will be written on this matter once the Declaratory Ruling is made public and reviewed.

“The Ayes Have It” — FCC Passes Declaratory Ruling on Portions of the TCPA
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Accounts Receivable Management

CFPB Issues its Seventh Semi-Annual Report to Congress


Tim Bauer

Tim Bauer

On June 15 the CFPB issued it seventh semi-annual report to Congress on its activities. This is not to be confused with the CFPB’s annual report to Congress on the FDCPA. This report covers all CFPB activities, not just FDCPA or debt collection activity.

The 190 page report provides a summary of CFPB activities for the period from October 1, 2014 through March 31, 2015.

insideARM has previously reported on many of those activities.

However, there were some interesting items in the report for the ARM industry.

  1. The CFPB continues to grow. As of March 31, 2015, the CFPB team consisted of 1,459 employees.
  2. Currently about 30 million consumer – nearly one out of every 10 Americans – are subject to debt collection, for amounts that average $1500 each.
  3. During the time period in question the CFPB received approximately 85,300 debt collection complaints.

When discussing debt collection, word choices in the report were interesting. The Bureau noted that “Many companies in the industry play by the rules.”  Not “Most” companies play by the rules. Clearly the ARM industry has not yet convinced the CFPB that most companies do, in fact, play by the rules.

It is likely that the House Financial Services and Senate Banking Committees will again hold hearings on the latest report.  As insideARM reported in June of 2014 CFPB Director Cordray appeared at last’s year hearing before that committee.  He will likely again appear as a witness this year.

CFPB Issues its Seventh Semi-Annual Report to Congress
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CFPB Takes Action Against Auto Finance Company for Debt Collection UDAAP Violation


Yesterday the Consumer Financial Protection Bureau (CFPB) announced it was taking action against a lender that focused on making automobile loans to servicemembers.

The CFPB alleges that Security National Automotive Acceptance Company, LLC, an Ohio based auto finance company, regularly engaged in prohibited, aggressive debt collection tactics against servicemembers and used a combination of illegal threats and deceptive claims in order to collect debts.

In announcing the action CFPB Director Richard Cordray stated: “Security National Automotive Acceptance Company took advantage of military rules to put enormous pressures on servicemembers to pay their debts.  For all the security they provide us, servicemembers should not have their financial and career security threatened by false information from an auto loan company.”

The company operates in more than two dozen states and specializes in lending to servicemembers. It lends money primarily to active-duty and former military to buy used motor vehicles.

The CFPB alleges that the company violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibitions against unfair, deceptive, and abusive acts and practices by using aggressive collection tactics that took advantage of servicemembers’ special obligations to remain current on debts. The CFPB suggests thousands of servicemembers were impacted.

Among the specific allegations in the complaint the CFPB alleges that the company has:

  • Exaggerated potential disciplinary action that servicemembers would face
  • Contacted and threatened to contact commanding officers to pressure servicemembers into repayment
  • Falsely threatened to garnish servicemembers’ wages
  • Misled servicemembers about imminent legal action

Through the lawsuit, the CFPB seeks to stop the alleged unlawful practices of the company. They have also requested that the court impose penalties on the company for its conduct and require that compensation be paid to consumers who have been harmed.

As with any lawsuit, the complaint is not a finding that the company has violated any law.  The company has the right to defend itself against the CFPB claims.

 

CFPB Takes Action Against Auto Finance Company for Debt Collection UDAAP Violation
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Accounts Receivable Management

KM² Solutions Continues Expansion Plans in the Caribbean and Central America


New York, NY – KM² Solutions is proud to announce the expansion of two BPO contact centers located in the Caribbean and in Central America.  The expansion of these facilities is directly tied to the surge of new business from both existing clients and new client starts.  Furthermore, the growth signifies KM² leadership within the region and demonstrates the scalability and readiness of KM2 for its clients.

In the Caribbean, the Bridgetown, Barbados facility has seamlessly relocated from a center of modest size to one with significantly greater capacity and state-of-the-art connectivity.  The expansion to the new facility will encompass 70,000 square feet, housing anywhere from 1,200 to 1,500 seats.  “We have increased staffing organically by significant numbers with existing relationships, adding to existing functions and starting new functions.  In addition, we have recently added over 5 new account relationships in recent months” said Tony Jennings, VP Caribbean Operations.

