Archives for November 2015

Account Control Technology Holdings, Inc. Donates $51,670 to Susan G. Komen® and the Fight to End Breast Cancer

November 8, 2015 By admin Leave a Comment

DOVER, DE – Account Control Technology Holdings, Inc. (ACT Holdings), a holding company that provides comprehensive business process outsourcing and financial services, recently donated $51,670 to Susan G. Komen®, a nonprofit organization which works to end breast cancer in the U.S. and throughout the world through support for groundbreaking research, community health outreach, advocacy and programs in more than 30 countries. The donation includes money raised by Account Control Technology, Inc. (ACT) and Convergent employees from local offices located throughout the United States, as well as a corporate match to employee donations and a contribution in honor of ACT Holdings clients.

To reach such a large contribution, the company’s nonprofit ACT Foundation organized a month-long fundraising campaign called “ACT for a Cure” to benefit Komen and improve breast cancer awareness. Offices participated in luncheons, casual days, bake sales, contests, raffles, tournaments and more to promote donations.

The ACT for a Cure campaign was initiated in 2011 by a long-time employee, Jessi Karrer, who selected the cause of breast cancer awareness to honor her grandmother, who had passed away due to the disease. The annual campaign gained tremendous support from company employees, and it has raised a total of more than $145,000 over the past five years.

“Each year, I’ve been amazed by the generosity of our employees and their outpouring of support for this incredible cause,” said Nabil Kabbani, CEO of ACT Holdings. “I’m especially proud that the entire ACT for a Cure initiative was the idea of a single employee, and it has since grown to an annual event improving our company’s teamwork while having a major impact on the communities we serve.”

Demonstrating the initiative’s ongoing support, ACT Holdings employees raised 61.4% more money for the cause in 2015 than in 2014.

“We are pleased to support Susan G. Komen’s work to improve lives and one day end the disease of breast cancer,” said Dale Van Dellen, chairman of ACT Holdings and the ACT Foundation. “With our company’s dedication to service and ongoing charitable support, we continue to show that together, we can do great things.”

“We are so grateful to the passionate employees at ACT Holdings who are committed to making a difference in the lives of people affected by breast cancer,” said Christina Alford, SVP of development for Susan G. Komen. “The funds raised by ACT Holdings employees – more than $51,000 this year alone – will help us fund lifesaving research and offer more options, more hope and more help to families facing the disease.”

ACT Holdings Komen Donation

Front Row –RIGHT to Left: Dale Van Dellen, ACT Holdings Chairman, and Ray Eshghipour, Director of the ACT Dallas office, present checks totaling $51,670 to Komen representatives Kristen Lauck, Michelle Magargee and Judy Salerno, President and CEO; with ACT representatives Amanda Wanoreck, Jessica Bridges (holding check), Gail Davidson, and Rachel Roland (certificate) providing support as additional Komen and ACT representatives (back rows) show their appreciation.

About Susan G. Komen®

Susan G. Komen is world’s largest breast cancer organization, funding more breast cancer research than any other nonprofit while providing real-time help to those facing the disease. Since its founding in 1982, Komen has funded more than $889 million in research and provided $1.95 billion in funding to screening, education, treatment and psychosocial support programs serving millions of people in more than 30 countries worldwide. Komen was founded by Nancy G. Brinker, who promised her sister, Susan G. Komen, that she would end the disease that claimed Suzy’s life. Visit komen.org or call 1-877 GO KOMEN. Connect with us on social at ww5.komen.org/social.

About Account Control Technology Holdings, Inc. (ACT Holdings)

Account Control Technology Holdings, Inc. provides comprehensive business process outsourcing and financial services to diverse industries. Our companies partner with clients to help them run the “business” behind their operations so they can focus on what they do best – whether it’s serving customers, educating students, caring for patients, or keeping communities moving forward. ACT Holdings companies include Account Control Technology, Inc. and Convergent. For more information, visit http://accountcontrolholdings.com.

About Account Control Technology, Inc. (ACT)

Account Control Technology, Inc. is a leader in providing consultative debt management, collection, call center and business office solutions for education, government, commercial and consumer entities. Established in 1990, ACT has been recognized as an Inc. 5000 fastest-growing private company for the past nine years running. The company serves clients nationwide from five office locations: Bakersfield, California; Woodland Hills, California; Mason, Ohio; Dallas, Texas; and San Angelo, Texas. For more information, call 800-394-4228, email info@accountcontrol.com or visit www.accountcontrol.com.

About Convergent

One of America’s largest business process outsourcing firms, Convergent has more than sixty years of history serving a diverse client base with customer care outsourcing services, commercial receivables management and healthcare revenue cycle management. With contact centers located nationwide, Convergent empowers its clients with an innovative combination of an adaptable workflow engine, technology-enabled operations, next-generation analytics and professional services to deliver superior financial performance and high levels of client and consumer satisfaction. For more information, visit www.convergentusa.com.

