Archives for December 2015

Seven Critical Steps to Prepare for a CFPB Examination

December 13, 2015 By Leave a Comment

2015-12-cover-baker-tilly-whitepaper-7-things-cfpb-examThe CFPB has a very broad mandate to regulate the consumer financial market, with the authority to both set the rules and enforce compliance with those rules. The Bureau also has the authority to levy fines against debt collection agencies, collection law firms and debt buyers for violations of consumer protection laws, and a number of its fines have been for millions of dollars.

With that said, Debt collection companies can take a number of steps to prepare for a CFPB examination:

  1. This Is an Open-Book Test. Does Your Organization Have the Book?
  2. Catch up on Current Events
  3. Get All Hands on Deck
  4. Heal Thyself
  5. Take the Consumer’s View
  6. Prepare Your People
  7. Treat the Examiners Well

Learn more about these steps by downloading the report. They may make the difference between a passing and failing grade!

Seven Critical Steps to Prepare for a CFPB Examination
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Accounts Receivable Management

Filed Under: News

Debt Buyer Loses Round Two in FDCPA Class Action Case

December 13, 2015 By Leave a Comment

In what appears to be the case that won’t go away, a debt buyer is dealt another blow by the U.S. Court of Appeals for the Seventh Circuit.

In March of 2014 insideARM published an excellent article by Joann Needleman regarding the case McMahon v. LVNV Funding et al, 2014 U.S. App. LEXIS 4592 (7th Cir., 2014). (The article was a reprint of post that originally appeared on the Consumer Financial Services Blog.)

That original opinion held that a letter from a non-attorney debt collector on a time barred debt was false, deceptive, and misleading because it used the word “settlement.”


 

The case made its way back to the Seventh Circuit Court of Appeals on a separate issue. On December 8, 2015 the Court of Appeals issued another opinion, this time on the appeal of a district court decision denying plaintiff’s request for class action certification.

Following the order from the first appeal McMahon moved the district court for class certification. He described his proposed class as follows:

(a) all individuals in Illinois (b) to whom LVNV … (c) sent a letter seeking to collect a debt that referred to a “settlement” (d) which debt was (i) a credit card debt on which the last payment had been made more than five years prior to the letter, or (ii) a debt arising out of the sale of goods (including gas) on which the last payment had been made more than four years prior to the letter (e) which letter was sent on or after February 28, 2011 and on or before March 19, 2012, (f) where the individual after receipt of the letter, (i) made a payment, (ii) filed suit, or (iii) responded by requesting verification or contesting the debt.

The district court was satisfied that the proposed class met the numerosity, commonality,  typicality, and adequacy requirements of Federal Rule of Civil Procedure 23(a) for class action proceeding. But it concluded that the class nonetheless could not be certified, because of what it saw as a failure to meet the requirements of Rule 23(b)(3).

In particular, the court held that issues common to the class did not predominate over issues affecting individual class members. It based this conclusion on the fact that the proposed class includes persons seeking actual damages—namely, those who paid a part of the debt after receiving a dunning letter—and that the case therefore eventually would involve issues of individual causation and damages. The court stated that even if “the amount of damages due each class member is ‘capable of ministerial determination,’ causation, i.e., determining whether class members paid the debt because of the letter, out of moral compulsion, or for some other reason, is not.” And given that the proposed class was estimated to have 3,000 members, the court continued, “the individual issues will dwarf the issues common to the class, making this case unsuitable for class certification.”

McMahon moved the district court for reconsideration of the order denying class certification, but his motion was denied. He then filed his petition for interlocutory review.

Editor’s Note: An interlocutory appeal is an appeal of a specific ruling by a trial court, asking an appellate court to review a significant aspect of a case before the trial has concluded. This type of appeal is an extraordinary action as courts prefer a case proceed to conclusion on its merits and do not like to break up litigation into multiple parts.

The court of appeals disagreed with the trial court and remanded the case back down to the district court……again.

The appellate court wrote: “[T]he need for individual damages determinations does not, in and of itself, require denial of [a] motion for certification. It is well established that, if a case requires determinations of individual issues of causation and damages, a court may “bifurcate the case into a liability phase and a damages phase. (”[A] class action limited to determining liability on a class-wide basis, with separate hearings to determine—if liability is established—the damages of individual class members, or homogeneous groups of class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed.”

insideARM Perspective

This case has twice generated opinions that impact the ARM industry.

