Archives for September 2015

CFPB Wins Temporary Injunction Against Debt Settlement Company

September 20, 2015 By admin Leave a Comment

Debt settlement company World Law Group thought it could skirt FTC rules by partnering with a lawyer and rebranding its offerings as “legal services.” That plan may not work much longer. The CFPB filed suit against World Law Group this month, alleging the company collected some $67 million in up-front fees from nearly 21,000 consumers since 2010 without doing much at all to help any of those consumers with their debt load. The U.S. District Court of the Southern District of Florida seems to agree. The court issued a temporary injunction against the debt settlement company this week, freezing company assets.

World Law Group “lured consumers with false promises of help from lawyers and collected millions in illegal upfront fees,” said CFPB Director Richard Cordray. “We are seeking to put an end to this scheme and prevent more consumers from being harmed.”

It has not been legal for companies to charge up-front fees in exchange for promised future debt management services since 2010, when the FTC amended the Telemarketing Sales Rule (TSR) in an attempt to rein in the growing number of debt relief companies targeting debt-saddled consumers.

It just so happens that right around 2010, according to the CFPB’s complaint, the management team behind two debt repair companies, Orion and Family Capital Investment & Management LLC (FCIAM), engaged in a plan to avoid TSR rule enforcement by partnering with a law firm – the aforementioned World Law Group – and offering essentially the same services for the same up-front fees, while marketing them as legal services performed by actual lawyers. The company claimed, in fact, that it had lawyers lined up in every state to help customers with their debt negotiations and that those negotiations would allow customers to pay back less then what they owe.

The CFPB alleges that the company not only violated the FTC’s Telemarketing rules, but also UDAAP, by:

Charging illegal up-front fees. According to the complaint, approximately 99% of consumers paid up-front fees, including initial fees, attorney monthly fees and bundled legal service fees, amounting to hundreds of dollars.
Promising legal representation without intent to deliver any. In practice, few if any of World Law Group’s customers had access to actual legal representation, according to the CFPB. Instead, company employees (i.e., non-lawyers) performed nearly all of the work, including negotiating with creditors and handling lawsuits if creditors sought to collect the debt through litigation.

The temporary injunction follows a temporary restraining order, also issued by the Southern District of Florida Court.

CFPB Wins Temporary Injunction Against Debt Settlement Company
http://www.insidearm.com/daily/featured-post/cfpb-wins-temporary-injunction-against-debt-settlement-company/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

GAO Report Finds IRS Management of Collection Process Still Not Living Up to Expectations

September 20, 2015 By admin Leave a Comment

A U.S. Government Accountability Office (GAO) report released on Septmember 10, 2015, found that the Internal Revenue Service (IRS) lacks written documentation of its collection program objectives and methodology. The GAO study concluded that these deficiencies make it difficult to assess the program’s effectiveness.

According to the report, the IRS estimated that for tax year 2006, the $450 billion gross tax gap included $46 billion due in delinquent tax liabilities and $28 billion due in unfiled tax returns. One of the primary means by which IRS pursues delinquent taxpayers is through the Automated Collection System (ACS). ACS, which in 2014 represented just over 25% of IRS collection program staff, is largely a call center operation that uses automated calls and letters to remind taxpayers of their tax delinquency. ACS also handles incoming calls from taxpayers responding to delinquency notices and enforcement actions.

The report states that ACS has experienced significant declines in staffing, with full time equivalents decreasing by 20 percent (from 3,672 to 2,932) from fiscal years 2012 through 2014, and that unresolved collection cases at the end of each year increased by 21 percent (from 4.2 million to 5.1 million).

As workload and staffing move in opposite directions, IRS must decide which cases to prioritize over others to ensure ACS carries out the IRS collection program mission through the fair and equitable application of the tax laws. Given this environment, the GAO was asked to review the IRS process for prioritizing and selecting collection cases to pursue in ACS.