About the ACT Foundation

The Account Control Technology Foundation is a non-profit, charitable organization established by Dale and Debbie Van Dellen with a stated mission “to improve the future of students and the greater community by offering financial literacy and debt management education, mentorship and support to those in need.” In addition to funding scholarships and supporting charitable causes, the ACT Foundation promotes financial wellness and higher education planning. For more information or to make a donation, visit www.accountcontrolfoundation.org or email foundation@accountcontrol.com.

Account Control Technology Holdings, Inc. Donates $51,670 to Susan G. Komen® and the Fight to End Breast Cancer
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Accounts Receivable Management

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TekCollect Collaborates with Neighborhood Services, Inc. of Columbus for Corporate Drive

November 8, 2015 By admin Leave a Comment

Columbus, Ohio – TekCollect has partnered with Neighborhood Services, Inc. of Columbus to conduct a large corporate clothing drive this past month.

The drive was held for two weeks in October 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 children’s clothing and shoes, as well as adult men and women’s clothing. Neighborhood Services, Inc. was chosen as the local recipient for the donations, as they exist in the effort to alleviate poverty and provides food services, and material assistance to persons in need in the Columbus community.

TekCollect’s collection efforts included 520 clothing items and pairs of shoes.

“TekCollect chose to partner with Neighborhood Services, Inc. because our staff felt strongly that collected clothing should be distributed freely to local community members and families in need, rather than resold or sent out of town,” said Ron Douglas, Executive Vice President for TekCollect. “We are pleased to add Neighborhood Services, Inc. to our community partners, and look forward to more opportunities to work with them as they serve our city.”

Martin Butler, Executive Director for Neighborhood Services, Inc., said, “We are grateful to the TekCollect team for their focus on people in need in our community. So far this year, NSI have distributed 4,810 families a seven day supply of food. And have had 371 families use our clothing room. Without the generous support of businesses like TekCollect, we would not be able to help the most vulnerable in our community.”

About Neighborhood Services, Inc.

Neighborhood Services, Inc. improves the quality of life in the Columbus community by compassionately and respectfully serving neighbors in need. Neighborhood Services, Inc. was founded in 1965 and primarily serves working, low-income families and individuals, unemployed individuals and their families, and single heads of household with young, dependent children in the Columbus community. To learn more, visit www.NeighborhoodServicesInc.org.

About TekCollect

TekCollect provides comprehensive accounts receivable management, collections and customer retention solutions to nearly 30,000 businesses nationwide. The Company partners with business owners 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 business’s valued customer relationships. For more information, visit www.tekcollect.com.

TekCollect Collaborates with Neighborhood Services, Inc. of Columbus for Corporate Drive
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Accounts Receivable Management

Filed Under: News

Third Circuit Gives TCPA Litigants Additional Support

November 1, 2015 By admin Leave a Comment

On October 23, 2015, a Third Circuit Court of Appeals decision gave Telephone Consumer Protection Act (“TCPA”) plaintiffs additional ammunition supporting an expanded definition of an “ATDS.” In Dominguez v. Yahoo, Inc., No. 14-1751, (3d Cir. Oct. 23, 2015), based on the July 10, 2015 Federal Communications Commission (“FCC”) order that expanded the definition of an automated telephone dialing system “ATDS” under the TCPA, the court vacated a prior summary judgment decision in Yahoo, Inc.’s favor.

insideARM previously wrote about this case in October of last year. The facts in the case are not complicated. Dominguez received text messages from Yahoo on his cell phone. The cell phone was a reassigned telephone number. The prior owner of the phone had enrolled the number in Yahoo’s text message system to receive a text notification when he received an e-mail to his Yahoo! account. The consumer alleged that Yahoo used an ATDS to send thousands of unsolicited text messages (nearly 50 to 60 per day for many months) to his cell phone, ultimately totaling 27,809 texts.

The plaintiff filed a putative TCPA class action against Yahoo, alleging a violation of the TCPA.

The TCPA provision at issue is 47 U.S.C. § 227(b)(1)(A)(iii), which prevents…. making “any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any ATDS… to any telephone number assigned to a… cellular telephone service.”

The TCPA defines an ATDS as: “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

Prior to the FCC’s July order, Yahoo had successfully moved for summary judgment. Yahoo’s argument was that the TCPA required an ATDS to actually have a “random or sequential number generator,” which its text-messaging system did not have. Instead, it dialed numbers from a compiled list.

The Third Circuit, however, vacated the prior summary judgment decision. The court cited two reasons in its opinion.

First, it found evidence offered by Yahoo, an affidavit from its expert stating that Yahoo’s text-messaging system did not qualify as an ATDS, was “nothing more than a legal conclusion couched as a factual assertion.” The court then stated, “Because this is an issue of heightened importance in light of the 2015 FCC Ruling, and the District Court did not previously have the benefit of the FCC’s ruling in addressing the issue, remand is appropriate to allow that Court to address more fully in the first instance whether Yahoo’s equipment meets the statutory definition.”