The first opinion addressed the troublesome issue of “settlement” language in letters from a non-attorney on out-of-stat accounts.

The second opinion may have an even more dramatic impact.  The Seventh Circuit logic could be viewed as a new standard for class action certification in scenarios where members of a potential class are not homogeneous.  The Court of Appeals rejected the well-reasoned opinion of the Honorable Jorge L. Alonso, District Court Judge.

Debt Buyer Loses Round Two in FDCPA Class Action Case
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Accounts Receivable Management

Filed Under: News

FDCPA Lawsuit Tossed for Failure to Disclose Claim in Bankruptcy Petition

December 13, 2015 By Leave a Comment

Brady Hermann, Maurice Wutscher

Brady Hermann, Maurice Wutscher

The U.S. District Court for the District of New Jersey recently dismissed a debtor’s claims for violations of the federal Fair Debt Collection Practices Act (FDCPA) and the New Jersey Truth in Consumer Contract Warranty and Notice Act (TCCWNA), holding the debtor’s failure to schedule his lawsuit as an asset of his bankruptcy estate deprived him of standing to later assert the claims.

A copy of the opinion in Lewis v. Portfolio Recovery Associates, LLC is available at: Link to Opinion.

In March 2015, the debtor filed a lawsuit alleging the defendant sent him a letter in an attempt to collect a debt that contained a “mini-Miranda” warning in a box entitled “Account Details.” According to the debtor, by mislabeling his legal rights as “Account Details,” the defendant’s correspondence was misleading and designed to confuse the debtor as to the nature of the debt and his rights.

Prior to filing his complaint, however, the debtor filed a bankruptcy petition under Chapter 7 of the Bankruptcy Code. The Chapter 7 trustee appointed to his bankruptcy proceedings issued a report of no distribution. Shortly thereafter, he received a discharge. As a result, the defendant argued that the debtor lacked standing to sue because he failed to schedule the lawsuit as a personal asset.

Debtor Must Disclose Potential Causes of Action as Asset of Bankruptcy Estate

As the Court noted, Section 541(a)(1) of title 11 of the U.S. Code provides that a bankruptcy estate comprises “all legal or equitable interests of the debtor in property as of the commencement of the case.” In re Allen, 768 F.3d 274, 281 (3d Cir. 2014). The scope of Section 511(a)(1) is broad, and includes possible legal causes action. Id. It imposes upon a debtor an ongoing affirmative obligation to disclose all assets and liabilities to the bankruptcy court before discharge, including pending and contingent claims. A failure to list an asset as property of the bankruptcy estate does not prevent it from becoming property of the estate.

As the Court reasoned, once an asset becomes part of the bankruptcy estate, all rights held by the debtor in the asset are extinguished unless the asset is expressly and unequivocally abandoned back to the debtor. As here, when a bankruptcy trustee is appointed in a Chapter 7 case, the trustee becomes the representative of the estate and succeeds to the debtor’s rights to pursue causes of action that are the property of the estate. Thus, once an estate is created, the trustee has sole and exclusive authority to pursue claims on behalf of the estate.

Debtor Lacks Standing for Pre-Petition Claims Not Disclosed in Bankruptcy Proceeding

If a pre-petition claim is properly scheduled and a trustee does not pursue the claim prior to discharge of the bankruptcy petition, that claim is abandoned to the debtor upon discharge. However, in cases where a debtor has not scheduled a pre-petition claim, a discharge order does not cause unscheduled claims to revert back to the debtor. Therefore, a debtor lacks standing to pursue unscheduled claims because they remain property of the bankruptcy estate. Schafer v. Decision One Mortg. Corp., 2009 U.S. Dist. LEXIS 56639, *12 (E.D. Pa. July 1, 2009). In order for a debtor to obtain standing, the trustee must abandon the unscheduled claim, whether voluntarily or pursuant to a court order. 11 U.S.C. § 554(a)-(b).

Here, there was no dispute that the debtor’s claims arose prior to filing for bankruptcy. Accordingly, his claims constituted pre-petition causes of action that had to be listed as assets on the “schedule of assets and liabilities” of his bankruptcy petition.

The debtor argued that his FDCPA and TCCWNA claims were in fact listed in his petition because his bankruptcy petition listed “lawsuits” as a joint marital asset worth $5,000. The Court disagreed, holding that a generic designation of “lawsuits” fails to notify the trustee as to whom the trustee should pursue and what causes of action should be brought.