The GAO report outlined four recommendations to the IRS:

Establish, document and implement objectives for the collection program and ACS and define key terms such as “fairness” as it applies to collection activities, which can be communicated to IRS staff.
Establish and implement clear guidance and documentation for the ACS case prioritization and selection process, including inventory, risk, and priority designations and changes to those designations over time, and communicate them to appropriate IRS staff.
Establish, document and implement procedures to complete periodic evaluations of the ACS case prioritization and selection proces and structure.
Establish, document, and implement a plan and time frame to ensure follow-up for ad-hoc evaluations of the ACS case prioritization and selection process.

In response, the IRS basically agreed to look into all of this, and if it finds it appropriate, will make changes.

insideARM Perspective

In 2009 the IRS cancelled a Private Debt Collection (PDC) pilot program, citing that the agency could do a better job – at a lower cost – in-house, and anticipated hiring over 1,000 new collection personnel in the current year to do the job.

A year later, the GAO said the study the IRS used to support its decision to cancel the program was “not soundly designed.”

In 2011 the Treasury Inspector General for Tax Administration (TIGTA) found – among other things – that the IRS did not take action on 47 percent of a sample of unpaid tax cases returned from the cancelled PDC program.

Here in 2015, it seems that the promised increase in IRS collection staff has not materialized — at least not in the ACS program.

Also of interest is that this is the second example in as many weeks of a government agency being found to lack appropriate written policies and procedures. When such deficiencies are found in regulated entities, those organizations are often fined or otherwise sanctioned in some way. Depending on the nature of the deficiency, perhaps this is appropriate. What’s the appropriate consequence for a government agency? In this case, it seems they get to say, “okay, we’ll look at it, and if WE think it makes sense we will make some changes.”

And gosh, isn’t this a dictionary definition of “the pot calling the kettle black”?

GAO Report Finds IRS Management of Collection Process Still Not Living Up to Expectations
http://www.insidearm.com/daily/debt-collection-news/accounts-receivables-management/gao-report-finds-irs-management-of-collection-process-still-not-living-up-to-expectations/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

TekCollect Partners with Dress for Success Columbus for Corporate Drive

September 20, 2015 By admin Leave a Comment

Columbus, OH – TekCollect has collaborated with Dress for Success Columbus to conduct a large corporate clothing drive this month.

The drive was held for two weeks at the end of August as part of a larger effort to collect clothing for a variety of philanthropic organizations. TekCollect segmented a portion of the drive specifically to collect professional women’s clothing for Dress for Success, who promotes the economic independence of women in need by providing professional attire, a network of support, and the career development tools to help women thrive in work and in life.

“This organization is close to our hearts. We were thrilled by the level of employee participation in what has become our third clothing drive this year. We are pleased to be able to partner with Dress for Success as they empower women in our community,” said Ron Douglas, Executive Vice President at TekCollect.

Molly Preston, Contributions Coordinator for Dress for Success, said, “We are so grateful for the clothing drive TekCollect held to benefit the women we serve at Dress for Success Columbus! To date, we have suited over 8,000 women free of charge and we CANNOT do what we do without the fantastic community support from companies such as TekCollect! Their overall contribution of over 150 professional pieces of clothing and outerwear, 25 pairs of professional ladies shoes, and 20 handbags will greatly empower the women on their way to financial independence.”

About Dress for Success

Dress for Success’s programs, including Interview and Employment Suiting, Career Center, and Professional Women’s Group Employment Retention are free of charge for every woman we assist. Any woman referred by a community partner is eligible for service. To learn more, visit www.dfscmh.org.

About TekCollect

TekCollect provides comprehensive revenue cycle management, collections and patient retention solutions to nearly 30,000 businesses nationwide. The Company partners with hospitals, clinics and practices to optimize their internal accounting practices, limit and control delinquencies, and improve positive cash flow for the long-term. TekCollect’s technologically advanced approach generates the highest recovery ratios in the marketplace, and their non-alienating strategies preserve practices’ valued patient relationships. For more information, visit www.tekcollect.com.