Second, the court felt that the term “capacity” needed further review. The court commented, “Because this is an issue of heightened importance in light of the 2015 FCC Ruling, and the District Court did not previously have the benefit of the FCC’s ruling in addressing the issue, remand is appropriate to allow that Court to address more fully in the first instance whether Yahoo’s equipment meets the statutory definition.”

insideARM Perspective

This case is another blow to the ARM industry and any other business that calls cellular phones. Though the written opinion specifically states, “The disposition is not an opinion of the full Court and pursuant to Internal Operating Procedures of the U.S. Court of Appeals for the Third Circuit (I.O.P. 5.7) does not constitute binding precedent,” you can be certain that this case will be cited in every pending TCPA case (and every case that will be filed in the future).

This case also highlights the potential exposure to businesses in TCPA litigation. The court’s opinion highlights the potential exposure, “A successful plaintiff under the TCPA is entitled to $500 in damages per violation. 47 U.S.C. § 227(b)(3)(B). Therefore, Dominguez stands to win $13,904,500.” The court did not address the potential treble damages if Yahoo was found to have “willfully or knowingly” violated the TCPA, nor the potential exposure if a class was certified. The numbers are staggering.

Third Circuit Gives TCPA Litigants Additional Support
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Accounts Receivable Management

Filed Under: News

DBA International Spells Out Certification Program Requirements

November 1, 2015 By admin Leave a Comment

In February 2013, DBA International launched its Receivables Management Certification Program. This “gold standard” certification program promotes uniform, consumer-oriented, best practice standards for the receivables industry.

The goal of the Receivables Management Certification Program is to raise the bar; not just meet the bar. Since program standards exceed many current statutory and regulatory requirements for the industry, it is essential to apply the program prospectively.

What are the benefits of DBA’s certification program?

DBA’s objective is to include the entire collection cycle, from debt purchase, agency and litigation, into an effective compliance network built on standardized “best practices.” The certification program assures consumers and regulators that certified members monitor, enforce and comply with state and federal laws protecting consumers at every stage of the collection cycle, while also extending to the consumer a reasonable and fair opportunity to remediate their debt.

Banks and Regulators are beginning to acknowledge and respect this program and the companies that are certified stand to receive special recognition and respect in a heavily scrutinized environment. DBA Certified Companies are increasingly only doing business with other DBA Certified companies in an effort to limit their risk and exposure in a heavily scrutinized environment.

Find out which DBA member companies have received Receivables Management Certification here.

Why does DBA certify companies?

By establishing uniform, national, best practice standards, DBA ensures that its certified members exceed the consumer protection requirements of state and federal law.

What is the benefit of certification to those who work or interact with the financial industry?
Banks and other issuers recognize the value of compliance integration, which comes from working with debt buying companies, law firms and collection agencies that hold a unified set of consumer-oriented, industry best practices. Consumers who communicate with certified companies have the assurance of knowing they uphold the industry’s highest standards and place a premium on transparency in all facets of the consumer-interaction process.

Companies that have completed the certification process note the confidence gained through excellent control over their business processes, resource expenditures and performance results and measurements.

What does DBA do to ensure that its process is up-to-date and relevant?

The Receivables Management Certification Program requires a mandatory annual review of the program requirements to ensure they evolve with industry best practices and incorporate any new statutory, regulatory and judicial developments.

What types of compliance audits do companies undertake and when do the audits take place?
From the self-compliance audit prior to submitting the certification application to on-going external audits throughout the program, the first of which takes place within two years of initial certification, consumers are provided assurances that the company is complying with the high standards outlined in the certification program. Certified DBA member companies undertake the following types of audits:

Self-Compliance Audit – Performed prior to the initial application and every two years thereafter when reapplying for certification. Companies must attest to the self-compliance audit on initial application and will be subject to independent third party verification.
Full Compliance Audit – Performed by an independent third party auditor prior to the first certification renewal period (year two), and then every three to four years thereafter.
Limited Compliance Audit – Performed by an independent third party auditor in response to specific and credible third party allegations of non-conformity to the standards. The Certification Audit Committee can perform a Limited Compliance Audit at any time.

How does the certification program benefit the industry in the long run?

The certification program demonstrates to regulators, creditors and consumers that the industry is self-regulating and holds itself to a higher standard. The legislative and regulatory communities view the program positively which opens the doors of communication and gives DBA International a seat at the table in discussions on proposed laws, rules and regulations. Banks and other issuers recognize is the value of the certification program and integrate all or most of the program requirements into their due diligence process.

Regulatory trends require the cross-discipline network compliance established in DBA’s Receivables Management Certification Program. Recent enforcement activities and consent decrees confirmed the necessity for all credit-cycle participants to be in compliance alignment to ensure consumer protections and reduce the risk of a violation. The integrated compliance standards outlined in DBA’s certification program moves the entire industry forward while providing appropriate consumer protection.

Find more information about the Receivables Management Certification Program here.

____

Editor’s note: insideARM is an authorized provider of certification credits. Those items that qualify include this notice: “This product is approved for DBA International Certification Credit.”

DBA International Spells Out Certification Program Requirements
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Accounts Receivable Management

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Four Important Questions to Ask About Your Predictive Score

November 1, 2015 By admin Leave a Comment

Jason Horsley
LexisNexis

Predictive modeling allows companies to leverage data in order to forecast probable outcomes and trends.