Accordingly, the Court held that the debtor had not properly listed his FDCPA and TCCWNA claims against the defendant as an asset on his bankruptcy schedules, nor demonstrated that the trustee voluntarily abandoned the claims. Therefore, the FDCPA and TCCWNA claims remained part of the bankruptcy estate and, as a result, he lacked standing to pursue them in his subsequent lawsuit.

FDCPA Lawsuit Tossed for Failure to Disclose Claim in Bankruptcy Petition
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Accounts Receivable Management

Filed Under: News

Negotiating Client Contracts in the New Regulatory World

December 13, 2015 By Leave a Comment

Tim Bauer President, the iA Institute

Tim Bauer
President, the iA Institute

This article originally appeared on The Compliance Professionals Forum site.

Your sales person has just come into your office with a big smile on his/her face.  You just received a commitment from a new client. You should be smiling, but you’re not.  Why is that?

Because now you have to make certain the contract contains key provisions to protect your business.

It used to be that agreeing to the fee was the toughest part of any contract negotiation. Not so anymore! With new regulations and litigation trends, the thoughtful ARM executive needs to be certain that the contractual relationship provides some protections to the agency.

This article is not meant to be exhaustive nor to offer legal advice. You should still consult your attorney prior to executing any contracts.  However, I will offer just a few things to consider.

1)      NY DFS 

You would need to be in hibernation over the last 9 months not to have heard that the New York Department of Financial Services passed new regulations on November 14, 2014 governing debt collectors and debt buyers. Many of the rules are already in effect.  However, some debt verification, disclosure, and communication requirements will go into force on August 30, 2015.

These new rules are incredibly complicated.  In fact, so complicated that the DFS has issued 28 Frequently Asked Questions and Answers. Your contract with your client should address these new regulations.  Perhaps most importantly, your contract with your client should address the client’s ability to substantiate the debt and the “extinguishment” of the debt if substantiation is requested but cannot be provided.

2)      TCPA Concerns

The ARM industry is still reviewing its processes following the publication of the FCC Declaratory Ruling on the TCPA.  What we do know is that the ability of an ARM company to call a cell phone is going to be severely limited.  Any contract with a client should specifically address cell phones and, in a perfect world for a vendors, contain specific representations that a client has express written consent to call a cell number provided by a client and a representation that the client will immediately notify you if the consent is revoked.

3)      Mutual Indemnification Provisions

For years ARM companies have attempted to negotiate contracts to include mutual indemnifications provisions.  Unfortunately, for years those contractual provisions have been difficult (if not impossible) to obtain, particularly from larger, sophisticated clients.  The “take it or leave it’ attitude from those larger clients left agencies exposed.  Hopefully, the issues above will open the door for clients to be more reasonable with indemnification language going forward.

4)  Vendor Management 

Pay particular attention to contract requirements and provisions for vendor management.  As the industry changes and the CFPB provides additional guidance on this topic, what you are being asked to do or not do with your vendors can be an area of concern.

5)  Agency Policies 

Be sure to work with your internal compliance team or the people responsible for creating and implementing your company’s policies.  You need to review contract requirements against your policies to determine no conflicts are created.

6) Insurance Requirements 

Contracts need to be carefully reviewed to insure that the agency meets the requisite insurance requirements.  In the past 3-5 years the minimum insurance requirements have changed dramatically for many clients.

7) On-shore vs. Off-shore work efforts 

Many clients have provisions restricting the use of any off-shore personnel. This can be a problem for companies that may use off-shore or near shore transfer agents or Quality Assurance staff.

As noted above, these 7 items are not meant to be the only key contractual provisions.  However, these are issue that seem to be more prevalent in the past few years.

Negotiating Client Contracts in the New Regulatory World
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Accounts Receivable Management

Filed Under: News

CBE Boosts Charitable Giving in 2015

December 13, 2015 By Leave a Comment

CEDAR FALLS, Iowa – The employees of CBE Companies (CBE) had a banner year in 2015 as charitable efforts increased across the board and increasingly benefitted the communities in which it operates.

The employees of CBE, a business process outsourcing (BPO) company, gave back to their communities through donations, volunteering for local causes and fundraising, setting new marks for generosity in several of its key areas of giving.

CBE combines all of its pay-it-forward initiatives into its CBE Cares program, designed to create opportunities for employees to work together throughout the year in company-sponsored events that encourage giving back to the communities. The program benefits a variety of causes in CBE’s communities of Cedar Falls and Waterloo, Iowa; Overland Park, Kansas; New Braunfels, Texas; and Manila, Philippines.