In Central America, KM2’s facility in San Pedro Sula, Honduras, has just acquired an additional floor within the Altia Business Park.  The new location of 14,500 square feet is projected to increase capacity by about 450 new seats, and will be occupied by the third quarter of this year.  This move is driven by existing client growth; however the center is reserving capacity for new clients as well.  The Altia Business Park is the first Class A, self-sustainable business park in the region.

KM² Solutions has become one of the leading nearshore BPO firms, offering the highest quality service to its clients, regardless of industry or size.  The recent growth is a testament to the strong performance and cost benefits that KM² provides to its partners.  The investments in additional capacity will allow for continued readiness as new and existing clients expand going forward.

About KM2 Solutions

KM2 Solutions is a leading provider of nearshore business process outsourcing (BPO) services, specializing in the finance, telecom, media, and technology industries.  With contact centers throughout the Caribbean and Central America (St. Lucia, Barbados, Grenada, Dominican Republic, and Honduras), KM2 provides clients with cost-effective, bilingual solutions for customer care, sales and retention, collections, customer support, and back office processing, through voice, chat, mobile, and email.

For further information, please contact: Joe Wester VP Sales at (262) 790-2656

KM² Solutions Continues Expansion Plans in the Caribbean and Central America
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Accounts Receivable Management

SIMM Associates Launches ComplyARM Dashboard Online Compliance Management System


Newark, Delaware – SIMM Associates is proud to announce the deployment of a new online Compliance Management System as part of our continual commitment to enhance the services we offer to creditors. After evaluating multiple options, ComplyARM Dashboard (http://complyarm.com) was selected for encompassing more than complaint tracking, and for offering a complete compliance management solution including vendor management, licensing, insurance, certifications and other benefits.

“We pride ourselves on being on the cutting edge of technology,” said Chief Operating Officer Jeff Simendinger.  “Dashboard gives us a simple way to track, analyze and report on our compliance events. Our clients can access essential compliance information directly from an online portal, and consumers can provide feedback through the portal integrated into our website. We see a significant value in deploying Dashboard and this is an opportunity to improve the experience for consumers and our clients.”

ComplyARM Dashboard is a unique compliance management system that creates a collaborative tool for agencies, clients and other partners to work together to document and resolve compliance issues. Dashboard includes effective workflow tools to collect feedback directly from consumers, investigate and respond to the consumer for quick resolutions.

“Dashboard improves our compliance tracking beyond consumer events” said Compliance Manager, Ashley Ramos. “We use Dashboard to manage our licensing, insurance and membership tracking. It gives us an easy way to keep everything perpetually up to date.”

“It has been a pleasure working with SIMM Associates to further enhance our product,” said ComplyARM Partner, Adam Parks. “Their extensive operational insight has helped us to see our system from an agency perspective which gives us the ability to develop and add relevant features to improve the experience of all our users.”

ABOUT SIMM ASSOCIATES, INC.  (https://www.simmassociates.com)

SIMM is a full service nationally licensed ARM company providing collection solutions to the student lending, consumer lending, credit/retail card, healthcare, auto finance, credit union and debt buying industries. SIMM provides best in class deceased care solutions that encompass decedent verification, estate location scrub, proprietary Probate Tracker SM claim filing process and an empathetic survivor recovery solution all performed with brand sensitivity and regulatory compliance in mind. SIMM has passed the US Department of Education’s stringent requirements and currently is a subcontractor for the existing Private Collection Agency contract. Its headquarters is located in Delaware in a 32,000 sq. ft. state of the art call center. SIMM holds the following certifications: PCI Level 1, ISO 27002 and SSAE16 Type II. SIMM services customers throughout the United States including Puerto Rico.

For more information please contact Jeffrey Simendinger COO, jeffs@simmassociates.com (302)283-2802.

 

SIMM Associates Launches ComplyARM Dashboard Online Compliance Management System
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CU Recovery Awards $5,000 in Collection Academy Scholarships; Recipients will Share Entries at Conference


Wyoming, MN – CU Recovery, the #1 collection resource for credit unions, is pleased to announce the award of $5,000 in tuition scholarships to its Fall 2015 Collection Academy.  Five scholarships were awarded to small, medium and large credit unions based on their submission about changes that were implemented in their collection department or credit union, that produced significant results.  Recipients will present their ideas and results at the Collection Academy during the Peer to Peer discussions.