In a very real sense, they are a key element to strategy decisions across industries — and they only continue to strengthen with the advent of big data and ever-improving technology.

The collections market has gotten smarter about deploying these modeling scores, and has come to rely on them to set various business and operational strategies:

Prioritizing call campaigns,
Assigning treatment strategies
Setting cost per account budgets.

Because agencies are placing such great importance on these numbers, confirming these scores has never been more important.

Like collecting or skip tracing, the practice of model-building is part science and part art. For that reason, not all model builders will produce the same outcome for a given problem. However, with the proper data, technology and domain expertise, a predictive model should become invaluable to any collection operation. While building such a model can be outsourced, agencies should take a second look at internal ownership of validating their models, ensuring that they’re still providing the expected business value to the agency.

Once a score has become a strategic linchpin, putting it on auto-pilot is a mistake. With the rapid evolution of both modeling techniques and market conditions, nurturing your score and how it is used is an essential component to any business that values continuous improvement.

No one decision maker has full control over consumer behavior; it is important to recertify your predictive model to make sure the analytic solution effectively measures relevant consumer behaviors. Consumers may or may not change over time, but by re-validating an existing model or re-modeling all together, the consumer, changed or not, will be better understood. With renewed understanding, consumers will slide along the propensity to pay continuum and your strategy will therefore become more effective.

If your existing score is on auto-pilot for at least a year, lumped in as part of a package, underutilized or heavily relied upon to drive strategy, then it is time to validate your score and restore your confidence in its value. Good scores are worth their cost many times over, while bad, outdated and misused scores are detrimental to your profitability.

Prior to testing, you will need to make several decisions to properly set up your test design.

Ask yourself these four questions:

Am I testing a model that has just been developed or am I validating an existing model?
Do I have performance data?
Will I be comparing the performance of multiple models?
Should I do a retrospective test or real time test?

Your answers will lead to:

(Re)validation or (Re)development
With or Without Performance Data
Champion-Challenger or No Incumbent
Retrospective or Real-Time

If you are testing a new model and have performance data for a retrospective test, but are not comparing to another model, then your test design will look much different from validating an existing model in a real-time test against another model.

Here are three scenarios:

Validation, With Performance Data, No Incumbent, Retrospective

The agency selects a group of accounts that have been worked in an active collections campaign.
The agency collects and appends some collection disposition from the account, for example, whether the account holder repaid the debt and how much they paid.
Next, they send the account information, account holder information and collections disposition to a score provider.
The score provider would validate the account against an existing scoring model, generate a new “custom” scoring model or would apply advanced analytics to an optimized strategy.
With both the performance data and the score, the score provider can conduct a complete analysis showing performance results such as, score distribution tables, dollars collected capture rates by score, unit paid rates by score and workflow strategies using score and placement balance.

Validation, Without Performance Data, No Incumbent, Retrospective

The agency selects a group of accounts that have been worked in an active collections campaign.
The agency forwards basic account information for this group of accounts to the score provider.
The score provider runs the accounts through the scoring model and appends assigned score.
Since no performance data had been provided, the score provider can only partially complete an analysis.
That partial analysis might include such things as score distribution, attribute distribution and regional analysis.
Additionally, the same analysis could be conducted on high-value sub-populations.
The agency can either forward performance data once they have reviewed the initial score analysis or they can conduct the remaining analysis independent from the score provider.

Validation, Without Performance Data, Champion-Challenger, Real-time

The agency selects a group of accounts that they plan to work.
The agency forwards basic account information for this group to the score providers (same accounts sent to each provider).
The score providers run the accounts through their respective scoring models and append assigned score.
When all the scores are returned, the agency begins working the accounts in accordance to Champion-Challenger test plan (plan to compare an existing strategy to a new strategy).
The test plan should include specific goals (i.e. outperform existing score by increasing liquidation rate by X%), details of the new approach, sample size, timeline and success criteria.
Usually, the test is conducted on a small percentage of the agency’s portfolio.
This approach minimizes possible negative impacts and positions the agency to either conduct further tests, continue testing on a larger scale or commit to one of the strategies.
With a solid plan in place, the test will be easily executed and the results will be more informative.
The accounts are worked without using the scores.
At the 30/60/90 day mark, the actual performance of the accounts is compared to the predicted performance of each score.

For many agencies, maintaining organization confidence in their predictive score is a challenge. That difficulty often leads to blind use, half-hearted use or discontinued use. But this doesn’t have to be your story because while score testing may seem daunting, it can be done with relative ease with the right resources in place. Elite score providers, like LexisNexis Risk Solutions, can either be that resource or support agency resources to get the job done. Make today the day you commit to determining if your score is an anchor dragging down your business or a propeller that will drive your business forward.