TekCollect Partners with Dress for Success Columbus for Corporate Drive
http://www.insidearm.com/doing-it-right/tekcollect-partners-with-dress-for-success-columbus-for-corporate-drive/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

Disadvantaged Higher Ed Entrepreneur Achieves Federal HUBZone Certification

September 20, 2015 By admin Leave a Comment

Buffalo, NY – Pulcher World Management, LLC (PWM) today announced it achieved Federal HUBZone certification late last month, a distinction further qualifying the company as an excellent choice for any Federal Private Collection Agency (PCA) seeking to meet subcontracting requirements for a U.S. Department of Education (ED) task order.

“I am very excited about the future of PWM and its ability to help PCAs meet their goals,” said James Cunningham, President. “Here in Western New York, our location provides a plethora of skilled potential employees and experienced executives. Our core belief is to treat our biggest investment – our employees – with the ultimate respect, so they can best counsel borrowers. I am looking forward to personally training and tutoring all of our people to ensure compliance across the board.”

With this announcement PWM is believed to be the only HUBZone-certified collection agency that is also a small disadvantaged business (SDB), enabling PCAs to take credit for necessary expenditures with both HUBZone and SDB firms through one relationship, saving the average PCA tens of thousands of dollars per month, and in some cases up to hundreds of thousands of dollars per month, in work that would otherwise be outsourced to multiple partners. Federal regulations require those with HUBZone commitments in approved subcontracting plans to make subcontracting awards to certified firms only, and not those simply seeking a certification that may or may not be obtained. To become certified, among other things, a firm must have its principal office within a HUBZone and must have at least 35% of its staff living in a HUBZone.

James Cunningham’s personal status as a socially and economically disadvantaged person makes the firm an SDB under U.S. Small Business Administration (SBA) guidelines, enabling PCAs to meet these requirements with a known performer on ED who has managed ED departments for PCAs and subcontractors alike. When employed by NCO Financial Systems for nearly a decade prior to its rebranding, James managed 25 people and was the firm’s number one supervisor on ED based on the value of loans set up for rehabilitation. More recently, James successfully implemented a subcontract for another PCA, with rehabilitation retention rates approaching 90% among a staff he trained with very little prior experience.

People in the PCA community think highly of Mr. Cunningham. “I had the pleasure of working with James for a number of years and consider him an outstanding talent with expertise in all areas of student loan collections. Starting his own company seemed like the perfect next step in his career,” said Joe Dilucia, Vice President at Progressive Financial Services.

PWM is a member of the Fed Cetera Network. “We’re proud to say that all of the certified HUBZone collection agencies actively seeking to become Federal subcontractors are among our members,” said Nick Bernardo, who operates the Fed Cetera Network, a “business development organization” as the term is used within 48 CFR 52.219-9 that enables PCAs to comply with subcontracting requirements by helping prime contractors and subcontractors find one another and meet a host of underlying regulations and contractual requirements. “Our program helps startups and existing small businesses more efficiently compete for this work with no up-front costs, no need for fixed marketing or payroll expenses, and no need to pay compliance professionals to study Federal subcontracting rules and periodic changes to those rules. Every time a small business joins the network, particularly a startup, we take it as an endorsement of our model.”

Fed Cetera is hosting a virtual trade fair series for PCAs this fall to enable PCAs to efficiently meet and pre-qualify potential subcontractors. PCAs interested in interviewing PWM or attending the trade fair series in order to document a good-faith effort and comply with their subcontracting plans should contact Fed Cetera.

