Archives for March 2018

This morning, the DC Circuit Court reversed several key provisions in the Federal Communication Commission’s 2015 TCPA expansion, including the FCC’s autodialer definition as well as the regulator’s approach to the treatment of consent and reassigned phone numbers. The industry has been waiting for the outcome of the case since it was filed by ACA International within days of the 2015 Declaratory Ruling and Order.  

The case is ACA International, et al., v. Federal Communications Commission. You can read the 51-page Appeals Court decision here.

Two key provisions overturned

The FCC’s 2015 Order insisted that any device that has the present or future capacity to function as an autodialer should be subject to the TCPA. That’s an overreach and an “utterly unreasonable” standard, according to the Circuit Court ruling.

According to the ruling, the FCC’s autodialer definition could be applied to smartphones used every day by millions of Americans – an “eye-popping sweep.”

“It is untenable to construe the term ‘capacity’ in the statutory definition of an ATDS in a manner that brings within the definition’s fold the most ubiquitous type of phone equipment known, used countless times each day for routine communications by the vast majority of people in the country,” the ruling concludes. “It cannot be the case that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a TCPA-violator-in-waiting, if not a violator-in fact.”

The ruling also reversed the FCC’s standard for reassigned phone numbers.

The current standard, so defined by the FCC in 2015, gives parties a one-call safe harbor when contacting an individual’s cell phone number. The Court finds that one-call standard “arbitrary and capricious.”

The FCC “consistently adopted a ‘reasonable reliance’ approach when interpreting the TCPA’s approval of calls based on ‘prior express consent,’ including as the justification for allowing a one-call safe harbor when a consenting party’s number is reassigned,” the ruling notes. “The [FCC], though, gave no explanation of why reasonable-reliance considerations would support limiting the safe harbor to just one call or message.”

Two key provisions retained

The court ruling also preserved two key provisions in the FCC’s TCPA expansion:

1. The FCC’s approach to revocation of consent, namely, that a party may “revoke her consent through any reasonable means clearly expressing a desire to receive no further messages from the caller;” and
2. The ruling also reinforced the FCC’s exemption for time-sensitive health care calls.

The iA perspective

Time will tell what effect this ruling will have on technology used by the call center industry going forward. It is somewhat ironic that in a world of Alexa, Venmo, self-driving cars, and so many other technology developments, that in this industry, “innovation” has meant stripping all capacity from a piece of software so as to render it like a rotary dial phone. In fact, one of these innovations is known as the “Human Call Initiator” – I swear this sounds like something from the Flintstones.

As many expected, litigation spawned from the FCC’s 2015 Order as it related to the definition of an ATDS. A silver lining for the industry has been that this backwards innovation stood the test of court battle in multiple jurisdictions. insideARM covered these stories:

August 28, 2017 – Another U.S. District Court Rules Human Call Initiator is Not an ATDS – (The case is Arora v. Transworld Systems, Inc., Case No 15-cv-4941, U.S.D.C., Northern District of Illinois, Eastern Division)

February 8, 2017 – U.S. Magistrate Judge in Michigan Rules LiveVox HCI System is Not an ATDS (The case is Smith v. Stellar Recovery Collection Agency, Inc.)

September 6, 2016 – Stellar Recovery, LiveVox Win Major TCPA Victory (The case is Pozo v. Stellar Recovery Collection Agency, Inc., Case No. 8:15-cv-929, United States District Court, Middle district of Florida, September 2, 2016)

Following these cases, insideARM contacted LiveVox (maker of the Human Call Initiator) for comment. Mark Mallah, General Counsel at LiveVox said,

“LiveVox is very excited that our HCI system has now won 4 out of 4 cases, each one in a different circuit. We think that this provides very strong validation for our approach to TCPA risk mitigation and for point and click technology in general. We have always believed that the controls we have in place are more than sufficient to address the TCPA’s challenges, and we are gratified that four different courts agree with us.”

Mr. Mallah offered this comment after today’s Order,

“We view the D.C. Circuit Court’s decision as a positive development for the industry and our clients. However, while the FCC’s problematic standard for capacity has been eliminated, uncertainty remains for other major aspects of the TCPA, such as the ongoing absence of a precise definition of an auto-dialer and lack of clarity regarding number reassignment. As such, we continue to advise vigilance in maintaining robust compliance and risk-mitigation strategies.”

We will see whether this ruling from the Appeals court sends technology development in a different direction.

NOTE: insideARM and LiveVox are co-hosting a webinar next Wednesday to provide more insight. Panelists will include David Kaminski of Carlson & Messer and Mark Mallah, Livevox General Counsel. Look out for registration information on Monday.