Four Important Questions to Ask About Your Predictive Score
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Accounts Receivable Management

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MDHBA Honors Its Best At Annual Conference in Newport Beach

November 1, 2015 By admin Leave a Comment

Elmhurst, IL — The Medical-Dental-Hospital Business Associates (MDHBA) presented several awards during its Reception, Silent Auction and Dinner on Friday, October 23, at its Annual Conference at the Island Hotel, Newport Beach, California.

Then MDHBA Lauren Regnani, CPBE, CPAS, General Credit Service Inc, Medford, Oregon, oversaw the ceremonies. During the program, MDHBA’s new officers were sworn in and Regnani became Immediate Past President.

CMRE Financial Services, Inc., Brea, California, received the Lifetime Achievement Award from the association in recognition of the company’s contributions as a leader and voice for the accounts receivables management industry.

The Robert T. Hellrung Award was presented to Mary Inscore, president, CSO Financial, Inc., Roseburg, Washington. The Hellrung award recognizes individuals for their contributions to the medical economics profession and to MDHBA.

Porter Heath Morgan, general counsel, BC Services, Inc., Longmont, Colorado, received the President’s Award. The President’s Award is presented annually by the current MDHBA president to recognize an individual or individuals who did the most to advance MDHBA’s interests during his or her tenure as president.

MDHBA’s next Annual Conference will take place Oct. 27-28, 2016, in Annapolis, Maryland.

Medical-Dental-Hospital Business Associates is the healthcare ARM community for accreditation and networking. Formed in 1939, MDHBA and its members set a tone of collaboration and continuous improvement within the demanding and competitive world of healthcare financial services. MDHBA provides a nationwide forum for idea exchange, continuing education and certification. For more information visit www.mdhba.org.

MDHBA Honors Its Best At Annual Conference in Newport Beach
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Accounts Receivable Management

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Department of Education Announces New Student Loan Regulations

November 1, 2015 By admin Leave a Comment

The Department of Education (ED) announced earlier this week two final regulations they say will protect students from unreasonable fees, safeguard taxpayer dollars and expand the income-based repayment plan to millions of Americans.

Addressing Student Loan Debt

In June of 2014, President Obama issued a Presidential Memorandum directing the Department of Education to propose regulations to ease the burden of student loan debt. Today’s publication of the Revised Pay As You Earn (REPAYE) Plan regulations responds to that directive by expanding repayment options to allow an additional five million Direct Loan borrowers to cap their monthly student loan payment amount at 10 percent of their annual income allocated per month, without regard to when the borrower first obtained their loans. The Department announced the proposed regulations earlier this year. In addition, the final regulations also include:

Starting in 2016; an expansion of the circumstances under which institutions may challenge or appeal a cohort default rate that appears artificially high because of a corresponding low rate of student borrowing;
Starting July 1, 2016; new procedures for FFEL Program loan holders to identify servicemembers who may be eligible for a lower interest rate under the Servicemembers Civil Relief Act (SCRA), enabling these borrowers to receive this important benefit automatically.
A requirement that guarantors provide information to FFEL Program borrowers on repayment plans available to them after they rehabilitate their defaulted loans, to help ensure that borrowers have a smoother transition to regular repayment. This section of the regulations will be implemented July 1, 2016.
And a provision to allow lump-sum payments made on behalf of borrowers through student loan repayment programs administered by the Department of Defense to count toward Public Service Loan Forgiveness, similar to the application of lump sum payments for Peace Corps and AmeriCorps volunteers. This action assures that these borrowers benefit more fully from their public service employment.

The new REPAYE repayment plan will be available to borrowers starting this December. ED has posted more information about the program at www.StudentAid.gov/IDR.

Addressing the Use of Debit and Prepaid Cards on Campus

According to the release, recent changes in the higher education marketplace have led to the proliferation of campus debit and prepaid cards offered to students in exchange for monetary benefits to schools. The Government Accountability Office (GAO) and the U.S. Public Interest Research Group (USPIRG) have stated that institutions enrolling approximately nine million students—about 40 percent of all college students—have debit or prepaid card agreements. The Department estimates that nearly $25 billion dollars in Pell Grant and Direct Loan program funds are annually released to students at institutions using these accounts. The Department proposed the Cash Management regulation in May.

Under the final regulations, students will be able to freely choose how to receive their Federal student aid refunds, student will be given objective and neutral information about their financial aid disbursement options, and they will no longer be forced to pay excessive fees to access their Federal student aid, including Pell Grants. They will also:

Require institutions to give students greater choice about how to receive their student aid.
Prohibit institutions from requiring students or parents to open a certain account into which their student aid refunds are deposited.
Require institutions to ensure that students are not charged excessive and confusing fees (e.g., overdraft fees and transaction-swipe fees) if a student selects an account offered directly or indirectly by contractors that assist institutions in making direct payments of Federal student aid.
Require an institution to provide students with a list of account options that the student may choose from to receive their student aid refunds, where each option is presented in a neutral manner and makes clear that the student can have their student aid deposited to their preexisting bank account.
Require institutions to ensure that electronic payments made to a student’s preexisting account are made as timely as, and no more onerous to the student than, payments made to accounts marketed through the institution.
Allow institutions to share limited student information with third-party servicers that offer financial products to allow the continued functioning of disbursement processes, while also protecting private student information, such as Social Security numbers or portions thereof.

insideARM Perspective

These regulations are released amidst a great deal of turmoil in the student loan industry.