“Our employees take pride in finding ways to really make an impact in their communities. Their impressive commitment to doing the right thing is evident in the substantial increases in many of our volunteer and charity efforts in 2015,” said Mary Phillips, Chief Human Resources Officer.

CBE Cares extends broad reach in 2015

Each CBE Cares campaign features direct involvement from CBE employees, who form committees to plan and execute the campaigns. Those grass roots efforts lead to broad participation from employees. Throughout 2015, several of CBE’s major campaigns displayed the employees’ giving spirit, including:

United Way

CBE’s annual United Way campaign proved its most successful yet. Employees contributed over $96,000 to local chapters in CBE communities throughout the month of October, a nearly 32% increase over last year’s totals. Fundraising events included contests, auctions, food sales, raffles and more, creating fun and competitive ways for employees to make donations.

Pay It Forward

CBE held its sixth annual Pay it Forward campaign in April.  Employees worked together in teams to select a cause and determine how to make a difference, whether through volunteerism or donations. CBE volunteer efforts included cleaning up a park, helping residents of a retirement community, working with the Boys and Girls Clubs and a children’s hospital, among many other projects. As the Pay it Forward campaign came to a close, it was apparent that team effort created significant impact in the communities.

The Leader In Me

CBE has been a foundation for the Cedar Valley Leader in Me program. The program, derived from Stephen Covey’s 7 Habits of Highly Effective People, develops life skills and self confidence for elementary through middle school students to thrive as leaders in the 21st Century. CBE provides both leadership and financial support for the program.

Partners in Education

CBE has had a long-standing partnership with Lincoln Elementary school to assist with needs of staff and students. In 2015, CBE employees contributed more than $11,100through Partners in Education, more than doubling CBE’s contributions last year. Beyond financial assistance, employees gave of their time to serve at events, as mentors and in a pen pal program.

Casual for a Cause

Employees at each CBE location support local, non-profit organizations each month through CBE’s Casual for a Cause initiative.  Employee contributions allow them to wear jeans at work, while money generated is given to local charities carefully selected by a committee at each CBE location.  In 2015, more than $102,000 (a 51% increase from a year ago) was donated to 14 charities, including Cedar Valley Hospice, Big Brothers/Big Sisters, food banks, schools, women’s shelters and a variety of other organizations.

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. The organization is consistently recognized as a local Employer of Choice. It has also been recognized by Workplace Dynamics as one of Iowa’s Top Workplaces. For more information about CBE Companies, please visit www.cbecompanies.com or call 888-386-0273.

CBE Boosts Charitable Giving in 2015
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Accounts Receivable Management

Filed Under: News

FTC Staff Attorney Gives Advice to Consumers About Communicating with Debt Collectors

December 13, 2015 By Leave a Comment

Debt collectors make up to one billion contacts with consumers each year. It’s their job to make sure they’re collecting from the right people. But sometimes, they reach the wrong person. Other times, they’re actually part of a fake debt collection scam.

If you don’t recognize a debt, here’s what you can do:

Find out who you’re dealing with. Ask for the collector’s name, the company’s name, and its address and phone number. Legitimate collectors will provide this information.

Don’t give additional personal information. The collector might ask you to confirm personal information. If the collector has the wrong information, like an address or phone number you’ve never used, don’t correct the mistake with the right information. And don’t give any other personal information. If it’s not your debt, but the collector now has the right personal information for you, it could be harder for you to dispute the debt later.

Refuse to discuss the debt until you get a “validation notice.”Collectors must send you a written notice. It tells you how much money you owe, the name of the creditor, and what to do if you don’t think you owe the money. This notice might help you figure out if you owe the debt.

Do your own detective work. Reach out to the company the collector says is the original creditor. They might help you figure out if the debt is legitimate – and if this collector has the right to collect the debt. Also, get your free, annual credit report online or at 877-322-8228 and see if the debt shows up there.

Dispute the debt in writing. If you think you don’t owe some – or all – of the debt, or you just don’t recognize it, send the collector a letter disputing it. Be as specific as possible about why you think the debt is wrong – but give as little personal information as possible. Once you get the validation notice, you have 30 days to send this letter.

By law, the collector then must stop contacting you – though the debt doesn’t go away. But, if the collector sends you written verification of the debt, they can start contacting you again.

And, if there’s incorrect information on your credit report, dispute that, too. You can use these sample letters, using the address given in your credit report.