Disadvantaged Higher Ed Entrepreneur Achieves Federal HUBZone Certification
http://www.insidearm.com/daily/student-loan-collection-news/student-loan-collections/disadvantaged-higher-ed-entrepreneur-achieves-federal-hubzone-certification/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

NARCA Applauds CFPB Action Against World Law Group

September 13, 2015 By admin Leave a Comment

Washington, DC — NARCA, The National Creditors’ Bar Association, the only professional trade association solely dedicated to attorneys who practice creditors’ rights law, applauds the recent action by the Consumer Financial Protection Bureau in the case of the Consumer Financial Protection Bureau v. Orion Processing. LLC, Bradley James Haskins, World Law Debt Services, LLC, and World Law Processing, LLC. On September 2, 2015, the United States District Court of the Southern District of Florida granted the CFPB’s motion and entered a Temporary Restraining Order (TRO), which included an asset freeze, injunctive relief, and other equitable relief against the defendants. The Consumer Financial Protection Bureau filed a Complaint under the Consumer Financial Protection Act of 2010 and the Telemarketing and Consumer Fraud and Abuse Prevention Act based on Defendants’ violations of the CFPA and the Telemarketing Sales Rule.

The CFPB alleges “Defendants’ marketers lure consumers into signing up for debt settlement services by falsely promising that consumers will be represented by local attorneys and that they will negotiate with consumers’ creditors to settle their debts. Defendants are debt settlement veterans who joined forces after federal law changed to prevent fraud by banning the taking of up-front fees before settling consumers’ debts. In an apparent attempt to circumvent that new law, Defendants began claiming that they provide legal representation,” but then continued charging consumers up-front fees for debt relief services.

Since October 27, 2010, over 21,ooo consumers across the country-representing 99% of the consumers who enrolled with World Law-have paid more than $67 million in unlawful advance fees to Defendants, who ultimately provide little or none of the services promised to consumers. The agency sought preliminary and permanent injunctive relief, rescission or reform action of contracts, the refund of monies paid, restitution, and disgorgement of ill-gotten monies, the appointment of a temporary Receiver, and other equitable relief as well as civil money penalties.

NARCA’s commitment to insuring that creditors’ rights attorneys be held to the same high level of professional conduct required and expected when practicing law. NARCA’s law firm members are licensed attorneys who abide by and commit to the Rules of Professional Responsibility in their respective states as well as NARCA’s core principles of being PROFESSIONAL, ETHICAL and RESPONSIBLE. Joann Needleman, NARCA’s Board President states, “It is incumbent on attorneys who practice in the field of creditors’ rights law to lead by example. NARCA members continue to provide the leadership necessary to demonstrate these qualities and actions in policy and in practice.”

The attorneys of NARCA member firms are dedicated to ensuring that the legal profession maintains the highest rigors of legal and ethical integrity. The failure of any law firm or attorney to uphold their ethical duty or responsibility denigrates the entire profession. NARCA raises that bar by mandating annual CLE requirements in the field of creditors rights for all of its attorneys. NARCA’s Grievance Committee is charged with reviewing the conduct of any member when necessary, who fails to strictly adhere to the Code of Professional Conduct and Ethics. In those instances where warranted, NARCA will issue the appropriate sanction and penalty.

About NARCA

NARCA is a nationwide professional trade association of over 650 skilled creditors rights law firms and in-house counsel of creditors. NARCA members are committed to the fair and ethical treatment of all participants in the debt collection process and are required to adhere to NARCA’s Code of Professional Conduct and Ethics. As licensed practicing attorneys, members are also governed by state bar association Rules of Professional Conduct and must practice law in a manner consistent with their responsibilities as officers of the court.

NARCA Applauds CFPB Action Against World Law Group
http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/narca-applauds-cfpb-action-against-world-law-group/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

Utilizing Technology to Mitigate the Risk of Dialing in the Wake of the Latest FCC-TCPA Ruling

September 13, 2015 By admin Leave a Comment

On July 10, 2015 the Federal Communications Commission (FCC) released a highly anticipated decision regarding the Telephone Consumer Protection Act (TCPA). This decision prompted ACA International, Professional Association for Customer Engagement, Inc., the U.S. Chamber of Commerce, and Sirius XM Radio to quickly appeal. These appeals highlight the total lack of clarity in the ruling, which leaves the choice to dial or not dial up in the air. With the interpretation and advice of your corporate counsel, your ownership and executive teams must decide on the balance of risk vs. reward. In an effort to find solutions to this dilemma, DAKCS polled its dialing customer base about the use of dialing and messaging technology and the FCC decision. Based on the data gathered, we have highlighted four ways to help mitigate the risks of using dialing and messaging technology.