These United States are alive with the sound of legislators trying to hammer out solutions to the rampant balance billing crisis. While a national solution has its proponents, in the absence of a national statute, the states have been very busy doing what they can. Here are recent developments:

Washington

A bill from Insurance Commissioner Mike Kreidler that sought to help consumers avoid balance bills has failed. Had it passed, Engrossed Substitute House Bill 2114 would have prevented surprise medical or ‘balance’ bills when an in-network medical facility was used, but treatment was provided by an out-of-network provider. The bill passed the House of Representatives but failed the Senate.

Oregon

On March 1, Oregon’s House Bill 2339 went into effect to protect consumers from receiving surprise out-of-network medical bills from healthcare providers. The new law prevents providers who were not proactively chosen by the consumer from balance billing for their services.

Additionally, the law requires healthcare providers to inform consumers about the increased financial responsibility when choosing services from an out-of-network provider.

Patients receiving services from out-of-network providers may still be responsible for co-insurance, co-payments, or deductibles. Consumers can still choose an out-of-network provider, and when they do, those providers can still balance bill consumers for that choice.  

New Jersey

New Jersey legislators are working this month on details of AB 2039, The Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act. The bill would protect consumers from getting charged for surprise out-of-network medical expenses. Lawmakers have had to re-introduce the bill several times over the last nine years as healthcare providers, doctors, insurance companies and consumer protection groups have been unable to come to agreement on how to reduce balance billing.

As we’ve written about before, other states, including New York and California, have laws in place to protect consumers from getting billed for things such as an unexpected medication or a consultation from an out-of-network specialist during surgery.

New Hampshire

A bipartisan measure, New Hampshire HB 1809, drafted to protect patients against balance billing, got a strong endorsement from the House this month, passing with a 326-5 vote with no debate. One of its co-sponsors, Rep. Dave Luneau, has been trying to get a bill that would outlaw balance billing to the House floor for several years. If it passes the Senate and is signed into law, this bill will prevent consumers from being responsible for unexpected out-of-network bills for care they receive at in-network hospitals. It requires hospitals and insurers to deal with billing discrepancies on their own, without involving consumers. When hospitals and insurers reach an impasse, they can ask the insurance department to weigh in. The New Hampshire Insurance Department, which typically remains neutral on legislation, took the rare step of endorsing HB1809. However, like many other balance bills under consideration in other states, the NH bill has drawn the ire of hospital and physicians’ groups, who argue it will limit flexibility and gives too much leverage to insurance companies. The bill will now proceed to the Senate. A related bill, HB1643, was killed in the NH House this month as well.

Virginia

Virginia HB 1584 prohibits an out-of-network healthcare provider from charging a covered person who is insured through a health benefit plan an amount for “ancillary services” greater than what the insurance carrier would be obligated to pay for the insured. Included in the definition of ancillary services under this bill are screening, diagnostic and lab services that are part of the care a covered person receives from, or at, an in-network provider. In-network providers will be required to provide certain notices regarding the provision of ancillary services by an out-of-network provider. The measure has a delayed effective date of Jan. 1, 2019.

POUGHKEEPSIE, N.Y. — Phillip Cervin joins Immediate Credit Recovery, Inc. as Vice President of Business Development and Operations.

Phillip Cervin has over 30 years in the Student Lending and Servicing industry.  Prior to joining ICR, Phillip spent most of his tenure in the industry managing and leading the growth of Texas Guaranteed Student Loan Corporation (TG), now known as Trellis Company. During his tenure at TG, Phillip was instrumental in managing the performance of billions of dollars of the Federally Guaranteed Student Loan portfolio for one of the nation’s largest student loan guarantors. He successfully improved the rate of recovery of defaulted loans through employee development, enhanced teamwork, broader use of technology, heightened compliance and a greater focus on the overall customer satisfaction.    

Phillip resides in Austin Texas. He has a B.B.A in Economics from the University of Texas at El Paso and an MBA in Business Management from Saint Edwards University. 

In addition to exploring new business opportunities and developing synergies with other organization, Phillip will also participate in our ongoing commitment to enhance operations, further expand compliance and implement cutting edge technology in all areas within the organization. “We are pleased to have Phillip Cervin on board and look forward to his contributions as the new member of the ICR management team”, said Juan Blanco, Chief Operations Officer.