For more, see our debt collection page.

insideARM Perspective

This sounds awfully familiar. Last month, timed to coincide with the FTC’s third Debt Collection Dialogue in Atlanta, the Consumer Relations Consortium released a joint education piece with consumer group Consumer Action, entitled “When a Collector Calls: An Insider’s Guide to Responding to Debt Collectors.”

We are pleased to see alignment with the FTC on how consumers can approach communicating with legitimate collectors, and how to recognize scams.

FTC Staff Attorney Gives Advice to Consumers About Communicating with Debt Collectors
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Accounts Receivable Management

Filed Under: News

Executive Change: First National Collection Bureau, Inc. Appoints Issa Moe as General Counsel and Chief Compliance Officer

December 13, 2015 By Leave a Comment

SPARKS, NV – FNCB, Inc., a national accounts receivable management firm servicing Fortune 500 brands and small businesses, today announced the appointment of Issa Moe as the company’s General Counsel and Chief Compliance Officer.  Moe will report to Chief Executive Officer, Bradley Jardon, and will upgrade the company’s efforts to meet all state and federal regulatory requirements in managing billions of dollars of accounts for clients annually.

Issa Moe

Issa Moe

“FNCB has a genuine and unwavering commitment to ensuring that our employees and those around the industry are accountable to American consumers,” said Issa Moe, General Counsel and Chief Compliance Officer of FNCB, Inc.  “I’m excited to have the opportunity to work with a management team willing to be bold and lead by example with clear and strong standards of conduct.”

“Issa brings a wealth of law firm experience and a strong vision to further FNCB as an industry leader in best practices, transparency and compliance,” said Bradley Jardon, Chief Executive Officer of FNCB, Inc.  “We believe that bringing Mr. Moe’s level of expertise and specialized legal background to the position is essential given the intense scrutiny our industry faces from local, state and federal regulatory agencies.”

“We are pleased to welcome Issa to the executive management team and have no doubt he will help us exceed client expectations and raise the industry bar with regulatory and legal requirements,” said Scott Carroll, Chief Operating Officer of FNCB, Inc.

Prior to FNCB, Inc., Moe was an attorney for Moss & Barnett’s creditors’ remedies & bankruptcy team, where he worked alongside John Rossman, one of the nation’s leading authorities on debt collection law.  Moe and Rossman provided litigation defense and regulatory and compliance counsel.  Previously, Moe worked for Irell & Manella and Troutman Sanders; his expertise is in representing companies, creditors’ committees, unsecured and secured creditors, trustees, and other parties-in-interest in bankruptcy proceedings, restructurings, and litigation.  He has extensive experience defending claims under the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), Telephone Consumer Protection Act (TCPA), and similar state statutes.

Moe is licensed to practice law in state and federal courts in California and Minnesota.  He received his juris doctor degree from the University of Pennsylvania, where he graduated cum laude, and his bachelor’s degree from the University of Virginia.

About FNCB, Inc.

Founded nearly thirty years ago, FNBC, Inc. is a leader in third-party collections providing diversified solutions for clients.  Based in Sparks, Nevada, the executive management team has more than 160 years of combined industry experience.  FNCB, Inc.’s collection strategies are based on compliance to drive performance and enhance the customer experience.

Executive Change: First National Collection Bureau, Inc. Appoints Issa Moe as General Counsel and Chief Compliance Officer
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Accounts Receivable Management

Filed Under: News

Missouri AG Koster Proposes Reforms to Debt-Collection Practices

December 6, 2015 By Leave a Comment

Yesterday Missouri Attorney General Chris Koster joined forces with Legal Services of Eastern Missouri, Legal Aid of Western Missouri, Legal Services of Southern Missouri, and Mid Missouri Legal Services to propose reforms aimed at curbing what he describes as “abusive debt collection lawsuits in Missouri.”

In a letter addressed to the Missouri Supreme Court’s recently formed Commission on Racial and Ethnic Fairness, Koster called for changes to court rules in an effort to prevent unscrupulous collection practices. The changes, wrote Koster, “would advance the Court Commission’s efforts as well as the Calls to Action recommended by the Governor’s Ferguson Commission.”