In general, our customers wanted a clearer definition of an auto dialer. Excluding a rotary phone, our customers felt that any technology may be classified as an auto dialer. Many in the industry argue that the TCPA
should exclude the collection industry and treat us separately. Still, the incidences of TCPA lawsuits rise, along with steeper and steeper fines.

In spite of the negative feedback, our customers expressed the importance of taking precautions and evaluating operations to minimize the exposure to lawsuits. Of those polled, 81% are going to continue dialing. Below, we tackle four of their largest Pain Points regarding the use of dialers.

Attacking these pain points might help protect your collection agency or department from potential class actions and/or TCPA lawsuits, allowing you to continue to utilize automated dialing and messaging technology as an efficient tool in your collection practices.

Utilizing Technology to Mitigate the Risk of Dialing in the Wake of the Latest FCC-TCPA Ruling
http://www.insidearm.com/freemiums/utilizing-technology-to-mitigate-the-risk-of-dialing-in-the-wake-of-the-latest-fcc-tcpa-ruling/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

CBE Lauded as Employer of Choice Across Iowa

September 13, 2015 By admin Leave a Comment

CEDAR FALLS, Iowa – Two respected Iowa publications have once again honored CBE Companies Inc. (CBE) as one of the best places to work in the state.

In its home community of Waterloo-Cedar Falls, CBE was named “Employer of Choice”, while the Des Moines Register ranked CBE number 24 among all Iowa workplaces in the large business category.

For eight years the Waterloo-Cedar Falls Courier has consistently recognized CBE as one of the top employers in the Cedar Valley.

The newspaper solicits nominations from employees throughout the region, then relies on a panel of business leaders to select the winners. The employees who nominated CBE spoke of a company that cares about its workers, empowers them to perform and encourages them to grow with many opportunities to grow and enhance their careers.

“I started at CBE for a job, and quickly it turned into my career,” said CBE employee Stephanie Perry. “This company has invested time into me, both personally and professionally.”

The Des Moines Register partners annually with WorkplaceDynamics, a research firm focused on organizational health and employee engagement, to research top workplaces in Iowa. Workplace Dynamics conducts anonymous surveys with employees across the state and uses a statistical approach to rank the top businesses for employees. The company conducts similar surveys in partnership with media outlets across the country, including more than one million employee surveys in all.

Dan Tovar said CBE has allowed him the chance to work alongside some of the best people in his entire career. The quality of colleagues from management to associates convinced Tovar the corporate culture created the quality workforce.

CBE invests in its people, including a training based on Stephen Covey’s “The 7 Habits of Highly Effective People” for every employee. Chairman and Chief Executive Officer Tom Penaluna believes the most effective leaders let employees shine.

“As an employer, one of the most important things we can do is give them a vision and a focus on what we’re trying to do and make sure we can provide all the tools they need to be successful and get out of their way and let them be successful,” Penaluna said. “So far, it has worked out well for us and them.”

About CBE Companies

Founded in 1933, CBE Companies is a global provider of outsourced call center services focused on connecting people with solutions. The company specializes in receivables management and customer care services. This narrow focus has enabled the company to be an expert in every aspect of the business. From a one-of-a-kind culture immersion approach to a proven ramp process, CBE’s focused expertise saves its partners money and enables them to focus on their core business.

CBE approaches every business relationship as a strategic partnership. The company shares in its partners’

successes and failures and strives to create more of the former and less of the latter. CBE firmly believes transparency and communication are the cornerstones in the foundation for success. The company’s approach to a strategic partnership begins with open communication; this assures CBE partners that the team handling their business is committed to delivering customer insights, ideas and new ways to accomplish goals.