About ICR 

Immediate Credit Recovery (ICR) is a BPO (Business Process Outsourcing Company) specializing in servicing delinquent debts for federal and state agencies as well as directly for colleges and universities throughout the US. In addition, ICR has provided similar accounts receivable services for healthcare providers in the northeast and east coast states. 

ICR is a premier servicer that prides itself on maintaining the highest levels of data security, regulatory compliance and professionalism offered in our industry; all this while ensuring that every individual contacted receives courteous, prompt and unsurpassed ethical treatment in every conversation. Our independent surveys confirm this unequaled commitment to total customer satisfaction. 

ICR was founded in New York in 1990 and opened a second office location in Atlanta, Georgia in 2008. For more information about our services, please contact sales@icrcollect.com or visit our website at www.icrcollect.com

Many of my Linkedin friends know I’ve started a video conversation about what I see as possible solutions to fundamental challenges facing the debt collection industry. Last night I posted my third installment, which covers the super-awkward experience faced by consumers and collectors during the opening of a call.

To provide just a bit of context for those who haven’t watched, in my first video I outlined these three challenges (you can watch it here):

1. Scammers have really ruined things. Their billions and billions of calls mean that consumers don’t trust anyone who is contacting them, including debt collectors.
2. The beginning of a collection call is incredibly uncomfortable. Collectors are required by law to confirm they are talking to the right consumer before they can reveal why they are calling. But the consumer has been trained to not trust a caller they don’t know, and certainly not to provide any personally identifying information. And… collectors are required by law to tell consumers why they are calling. So there is a stand-off, and a really awkward situation.
3. Regulations and perceived risk limits debt collectors to 20^th century technology. Because of legacy rules and privacy concerns, collectors and consumers who want to jointly resolve debts are left in the 20th century, forced to communicate by postal mail and landline.

Video #2 focused on practical ways the industry could address the first challenge – scammers – by inserting mechanisms of trust back into the system. You can watch it here, or read about it here.

Click below to watch the 3 minute and 30 second video #3. This time I raise the prospect of moving to different methods of authentication than asking for the last 4 digits of a social security number or a birthdate. Please comment on Linkedin or get in touch with me; I would like to hear your thoughts.

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SARASOTA, Fla. — The National Creditors Bar Association (NCBA) takes exception with last month’s American Civil Liberties Union (ACLU) report which proclaimed that thousands of individuals were being arrested and jailed for the debts they owe. The ACLU’s report was not only factually inaccurate but was conveniently lacking in relevant truisms in an attempt to sensationalize unfortunate circumstances for individuals who fail to comply with court orders. The ACLU’s lack of understanding of the legal debt collection process including its failure to acknowledge federal and state laws which govern debt collection activity, court rules of procedure and the regulations imposed both at the state and federal level result in a report that lacked fundamental credibility, but more importantly, hampers the ability of legitimate debt collectors to communicate with consumers to fairly and efficiently resolve their financial obligations. 

The fact remains, debtors’ prisons do not exist. There is not one consumer in this country that was put in jail for the failure to pay a debt. Our court system simply does not work that way. The Fair Debt Collections Practices Act (“FDCPA” or the “Act”) mandates how a debt collector must communicate with a consumer and as well as enumerates specific prohibited conduct by debt collectors in its attempt to collect a debt on behalf of the creditor.  

At the beginning of the debt collection process a statutorily mandated letter is sent to the consumer advising of the debt and their right to dispute it. If the consumer fails to communicate with the debt collector, the debt collector may make further attempts to contact the consumer either by making telephone calls or sending additional letters. If the consumer still fails to communicate with the debt collector, the creditor may decide to pursue the matter legally and a civil lawsuit could be filed against the consumer. State law as well as the United States Constitution requires that a defendant to any lawsuit must be properly served and put on notice of the claims asserted against it.  A consumer then has the opportunity to file papers in court and/or appear at a hearing. If the consumer fails to appear or fails to file an opposition, a judgment can be entered against the consumer. If a consumer fails to pay the judgment, a judgment creditor has a right in certain states to obtain an order requiring that a consumer appear in court or answer papers to disclose any assets that could satisfy the judgment.  The failure of a consumer to comply with a court order is called contempt of court. When this occurs only a judge, not a debt collector, can order an arrest warrant be issued until the consumer complies with the court’s order. The result is the same regardless of whether the civil case involves a debt or the failure to supply discovery in some other civil claim. Judges expect that any person who comes before them to comply with their orders and the failure to do so can result in significant consequences – including but not limited to the issuance of an arrest warrant.