In his letter to the Commission, Koster outlined three proposed amendments to Missouri’s rules of civil court procedure aimed at curbing the alleged abusive litigation practices:

  1. Require debt collectors to produce documentary proof at the outset of litigation establishing their right to pursue collection of the debt in question. This would help prevent invalid lawsuits.
  2. Preclude debt buyers from manipulating court procedures with stalling tactics in which they repeatedly request consumers to appear in court hoping to obtain a default judgment the first time the consumer misses a court date. This tactic permits debt collectors to recover on debt without presenting evidence to the court or allowing the targeted consumer to challenge that evidence. The proposed change would protect consumers by limiting the circumstances in which a default judgment could be granted.
  3. Strengthen the proof needed before creditors can recover attorneys’ fees and litigation costs by requiring that creditors’ attorneys attest that the fees sought were contractually authorized, necessary, and actually performed to recover on the debt, and that costs claimed were legitimate. This would temper unjustified and excessive awards of attorneys’ fees and litigation costs.

Koster also announced that his office had filed new proposed consumer protection regulations to target similar types of abuse in the industry. Specifically, those regulations would deem it unlawful to file suits on time-barred debt or to try and trick a consumer into unwittingly reaffirming a debt. Enforcement actions for violating the rules could include criminal lawsuits or civil suits brought by the Attorney General’s Office or private counsel.

In support of his argument for change Koster highlights an article that was recently published in ProPublica entitled The Color of Debt: How Collection Suits Squeeze Black Neighborhoods (ProPublica, October 8, 2015). insideARM discussed that article in an October 14, 2015 story on “Disparate Impact.”

In the letter, Koster also referenced publicly traded debt buyer PRA Group (PRAA) and a case that made national headlines in May of this year. insideARM wrote about that case on May 15th. See Jury Sends Message to Debt Buyer. In that case a jury awarded Guadalupe Mejia $251,000 in compensatory damages and $82,999,000 in punitive damages for her counter-claim against the Portfolio Recovery Associates, LLC., a wholly owned subsidiary of PRAA, alleging malicious prosecution and impermissible collection practices.

insideARM Perspective

The action by Attorney General Koster highlights many of the major “hot buttons” in today’s debt buying and legal collection industries.  They are highlighted in almost every regulatory dialogue or enforcement proceeding:

1)     Chain of Title Concerns

2)     Out-of-stat debt

3)     Meaningful Attorney Involvement – Attorney Review of Files

4)     Abuse of the legal process, including

  • Dramatic increase in number of collection suits filed
  • Lack of documentation
  • Sewer Service
  • Default Judgment process

5)     Disparate Impact of collection practices

The ARM industry must deal with these issues head-on in the coming months. As the ability to communicate with consumers regarding delinquent accounts becomes more difficult, litigation is often the only alternative. With CFPB rulemaking on the horizon, it is likely many of these issues will be addressed.

Missouri AG Koster Proposes Reforms to Debt-Collection Practices
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Accounts Receivable Management

Filed Under: News

CFPB Ombudsman Report Reveals Focus on Consumer Complaint Portal, Among Other Things

December 6, 2015 By Leave a Comment

Earlier this week the Ombudsman’s Office of the Consumer Financial Protection Bureau (CFPB) released its FY2015 annual report. The CFPB Ombudsman’s role is to engage with both internal and external stakeholders and act as an impartial and confidential advocate where needed.

The report listed ways that the Ombudsman’s office feels it has made an impact in the past year. These included:

  • Suggested process improvements to ensure that groups sending correspondence to the Office of the Director receive acknowledgment.
  • Suggested ways to update Consumer Response communications for consumers in order to clarify how the process works and what they should expect.
  • Identified issues related to consumers’ ease of communication with the CFPB, such as the fact that the toll-free number for the contact center doesn’t work for some who are outside of the U.S.
  • Shared feedback it received from employees at one of the CFPB’s contact centers.
  • Identified issues arising from the submission of complaints on behalf of multiple consumers by third parties. One of the issues is that forms are filled out incorrectly or inconsistently, making it difficult for consumers to access their complaints, and for companies to recognize the consumer.
  • Identified the fact that in some cases the complaint system creates multiple profiles for the same consumer.
  • Provided suggestions for the normalization of consumer complaint data.
  • Suggested that there be greater clarity around the intersection of Supervision and Enforcement.
  • Facilitated communication between companies and Consumer Response regarding process. Two examples were mentioned.
  • Highlighted confusion around communications related to companies joining the Consumer Response Company Portal.

The report also details ongoing efforts of the Ombudsman to encourage fairness in the drafting of press releases regarding consent orders.