The Department of Education debt collection contract remains in limbo. In October of last year ED announced the award of 11 contracts under the small business set-aside program. Yet, 12 months later no business has been placed to those 11 contractors under that new contract. Complicating things is the fact that in February of this year ED announced that it was ending contracts with five student loan collection agencies. Two of those agencies were included in the 11 that were awarded new contracts back in October. Litigation regarding those terminations is still pending. On the unrestricted size side of the equation, there are still approximately 40 companies that had proceeded to Phase II of the RFP process. Three of those companies were part of the February announcement. Theoretically all of the agencies that had moved to Phase II are still in the running for the new contract. In a nutshell: The ED contract/RFP process is far from settled.

Meanwhile, in September the CFPB released a report detailing its findings and recommendations to reform student loan servicing; the report resulted from a request for information issued earlier in the year. The process continues over there as well.

Department of Education Announces New Student Loan Regulations
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Accounts Receivable Management

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CFPB Fines Auto Loan Company $3.28 Million For Illegal Debt Collection Tactics

November 1, 2015 By admin Leave a Comment

The Consumer Financial Protection Bureau (CFPB) announced yesterday that it has filed an administrative order against Security National Automotive Acceptance Company (SNAAC), an auto lender specializing in loans to servicemembers, for engaging in illegal debt collection practices. The order requires the company to refund or credit about $2.28 million to servicemembers and other consumers who were allegedly harmed, and pay a penalty of $1 million. A separate court order bans SNAAC from using aggressive tactics, such as exaggeration, deception, and threats to contact commanding officers, to coerce servicemembers into making payments.

SNAAC, LLC is an Ohio-based auto finance company that 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 sued SNAAC in June 2015. When consumers defaulted on their loans, the CFPB alleged, SNAAC used aggressive collection tactics that took advantage of servicemembers’ special obligations to remain current on debts. Both active duty and former servicemembers could encounter trouble with the company if they missed or were late on payments. Once servicemembers defaulted, they became subject to repeated threats to contact their chain of command. In many other instances, the company exaggerated the consequences of not paying. Thousands of people were victims of the company’s aggressive tactics. Specifically, the CFPB alleged that the company:

Exaggerated potential disciplinary action that servicemembers would face: The CFPB alleged that the company routinely exaggerated the potential impacts of a delinquency on servicemembers’ careers. The company told customers that their failure to pay could result in action under the Uniform Code of Military Justice, as well as a number of other adverse career consequences, including demotion, loss of promotion, discharge, denial of re-enlistment, loss of security clearance, or reassignment. In fact, these consequences were extremely unlikely.

Contacted and threatened to contact commanding officers to pressure servicemembers into repayment: The company buried a provision within the fine print of contracts saying that it could contact commanding officers about servicemembers’ debts. The company suggested that the servicemembers were in violation of military law and other regulations and threatened to notify their commanding officers about the purported violations.

Falsely threatened to garnish servicemembers’ wages: The company implied to consumers that it could immediately commence an involuntary allotment or wage garnishment. But such consequences could not or would not occur because, through the military pay system, involuntary allotments are only processed once a judgment by a court is obtained. The company would threaten to pursue an involuntary allotment before it had even determined whether the servicemember would be sued.

Misled servicemembers about imminent legal action: In many instances, the company threatened to take legal action against customers when, in fact, it had not determined whether to take such action.

Enforcement Action

Pursuant to the Dodd-Frank Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. Under the terms of the administrative order filed today and the separate court order, SNAAC will be required to:

Provide about $2.28 million to thousands of harmed servicemembers and other consumers: SNAAC must identify the affected consumers and provide credits or refunds. The amount that each consumer receives will correspond to the amount of debt they were allegedly unlawfully pressured into paying. The company must submit a written plan to the CFPB for approval detailing how the company will identify and provide relief to the thousands of affected consumers.

End threats to contact commanding officers: The company cannot contact or threaten to contact a servicemember’s chain of command in order to pressure the servicemember to pay, and it may not disclose a servicemember’s debt to a commanding officer or employer.

End misstatements about potential disciplinary action: The company cannot tell servicemembers that their delinquency or default constitutes a violation of military law or regulation and that not paying could result in negative impacts on such things as their careers or security clearance.

End false threats of legal action against a consumer: The company cannot tell consumers that it is taking legal action unless it intends to take such action.

End false threats of garnishing wages: The company cannot tell consumers it will garnish their wages unless it has a judgment from a court permitting such garnishment.

Pay a civil monetary penalty of $1 million: SNAAC will pay $1 million to the CFPB’s Civil Penalty Fund.

The administrative consent order is available at: http://www.consumerfinance.gov/f/201510_cfpb_consent-order-administrative-snaac.pdf

The district court consent order is available at: http://www.consumerfinance.gov/f/201510_cfpb_consent-order-district-snaac.pdf

The CFPB’s allegations in the lawsuit can be found at: http://files.consumerfinance.gov/f/201506_cfpb_complaint-security-national-automotive-acceptance-company.pdf

SNAAC has neither admitted nor denied the allegations of the complaint.