With more than 1,600 people in six locations globally, CBE Companies can deliver the right solution in the right location(s) for your ever-changing business needs. Its corporate headquarters is located in Cedar Falls, Iowa, with two facilities in Waterloo, Iowa, and additional facilities in Overland Park, Kansas; New Braunfels, Texas and Manila, Philippines.

For more information about CBE Companies, please visit www.cbecompanies.com or call 888-386-0273.

CBE Lauded as Employer of Choice Across Iowa
http://www.insidearm.com/daily/collections-jobs-news/cbe-lauded-as-employer-of-choice-across-iowa/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

Hold a Drive and Support Military Vets Like I.C. System

September 13, 2015 By admin Leave a Comment

Collingswood, NJ: ARMing Heroes (www.armingheroes.org), the collection industry’s charity for military veterans, today announced the start of its sixth annual No Debts for Vets Charity Fundraising Drive, which runs from September 11^th through Veterans Day, November 11^th, every year. Tax deductible donations are now being accepted online at www.armingheroes.org and via mail to PO Box 353, Collingswood, NJ 08108, payable to ARMing Heroes.

The annual drive relies on the generosity of ARM industry companies to raise and donate funds in support of military vets and their families. IC System, Inc. (www.icsystem.com), headquartered in St. Paul, MN, has once again named ARMing Heroes as one of its chosen charities for 2015. “Each year, IC System holds a golf tournament to raise funds for charitable non-profit organizations,” said I.C. System’s Roxanne Bdzok in a letter to ARMing Heroes. “Our employees vote for which organization they would like IC System to make a donation towards, and once again their choice was ARMing Heroes. We are proud to present the charity with a donation again this year.”

Other ARM firms across the nation are already showing support of this worthy cause, giving this year’s drive a stronger than ever start. Your company can follow suit by signing up to hold a drive here. Once you register, downloading the Employee Fund Drive Starter Kit makes it easy to get started. In four easy steps, the kit outlines what is needed to announce, manage, and complete a successful employee drive. Additionally, any company that holds a drive and donates to the charity will receive Donor Dog Tags to commemorate their support of military veterans.

Last year, donors contributed the largest amount of funds raised since the organization’s inception in 2009. As a result, nearly four dozen grants were awarded to struggling military vets and their families, most of which were disbursed to the creditors of grant recipients at the end of the year, just in time for the holidays. Many grant awards averaged close to $2000, with the largest grant at $5000. Most grant recipients struggle with service-connected disabilities, unemployment, and delinquent debt, and have turned to ARMing Heroes to help get their lives back on track.

Stories of past grant recipients remind us all how rewarding this program can be. However, none of it would be possible without the support of generous donors within the ARM industry. The charity’s flagship No Debts for Vets Charity Fundraising Drive kicks-off today, September 11^th, and continues through Veterans Day, November 11^th. Companies interested in getting involved are urged to visit www.armingheroes.org for more information.

About IC System, Inc.

IC System, Inc., a privately-owned, family-operated company founded in 1938, provides accounts receivable management services for many industries including healthcare, financial services, retail, utility, and communications. Headquartered in St. Paul, MN, IC. System also has an office in Wisconsin.

About ARMing Heroes

ARMing Heroes was founded and began operating in March, 2009. The organization’s mission is to serve the needs of U.S. military veterans, including their spouse and children. ARMing Heroes fills a charitable niche by linking people identified with employment, credit, and financial counseling needs with the accounts receivable management industry, an industry uniquely poised to help in these areas. Persons interested in volunteering their time and others interested in applying for benefits or pledging other forms of support are encouraged to contact the organization at www.armingheroes.org.

What Can I Do Right Now to Help?