A significant portion of the 2015 report focused on the Ombudsman Forum that was held in September to get candid input from representatives of those industries under CFPB supervision. The topics discussed included:

  • Regulatory compliance
  • Intersection of Supervision and Enforcement
  • Field Hearings
  • Company responses to consumer complaints
  • Studies and research
  • CFPB website and social media

The most robust discussion took place within regulatory compliance, intersection of supervision and enforcement, and company responses to consumer complaints. The following are the summaries of those topics provided in the report:

Regulatory Compliance

Prior to the Forum, some industry groups and companies sought more clarity as to companies’ compliance obligations and a further understanding as to what CFPB compliance guidance is authoritative. In addition, they expressed a desire for additional information that would offer more clarity and certainty around regulatory compliance. Further, they shared that they look to consent orders and other enforcement activities to inform their understanding of CFPB’s compliance activities.

In our Forum, participants shared some additional perspectives on this topic, highlighting that it appears that CFPB consent orders are intended as notice to industry about the direction of enforcement. At the same time, without accompanying guidance on general applicability, they indicated that some companies do not know how to proceed. They shared that additional clarity would lead to better compliance. Participants also suggested that the CFPB: include additional context to the issues highlighted in the Supervisory Highlights publication; offer working groups that incorporate industry and consumer groups to inform practical solutions to process issues; and provide additional interpretative guidance on inherited regulations.

Intersection of Supervision and Enforcement

In FY2015, the Ombudsman heard from some stakeholders that they sought clarity as to when the supervision process ends and the enforcement process begins. During this Forum session, participants shared that it would be helpful to have more definition around the June 2013 “Responsible Business Conduct” bulletin and what activity constitutes responsible conduct.

Some participants also expressed that after issuance of a Civil Investigative Demand (CID) that months can go by without a follow-up on the status of the action, which can affect companies’ ability to make various business decisions. In addition, participants shared that it appears that the CFPB includes certain information in press releases as guidance to companies when the participants think that should be in a separate guidance document. At the same time, Forum participants offered suggestions to enhance clarity in this area. For example, they suggested it would be helpful to know how far back in time companies should report issues in conjunction with the “Responsible Business Conduct” bulletin.

In addition, they suggested that information shared around Bureau actions provides an opportunity to highlight industry best practices instead of only describing the problems. They also indicated it would be useful for the CFPB to share how the agency ensures consistency across the regions with the examination process.

Company Responses to Consumer Complaints

Regarding consumer complaints generally, some participants offered that the CFPB encourages consumers to submit consumer complaints, but does not suggest that the consumer first try to resolve the issue with the company. Participants also shared concerns about usage of the company response categories used to answer consumer complaints and their impact on industry. For example, participants shared that a duplicate complaint, as currently defined, must be word for word from a previous consumer submission.

They also highlighted that the company response category “Closed with Explanation” is a broad category that they use for many scenarios. Participants offered some suggestions including: that it may be useful to have an option to efficiently address complaints when the company is not in a position to assist the consumer; it would be helpful to further refine the substantive categories such as “Closed with Explanation;” and the definition the CFPB requires companies to use to designate a consumer complaint as a duplicate should be defined as the “same person, same transaction, same issue.”

insideARM Perspective

From an industry perspective, it’s not clear how impactful or influential the Ombudsman’s office may be. The Office does report directly to the CFPB Director. However, all they can do is highlight, suggest, and offer feedback. The CFPB is under no obligation to act on Ombudsman suggestions.

I was at the Ombudsman Forum in September, on behalf of the Consumer Relations Consortium. It was quite interesting. The dialogue was robust, and people were not shy about sharing feedback. What I learned was that most of the groups shared the same concerns and had common experiences in their interactions with the Bureau.

It’s clear from the 2015 Ombudsman Report, the September Forum, and the latest news, that there is significant focus on and controversy around the Consumer Complaint Portal. In addition to the discussion I included above that came from the Forum, the report details Ombudsman work in the area of complaint categories and duplicate complaints.

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Laurie Nelson Wins Bronze Stevie® Award in 2015 Stevie Awards for Women in Business

December 6, 2015 By Leave a Comment

JACKSONVILLE, FL  – Laurie Nelson, PaymentVision’s Chief General Counsel and Chief Compliance Officer, has
been named the winner of a bronze Stevie® Award in the Female Executive of the Year (Business Products) category in the 12th annual
Stevie Awards for Women in Business.