CFPB Fines Auto Loan Company $3.28 Million For Illegal Debt Collection Tactics
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Massachusetts Proposes New Debt Collection Legislation; Creditors Should Take Note

November 1, 2015 By admin Leave a Comment

Massachusetts Attorney General Maura Healey’s Office offered support this week for proposed legislation that would provide greater protections and relief for consumers in her state who are pursued by abusive debt collectors. Her office testified before the Joint Committee on Financial Services today in favor of the Family Financial Protection Act (FFPA), filed by Senator James Eldridge and Representative Paul Brodeur. The bill addresses a number of problematic practices in the debt collection industry that have resulted in consumers being sued on the basis of inaccurate information for debts they do not owe.

“The Act provides desperately needed relief to the poorest and most vulnerable Massachusetts citizens,” said Consumer Protection Division Chief Max Weinstein who offered today’s testimony before the committee.

When a borrower has not made a payment in months, or years, the original creditor declares the account a loss. Debt buyers purchase old debts for pennies on the dollar, and pursue payments of the entire amount supposedly due on the account.

“Debt buyers pursue consumers for debts they do not owe, or seek to collect more than a consumer actually owes. Debt buyers pursue consumers for debts that are beyond our statute of limitations. Perhaps most troubling of all, debt buyers target the most vulnerable of our fellow citizens, the elderly, the disabled, and the desperately poor,” according to the testimony.

The AG’s Office regularly receives complaints from Massachusetts residents about the debt collection industry, and since 2006, has averaged approximately 1,300 complaints annually. A recent analysis by the Urban Institute demonstrated that 23 percent of Massachusetts residents – more than one and a half million people – have a debt in the collection process on their credit report.

In just the past few years, collectors have sued hundreds of thousands of Massachusetts consumers, many of whom work minimum wage jobs, live on a fixed-income, are disabled, or are elderly. Some of them cannot appear in court to dispute the debt, and many cannot afford legal representation.

Existing law provides a six-year statute of limitations on debts, allows consumer payments to “revive” the limitations period (leading collectors to pursue debts that are sometimes more than 10 years old), calls for the charging of 12 percent interest post-judgment, and enables judgments to be enforced for up to 20 years.

The FFPA’s key protections would address these problems:

Statute of limitations: The statute of limitations would be decreased to three years on consumer debt actions.
Protecting consumer income: The amount of net earnings protected from wage garnishment would be increased to $720 per week. Presently, state law exempts wages of only $450 a week from garnishment by debt collectors.
Expiration of right to collect: The right to collect on a debt after the statute of limitations has expired would be extinguished.
Period for collection on judgment: A collector would only have five years to execute and collect upon a judgment.
Post-Judgment Interest Rate: Instead of allowing current 12 percent post-judgment statutory interest rate for consumer debt collection cases, the FFPA would be fixed to reflect current interest rates, which are now at historic lows. Massachusetts currently has one of the highest post-judgment rates in the country.
Arrest warrants: The Act would prohibit debt collectors from seeking civil arrest warrants.

insideARM Perspective

The quote from the AG office’s testimony, “Debt buyers pursue consumers for debts they do not owe, or seek to collect more than a consumer actually owes…” is quite a broad generalization, offering no facts to support the statement. While it is true that there these things happen, using anecdotal examples to support legislation that has a broad effect is likely to produce unintended consequences.

This proposed Massachusetts legislation cuts the statute of limitations in half, and makes it illegal to even collect (not sue, but collect) on a debt after that time has passed. It also reduces the period to collect on judgments by 75%. This would have a significant impact on creditors and their actions to collect.

This past summer, Illinois passed new debt collection rules that, evidently, nobody in the industry saw coming. Illinois Public Act No. 227 was quietly signed into law on August 3, 2015. It containing several substantive updates to the Illinois Collection Agency Act (ICAA), and especially affected creditors.

Finally, as reported today by ACA International, leaders from its New York Unit met earlier this week with New York regulators and learned that they too are considering legislation to reduce the statute of limitations in their state.

New York is an example of a state where the ARM industry has been actively engaged. To highlight a few examples in addition to ACA’s efforts, DBA International hosted a symposium with New York regulators earlier this year, and the Consumer Relations Consortium has met multiple times with the Department and also submitted proposed FAQs, some of which have been adopted.

Massachusetts Proposes New Debt Collection Legislation; Creditors Should Take Note
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Florida Court Holds Voicemail Mail Message Asking Return Call Can Be Debt Collection Communication

November 1, 2015 By admin Leave a Comment

The U.S. District Court for the Middle District of Florida recently denied a motion to dismiss an amended complaint alleging that a time-share association violated the Florida Consumer Collection Practices Act (FCCPA) and the federal Telephone Consumer Protection Act (TCPA), holding that:

A debtor need not use any precise language or magic word to notify a debt collector that the debtor is represented by legal counsel with respect to a debt;

A voicemail message merely asking the debtor to return the call to discuss the debt was a debt collection communication; and

Declaratory relief may be available under the TCPA.