Wendy Elieff, Vice President of Sales and Service, stated: “I was very pleased to see the innovative ideas that credit unions have implemented to create a more effective workplace. They were perfect examples of the credit union philosophy of ‘people helping people’. ”

Scholarship winners:
James St. Aubin, Community Alliance Credit Union – Dearborn, MI
    Empowering Employees with Flexible Schedules

Richard Davis, Minuteman Credit Union – Rapid City, SD
    Changing Workplace Culture with Shared Experiences

Stephanie Fredrickson, Members Cooperative Credit Union – Cloquet, MN
    Identifying Obstacles & Empowering Staff Through LEAN Training

Shonna Swartz, Premier Credit Union – Des Moines, IA
    Limiting Exposure During Growth via Special Savings Account

Jay Stevens, GCS Credit Union – Granite City, IL
    Challenging Old School Collection Philosophy & Make it Fun to Stay Sane

The recipients’ reaction to winning the scholarship was excitement to share their successful ideas with other credit unions.   Stephanie Fredrickson from Members Cooperative Credit Union said I was thrilled to find out I was selected to receive a scholarship to the academy!  I’m very excited to hear what others have to share and just as excited to share information on a tool we use ourselves at MCCU.”

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About CU Recovery & the Loan Service Center

Serving over 2500 credit union since 1990 CU Recovery, Inc. is a full service collection agency, working exclusively for credit unions, dedicated to maximizing recoveries on charged off loans. The Loan Service Center, Inc. provides staffing solutions for credit union collection departments to minimize losses on their delinquent active loan portfolio. The CU Recovery Collection Academy is held in October of each year and is a resource for continuing education to assure the success of Credit Union collection departments in meeting their member service and delinquency reduction goals. For more information: www.curecovery.com

CU Recovery Awards $5,000 in Collection Academy Scholarships; Recipients will Share Entries at Conference
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Stellar Recovery – Top Fifty Fastest Growing Private Companies in Northeast, FL


Keith Jones, President & Chief Marketing Officer, is pleased to announce that Stellar Recovery, Inc. has been recognized by the Jacksonville Business Journal as one of the 50 fastest growing private companies in Northeast Florida, based on performance over the past 3 years.  According to Ennis Pellum & Associates CPAs, the Jacksonville Business Journal business partner that tallies the results, the 2015 class of nominees increased in size and strength from last year, thereby boosting the competition.

This is the 3rd year in a row that Stellar Recovery has earned this prestigious award after coming in at number 8 in the 2012 class, and number 45 in the 2013 class.  Winners will be recognized and the rankings released during a luncheon hosted by the Jacksonville Business Journal in July.  Jones said, “We continue to grow our company by investing in our people and making sure our processes are giving us leading edge performance and compliance in all areas that are important to our clients.”

Jones continued, “0ur growth comes from several new clients in the cable TV, medical, sports marketing, telecommunications, and utility company verticals.  We also continue to earn more market share within our current clients because of our exceptional operations team.  It is a phenomenal accomplishment to make this list for 3 consecutive years, as more than half of the companies don’t make the list a second time.”  “We would like to thank our clients, employees, and vendors for helping us achieve such dramatic growth.”

Ranking is based on the company’s percent of annual growth over the previous 3 year period.  Stellar Recovery’s Revenue grew 127% from 2009 to 2011; 23% from 2010 to 2012; and 37% from 2012 – 2014.

Stellar Recovery, Inc. Corporate Headquarters is located in Jacksonville, Florida, with a satellite office in Kalispell, Montana.  Please visit our website at www.stellarrecoveryinc.com.

Stellar Recovery – Top Fifty Fastest Growing Private Companies in Northeast, FL
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EBay and PayPal Push the Boundaries of Prior Express Consent


The New York Times reported yesterday that EBay has revised its user agreement (which will take effect June 15) to include a statement that has raised concerns among state regulators. Here is the excerpt from the section “Authorization to Contact You; Recording Calls” [bold emphasis added]: 

“You consent to receive autodialed or prerecorded calls and text messages from eBay at any telephone number that you have provided us or that we have otherwise obtained. We may place such calls and texts to: (i) notify you regarding your account; (ii) troubleshoot problems with your account; (iii) resolve a dispute; (iv) collect a debt; (v) poll your opinions through surveys or questionnaires; (vii) contact you with offers and promotions; or (vi) as otherwise necessary to service your account or enforce this User Agreement, our policies, applicable law, or any other agreement we may have with you. Standard telephone minute and text charges may apply.

eBay may share your telephone numbers with our service providers (such as PayPal, billing or collections companies) who we have contracted with to assist us in pursuing our rights or performing our obligations under this User Agreement, our policies, applicable law, or any other agreement we may have with you. You agree these service providers may also contact you using autodialed or prerecorded calls and text messages, only as authorized by us to carry out the purposes we have identified above, and not for their own purposes.