Visit www.armingheroes.org and donate now.
Make ARMing Heroes your designated charity through the AmazonSmile program.
Like the ARMing Heroes page and post this article to your page on Facebook.
Tweet about this article on Twitter.
Join our group on LinkedIn, the ARMing Heroes Veterans Charity Supporter / Assistance Center.
Forward this article via email to your key contacts.
Print this article and fax it to your local congressional office and ask them to post our website on theirs as a resource for vets.

Hold a Drive and Support Military Vets Like I.C. System
http://www.insidearm.com/doing-it-right/hold-a-drive-and-support-military-vets-like-i-c-system/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

Empereon-Constar Announces Plans To Open A Nearshore Call Center Facility In Baja

September 13, 2015 By admin Leave a Comment

Phoenix, Arizona – Empereon-Constar, a leading provider of comprehensive contact center solutions that span the entire lifecycle of a consumer account, announced today plans to open a new nearshore facility in Baja. This expansion allows Empereon-Constar to accommodate current and future client growth needs while delivering a strategic advantage to clients requesting a nearshore option.

“The opening of our Baja contact center strengthens our service offerings to current clients and also allows us to expand into new markets,” said Travis Bowley, CEO of Empereon-Constar. “Additionally, it demonstrates our ongoing commitment to providing innovative, high quality, cost competitive global solutions on behalf of our clients.”

Located just minutes from San Diego, California, the Baja facility will be under Empereon-Constar’s direct management, offering clients a seamless extension of our existing operation with all the advantages of a cost effective nearshore contact center. The center features a world-class IT infrastructure and well-educated agents who are fluently bilingual, fully bicultural, and highly skilled. Empereon–Constar plans to open the center with new business in Q4 2015.

“I am delighted to see this center established,” said Yvonne Torrijos, Chief Marketing Officer of Empereon-Marketing. “It provides a high-touch global solution with many benefits to our clients who are requesting a lower cost, nearshore solution.”

About Empereon-Constar

Empereon–Constar delivers comprehensive contact center solutions spanning the entire lifecycle of a consumer account, for each touchpoint of the consumer’s journey. Through two distinct, but affiliated, privately held entities, Empereon–Constar provides end-to-end customer solutions for many leading companies representing the finance, telecommunications, entertainment media, satellite, broadband, e-commerce, consumer loan, bankcard, and underbanked business sectors. Working in partnership with each client, the companies develop innovative consumer contact solutions designed to achieve client business goals, ensure brand recognition, optimize customer satisfaction, and enhance the customer experience. Results are achieved through a combination of management expertise, extensive experience in developing highly skilled teams, and advanced technologies, which allows Empereon–Constar to deliver measurable value to its clients.

To learn more about Empereon-Constar, email Yvonne Torrijos at Yvonne.Torrijos@constarfinancial.com or Yvonne.Torrijos@empereon.com.

Empereon-Constar Announces Plans To Open A Nearshore Call Center Facility In Baja
http://www.insidearm.com/daily/collections-jobs-news/empereon-constar-announces-plans-to-open-a-nearshore-call-center-facility-in-baja/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News

Encore Enters Settlement Agreement with CFPB – Company Position

September 13, 2015 By admin Leave a Comment

SAN DIEGO — Encore Capital Group, Inc. (Encore), an international specialty finance company (NASDAQ: ECPG), today announced it has entered into a settlement agreement with the Consumer Financial Protection Bureau (CFPB). The settlement includes a civil payment and consumer refunds connected to two isolated issues, which are not current practice and were changed some time ago.

“After rigorously and thoroughly scrutinizing seemingly countless aspects of our business for more than a year, the CFPB ultimately identified only two key issues warranting consumer refunds,” said Kenneth A. Vecchione, President and Chief Executive Officer. “While we disagree with the CFPB’s positions on these two issues, we chose to agree to a settlement so we can move forward. We also believe the CFPB is imposing yet-to-be-adopted rules to past practices. This outcome is not about current law or rules already on the books, but instead about the CFPB subjecting companies to its own interpretations that have never been codified or adopted.”