However, the examples cited by the ACLU are the most egregious and inflammatory scenarios meant to sensationalize rather than address the importance of communication and consumer education.  Members of NCBA as well as attorneys across this country know that in order for a court to send someone to jail in a civil matter, as opposed to a criminal matter, a complete and utter disregard for a court’s order must have occurred. Judges use this power sparingly otherwise the penalty for contempt would become superfluous. 

Litigation is the path of last resort for a creditor. The process is expensive and time consuming and results in a judgment only and not necessarily the payment of the debt. However, what the ACLU fails to recognize is that the courthouse can be the safest place for consumers if consumers chose to avail themselves of the ability to participate in the system. In court, a judge can supervise the conduct of an attorney and also ensure that the consumer, especially a self-represented consumer, has the required access to the protections the court can provide. 

Since 1977, the FDCPA has expressly prohibited debt collectors from making any threat that the nonpayment of a debt can result in arrest or jail. In the last decade, numerous states have adopted strict debt collection regulations to ensure that debt collectors conduct themselves appropriately in their dealings with consumers. The Consumer Financial Protection Bureau (CFPB or Bureau) and the Federal Trade Commission have brought numerous enforcement actions against bad actors in the debt collection industry for violations of the FDCPA. For the past five (5) years, the CFPB has been actively engaged in the rulemaking process for debt collection, and the debt collection industry has been working along with the Bureau to enhance this regulatory framework. For the ACLU to suggest that the industry is not regulated or that there is little government oversight is blatantly untrue and ignores the tireless efforts by industry stakeholders to work with policymakers and regulators to enhance and improve the debt collection process. 

NCBA is disappointed that the ACLU never once sought our advice or opinion about this report from the Association or its members. Instead, the ACLU painted an untrue and unfair picture of an industry whose participants devote countless hours to compliance training in order to better serve the needs of the consumers they come into contact with on a daily basis. As the nation’s only bar association dedicated to creditors’ rights attorneys, our perspective and truthful observations would have lent significant credibility to the ACLU’s report. The ACLU would have also learned that effective and robust communication channels serve consumers far better than disseminating fear and distrust. NCBA remains committed to educating and working with consumers about the legal process to ensure that consumers make the right choices in order to avoid drastic outcomes both in and out of the courthouse.

About the National Creditors Bar Association

The National Creditors Bar Association (“NCBA”) is a nationwide, not-for-profit bar association composed of attorneys and law firms engaged in the practice of creditors’ rights law. NCBA members include nearly 550+ law firms located in all fifty states, all of whom must meet association standards designed to ensure experience and professionalism. Attorneys employed by NCBA member law firms are committed to the fair and ethical treatment of all participants in the debt collection process. NCBA attorney members practice law in a manner consistent with their responsibilities as officers of the court and must adhere to applicable state and federal laws, rules of civil procedure, state bar association licensing and certification requirements and rules of professional conduct. More information at www.narca.org

PHOENIX, Ariz. — BillingTree®, the leading payment technology provider, today announced Account Receivables Management (ARM) solution specialist, The InterProse Corporation, will integrate BillingTree technology into its payment software solution. The partnership sees InterProse customers gain access to the myPayrazr Gateway and Portal solutions to meet growing demand for expanded payment options, uninterrupted processing services and rigorous compliance standards. 

InterProse has been a leader in the ARM for the last 20 years, providing software as a service electronic payment applications and consulting services for organizations of all sizes. The integration also allows InterProse customers to access BillingTree Merchant Services, including Payment Card and ACH (e-Check) processing. 

“Technology innovation has always been at the forefront of the InterProse go-to market strategy,” said Matthew Hill, Director of Sales & Marketing, Strategic Partnerships, President and CEO at The Interprose Corporation. “The integration with tech-focused BillingTree solutions is a continuation of that drive to bring our customers the industry’s leading payment technology and offer the most flexible solutions available. InterProse customers will be able to provide the most up-to-date payment options, while being safe in the knowledge that they are operating with full regulatory compliance.”

“Settling balances in the ARM industry is about offering customers a path of least resistance to payment. BillingTree solutions are developed from detailed knowledge, experience, research of consumer trends and customer pain points in the ARM environment,” said Steve Recchia, ARM Industry Director Sales/Account Management at BillingTree. 

About InterProse
InterProse is a software company serving the debt recovery market with a web-based, open-platform software solution to facilitate debt recovery efforts. Specializing in efficiency through process automations and capable of integrating various third-party technologies to keep pace with modern advancements, InterProse continually upgrades the platform at no charge to its customers and strives to be the most flexible, modern solution available for its target markets of third party debt collections and original credit grantors.