Evidently PayPal has added a similar statement, scheduled to take effect on July 1. This is certainly the kind of protection that collectors would love to see in their clients’ contracts as it covers the matter of prior express consent. Or does it? The New York Attorney General has sent letters to both firms requesting more information about the new policy.

According to the Times article, “among the questions the letters asked the companies to answer: How can a customer consent to being robocalled on a telephone number if he or she did not provide the number in the first place? And just how can you opt out of this?”

The moves by Ebay and PayPal come on the eve of a June 18, 2015 FCC Open Meeting where the Commissioners are scheduled to vote on proposed Declaratory Rulings  that FCC Chairman Wheeler believes will close loopholes and strengthen consumer protections already on the books. One could easily argue that the proposed changes to the user agreements fly in the face of Chairman Wheeler’s plans.

It is not just the New York Attorney General that is interested in this move by Ebay and PayPal.  Consumer Rights attorneys will likely be monitoring this situation intently.  The TCPA has been a hotbed of class action litigation in recent years as the statute is so Draconian and the potential liability so great. (Not to mention the potential for the award of large attorney fees.)   This is precise the type of fact scenario that leads to class action litigation.

EBay and PayPal Push the Boundaries of Prior Express Consent
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Accounts Receivable Management

Executive Change: RevSpring Hires Bill Needham as Chief Technology Officer


Wixom, Mich. – RevSpring is pleased to announce the addition of Bill Needham as the company’s new Chief Technology Officer. In this newly created role, Needham will be responsible for the development of RevSpring’s customer-facing technology solutions and platform.

“Bill joins us with a wealth of experience in data warehousing, high-volume web applications, and risk assessment tools,” said Tim Schriner, RevSpring’s president and chief executive officer. “We’re thrilled to have him on board to lead the team and execute the company’s strategic technology vision.”

Needham previously served as Vice President, Technology and Development at Wellness & Prevention, a Johnson & Johnson company. His career has also included stops at Thomson Reuters Healthcare and Fair Isaac, where he helped drive customer-oriented technology solutions.

“RevSpring has an exciting portfolio of products to offer customers,” said Needham. “I’m looking forward to guiding the company’s technology efforts, providing direction and leadership as we roll out new, innovative solutions.”

Needham holds a BS in Mathematics/Computer Science from Purdue University, and an MBA from Northern Illinois University. He will be working closely with RevSpring’s technology experts nationwide, but will be based in the company’s Michigan headquarters.

About RevSpring
RevSpring is a leading provider of revenue cycle technology services offering data analytics, multi-channel customer communications and payment solutions to the healthcare and financial services end markets. The company’s services enable customers to accelerate cash collections across the revenue cycle through an integrated, technology-driven and end-to-end service offering, all while ensuring regulatory compliance.  For more information visit their web site at www.revspringinc.com.

Contact:
Heather Taylor
765.730.6632
htaylor@revspringinc.com

Executive Change: RevSpring Hires Bill Needham as Chief Technology Officer
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Accounts Receivable Management

Is It Illegal to Charge Credit Card Convenience Fees?


John Rossman,  Moss & Barnett

John Rossman,
Moss & Barnett

There is a cost associated with a business accepting payments via credit card.  Depending on the type of credit card, bank and payment processor used by the business, that cost can vary for each transaction.  However, most consumers expect and demand that businesses will accept credit cards as a payment method.

For the collection industry, whose members often accept a volume of payments, the fees associated with accepting credit card payments from consumers can be a substantial sum of money every month.

Recent litigation and changes to the law regarding the ability of collection agencies to assess credit card convenience fees raises numerous questions.  In the latest episode of the Debt Collection Drill, attorneys John Rossman and Mike Poncin tackle the issue of credit card convenience fees and the rapidly evolving law that governs such fees.

Listen here:


http://www.insidearm.com/wp-content/uploads/TDCD_ep48.mp3

 

 

Is It Illegal to Charge Credit Card Convenience Fees?
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