The consumer refunds in the settlement are tied to alleged issues regarding time-barred debt and dispute language in litigation. On the issue of time-barred debt, the CFPB said that when Encore sent letters that mentioned a “settlement” opportunity for the consumer (which typically included a debt forgiveness component), specifically using the word “settlement” implied that litigation was being threatened. Encore supports the disclosure of time-barred debt even though a number of courts have found there is no requirement to do so under governing law.

In terms of dispute language in litigation, the CFPB thinks Encore should not have assumed that a consumer debt was valid if the consumer did not dispute it under the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides consumers with a 30-day period in which to dispute debt. Encore exceeds this requirement by giving consumers 45 days to dispute their debt under the FDCPA.

With both issues, Encore maintains that it acted in accordance with all relevant laws. When the CFPB provided a different interpretation, Encore, in keeping with its industry leadership in consumer-centric approaches, chose voluntarily to change its practices, although not agreeing with the CFPB’s position. These best practices were implemented long before they became requirements of this settlement.

“As a result of these two settlement issues, Encore expects to take a one-time, after-tax charge of $43 million in the third quarter of 2015,” said Jonathan Clark, Chief Financial Officer. “We believe this charge encompasses all related impacts of this settlement, including civil monetary penalties, restitution, ancillary state regulatory matters, legal expenses and impairments of several pool groups due to the impact on our current ERC for our historic book of business. Overall, the company anticipates that after this one-time charge, any future earnings impact will be immaterial. Specifically, excluding the one-time charge, Encore’s earnings growth trajectory remains intact.”

In addition to the financial impact, the agreement also sets out specific operational requirements to be followed by Encore. Substantially all of these requirements are part of Encore’s current operations, and some have been in place for several years. With the few adjustments that still need to be made, it is only a matter of fine-tuning existing practices.

“This outcome does not change the way we think about our long-term growth prospects. If anything, it strengthens our competitive position in the marketplace because we believe this settlement, which we are largely compliant with, will become de facto standards for the entire sector,” said Vecchione. “The fact is that the financial services and debt buyer industries operate in a challenging environment where regulators can reinterpret laws at any time. For years, we’ve been investing in a consumer-centric compliance program that is second-to-none in the industry. We believe this process and the settlement validates those efforts and maintains our competitive advantage. We are well positioned to continue our industry leadership, where others must elevate their compliance practices to adjust to this new regulatory environment. We also believe these conditions could lead to further industry consolidation.”

The CFPB’s evaluation of the debt buyer industry has been going on for some time. With this action, the bureau has indicated that it intends to drive change through enforcement rather than rulemaking. The operational requirements of this settlement appear to represent the CFPB’s expectations for industry best practices, even if not currently stated in law.

“We continue to firmly believe that a fair and transparent public rulemaking process is the most appropriate method for establishing industry standards,” said Greg Call, Senior Vice President and General Counsel. “When we ultimately see final industry rules from the CFPB, we expect them to be largely consistent with what is included in this settlement. We appreciate that the CFPB has removed the ambiguity in our industry by providing much-needed clarity around key issues. Now all companies, large and small, should operate on a more level playing field knowing the CFPB’s expectations.”

About Encore Capital Group, Inc.

Encore Capital Group is an international specialty finance company that provides debt recovery solutions for consumers and property owners across a broad range of assets. Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks, credit unions, municipalities, and utility providers. Its Propel Financial Services subsidiary also helps home and business owners resolve property tax debt and avoid foreclosure through affordable monthly payment plans.

Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about the company can be found at http://www.encorecapital.com. Information found on the company’s website is not incorporated by reference.

Forward Looking Statements

The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results, performance, business plans or prospects. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent reports on Forms 10-K and 10-Q, as they may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.

Encore Enters Settlement Agreement with CFPB – Company Position
http://www.insidearm.com/daily/debt-collection-news/accounts-receivables-management/encore-enters-settlement-agreement-with-cfpb-company-position/
http://www.insidearm.com/feed
insideARM

Accounts Receivable Management

Filed Under: News