The Stevie Awards for Women in Business are the world’s top honors for female entrepreneurs, executives, employees and the
organizations they run. All individuals and organizations worldwide are eligible to submit nominations – public and private, for-profit
and non-profit, large and small. The 2015 awards received entries from 31 nations and territories.

Nicknamed the Stevies for the Greek word for “crowned,” the awards were presented to winners last month during a dinner event
attended by more than 400 people at the Marriott Marquis Hotel in New York City. The presentations were broadcast live via
Livestream.

More than 1,300 nominations from organizations of all sizes and in virtually every industry were submitted this year for consideration
in more than 90 categories, including Entrepreneur of the Year, Executive of the Year, Company of the Year, Startup of the Year,
Women Helping Women, and Women Run Workplace of the Year, among others.

“I’m honored to be named a winner of a bronze Stevie award,” said Laurie Nelson. “It’s great to see women in business and their
organizations being honored for their achievements. To be included is a significant achievement and I couldn’t be more thrilled to be
among the many well-known female executives that also received this award.”

Stevie Award winners were selected by more than 160 executives worldwide who participated in the judging process this year.
“We are again humbled by the accomplishments of so many high-achieving women in this program,” said Michael Gallagher, founder
and president of the Stevie Awards. Their work is an inspiration to girls and women around the world who dream of starting and
growing a business, managing a leading company, or improving their community. We congratulate all of this year’s Grand, Gold, Silver
and Bronze Stevie Awards.”

Details about the Stevie Awards for Women in Business and the list of Stevie Award winners are available at
www.StevieAwards.com/Women.

About PaymentVision

PaymentVision is a biller-direct, PCI-compliant, electronic payment gateway provider. PaymentVision offers clients the unified ability
to accept ACH, check, and credit or debit card payments, by phone, or through Internet channels. PaymentVision solutions handle
billions of dollars for thousands of financial institutions, large and small nationwide including, credit unions, banks, consumer finance,
and collection agencies. For more information, please visit www.paymentvision.com; follow PaymentVision on Twitter
@PaymentVision or on Facebook at www.facebook.com/paymentvision; or call 800-345-7243.

About Autoscribe Corporation

Autoscribe Corporation is a leading financial services company and payment processor. With more than two decades of innovation
and leadership in the financial technology industry, Autoscribe offers a full suite of tools through PaymentVision and Lyons Commercial
Data to help their customers grow their business, simplify payment processing, mitigate risk, and ensure compliance. Recently named
to the Inc. 5000 as one of the fastest growing private companies in the nation, Autoscribe has thousands of customers and processes
more than $2 billion in transactions annually. For more information, please visit www.autoscribe.com; follow Autoscribe on
Twitter @AutoscribeCorp or on LinkedIn at http://www.linkedin.com/company/autoscribe; or call 800-345-7243.

About The Stevie Awards

Stevie Awards are conferred in six programs: the Asia-Pacific Stevie Awards, the German Stevie Awards, The American Business
Awards, The International Business Awards, the Stevie Awards for Women in Business, and the Stevie Awards for Sales & Customer
Service. Honoring organizations of all types and sizes and the people behind them, the Stevies recognize outstanding performances in
the workplace worldwide. Learn more about the Stevie Awards at www.StevieAwards.com.

Forward-Looking Statements

This press release includes certain “forward-looking statements” including, without limitation, statements regarding future events and
Autoscribe Corporation’s business, strategy and results that are subject to risks, uncertainties and other factors that could cause actual
results or outcomes to differ materially from those contemplated by the forward-looking statements. These forward-looking
statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts. These statements are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and are sometimes identified by words such as “will”, “may”, “could”, “should,” “would”, “project”,
“believe”, “anticipate”, “expect”, “plan,” “estimate”, “forecast”, “potential”, “intend”, “continue”, “target”, “opportunities” and
variations of these words or comparable words. As a result of the ultimate outcome of such risks and uncertainties, Autoscribe
Corporation’s actual results could differ materially from those anticipated in these forward-looking statements. These statements are
based on Autoscribe Corporation’s current beliefs or expectations, and there are a number of important factors that could cause the
actual results or outcomes to differ materially from those indicated by these forward-looking statements, including, without limitation,
risks related to the successful offering of the products and services of Autoscribe Corporation; and other risks that may impact
Autoscribe Corporation’s business. Autoscribe Corporation expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein as a result of new information, future events, or otherwise.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.

Laurie Nelson Wins Bronze Stevie® Award in 2015 Stevie Awards for Women in Business
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