A copy of the opinion is available at: Link to Opinion.

A man and a woman owed time-share maintenance fees and retained counsel, who allegedly sent a letter to the time-share association requesting that any future communication regarding the debt be directed to counsel. The letter allegedly also revoked any prior consent to call the woman’s cell phone and enclosed a limited power of attorney for the man.

The time-share association then supposedly sent to the man, over a period of four months, 13 e-mails trying to collect the debt, called his cell phone at least eight times and called the woman’s cell phone at least five times using an automatic telephone dialing system (ATDS). The association also supposedly sent a billing statement addressed to both the man and woman.

The plaintiffs sued, alleging violations of the FCCPA and the TCPA. The time-share association moved to dismiss.

No Precise Language Needed for Notice of Representation by Counsel

The Court first addressed the FCCPA claims, noting that subsection 559.72(18) of the FCCPA “prohibits a debt collector from ‘[c]ommunicat[ing] with a debtor if the person knows that the debtor is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address.’”

The Court rejected the time-share association’s “hypertechnical” argument that because the word “debt” did not appear in the attorney’s letter, it did not put the time-share association on notice that plaintiffs were represented as to the debt.

The Court noted that the word “debt” was, in fact, mentioned in the letter, but even if it was not, the Court reasoned that “there is no requirement that a debtor use any precise language or magic word to notify a debt collector that the debtor is represented by legal counsel with respect to a debt.” The Court held that the language of the letter and context were enough under the circumstances to convey the message that the plaintiffs had counsel with respect to the debt.

The Court also found that the voicemail message left on the plaintiffs’ cellular phones requesting that either the man or woman return the call to discuss the debt constituted prohibited “indirect communications” under both subsections of the FCCPA.

The Court then turned to whether the complaint stated a claim under FCCPA subsection 559.72(7), which “prohibits a debt collector from ‘[w]illfully communicat[ing] with the debtor or any member of her or his family with such frequency as can reasonably be expected to harass the debtor or her or his family, or willfully engag[ing] in other conduct which can reasonably be expected to abuse or harass the debtor or any member of her of his family.”

The Court rejected as meritless the time-share association’s argument that the complaint failed to state a claim under subsection 559.72(7) of the FCCPA because only conduct specifically mentioned in section 1692d of the federal Fair Debt Collection Practices Act (FDCPA) can form the basis for plaintiffs’ claim and they did not allege any such conduct. The Court reasoned that “[a]lthough interpretations of the FDCPA are helpful where the statutes closely mirror one another, ‘the laws are not identical, and this Court must be conscious of the differences between the two.’ ” Moreover, the FCCPA “intentionally left out any such list … [and] this list is not even exclusive under the FDCPA.”

Based on the “twenty-seven specific contacts, plus many more of which they believe Defendant has evidence, in conjunction with Defendant willfully contacting Plaintiffs after they had retained legal representation,” the Court found that the plaintiffs’ allegations “are sufficient and supported by more than conclusory allegations” and, “[t]aking all inferences in favor of Plaintiffs, the Amended Complaint sufficiently states a claim under subsection 559.72(7).”

Turning to the TCPA claim, the Court noted that the Act imposes “[r]estrictions on use of automated telephone equipment … and provides a damages remedy for cellular-phone subscribers who receive autodialed phone calls without having given prior express consent to receive such calls.”

The parties agreed that the male plaintiff gave his consent to call his cell phone. The issue was whether he sufficiently alleged revocation of consent. Relying on the Eleventh Circuit’s decision in Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Circ. 2014), the Court concluded that the amended complaint sufficiently alleged that the attorney’s letter of representation revoked consent and that the plaintiffs “have also sufficiently stated a claim for a willful or knowing violation of the TCPA.”

The Court rejected the time-share association’s argument that “Plaintiffs cannot plead declaratory relief as a remedy but must instead plead it as a separate cause of action” because the “FCCPA expressly provides that declaratory relief may be pleaded as a remedy” and, as to the TCPA, “declaratory relief is available under 28 U.S.C. § 2201.” Moreover, the Court noted that “[d]efendant has provided no authority supporting its argument that declaratory relief under the TCPA requires a separate cause of action.”

Finally, the Court disagreed with the time-share association’s argument that even if the plaintiffs could plead declaratory relief as a remedy, they lacked standing because as a precondition to declaratory relief “a plaintiff must allege facts from which it appears there is a substantial likelihood that he will suffer injury in the future.” The Court found that the plaintiffs had “sufficiently alleged likelihood of injury in the future…” because the amended complaint expressly alleged that the defendant “continues” to attempt to collect the debt, which is sufficient at the pleading stage to allege a likelihood of future injury.

The Court denied the defendant’s motion to dismiss and motion to strike, and also denied the defendant’s motion for leave to file a reply.

Florida Court Holds Voicemail Mail Message Asking Return Call Can Be Debt Collection Communication
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