Archives for January 2019

Editor’s Note: This article was initially published on TrueAccord’s blog and is republished here with the author’s permission.

A couple weeks ago, I posted about the three main themes I heard in the public comment forum from consumer advocates, businesses, and trade groups on the new California Consumer Privacy Act (CCPA). I heard from a number of ARM compliance professionals that the themes highlighted provoked discussion on how this law might impact our industry in particular. Today I want to take the discussion further and talk a bit about some of my concerns for how this law will likely add significant complications to your compliance platform.

The California Attorney General’s Office has been hosting a number of public comment forums around the state to hear from consumer advocates, business, and trade groups about the new California Consumer Privacy Act. The Act will require that businesses inventory and map personal data, provide consumers rights to see what data a business has collected, and allow consumers to opt out of data selling or transmission. If you have a website and interact with any consumers in California, you need to be concerned about the potential impacts of the CCPA to your business.

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This law conflicts with state licensing requirements or industry best practices.

Section 1798.105 requires companies to delete a consumer’s information upon request. In the ARM space, collections agencies have both data provided by their clients on consumer accounts placed for collection and data they collect throughout the collections process. Businesses in the consumer finance space, for example, need to keep this information to demonstrate how they handled the consumer’s account, to prove they followed the various laws regulating the industry, maintain accurate records for their finance departments, and to improve the collections process for consumers and clients.

There is a list of exceptions to the requirement to delete a consumer’s information upon request, in section 1798.105(d). Subsection (d)(7) says you may keep information “To enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer’s relationship with the business” and Subsection (d)(8) says you may keep information to “Comply with a legal obligation.” These provisions are extremely broad and ambiguous. What might be “reasonably aligned” with how a collection agency would use consumer information will result in differences of opinion. Would a consumer expect an agency to keep a record for state or federal regulators? What about being able to provide a receipt for the consumer months or years later to prove payment on an account? Would a consumer, or even California regulators, agree that another state’s licensing rules that require an agency to keep that consumer’s records for a period of time trump the consumer’s request to delete that information? Without reliable guidance, definitions, or safe harbors this provision will result in disharmony, divergent expectations and likely legal battles.

A new opportunity for bad actors and for corporate espionage.

Section 1798.140(c) states that the law applies to any business that:

1. Has annual gross revenues in excess of $25,000,000; or
2. Alone or in combination, annually buys, receives for the business’ commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices; or
3. Derives 50 percent or more of its annual revenues from selling consumers’ personal information.

This provision alarms information security officers in large and small businesses alike. On nearly every website, each time you visit a site and browse around, your IP address is logged by the administrative system for the web page. As written, merely collecting an IP address could count towards the 50,000 threshold to trigger compliance with this law.

A Distributed Denial of Service attack (“DDOS”) is an increasingly common method for bad actors to try and hack into a business database by bombarding the company’s website with hundreds of thousands of web site visits, overwhelming the system and causing it to crash and distracting the company’s administrators and allowing the hacker to get easy access. This creates a scenario where any hacker going after valuable consumer records can add the headache of complying with CCPA.

Another unpleasant possibility would be for an unhappy consumer or a competing business to launch a DDOS attack and then sending dozens or hundreds of information requests under the CCPA. Simply search online for “how to do a DDOS attack” and you will find dozens of articles and videos that explain just how easy it is for the average person with minimal technical knowledge to start their own DDOS attack. If your company does any business in California and any IP addresses used in this attack are from a California resident, your company will have to comply with the CCPA for all of your California consumers. These albeit too common scenarios are yet unaddressed in the law.

Client information? Agency information? Who is responsible for what?

Collection agencies must keep detailed records of how and when we communicate with consumers. Whether agents are calling, responding to letters, emailing, or texting, we must know the details of what we discuss to meet our federal and state compliance regulations, improve our chances of collecting on outstanding balances and to inform our clients on the status of their accounts. It is unclear in the CCPA whether an agency would be required to delete this valuable information at the request of a consumer. As written, the results of skip tracing could be considered personal information and if an agency is required to delete current addresses or respect an opt-out for using this information it is impossible to provide legally required disclosures to consumers. A likely unintended consequence may be more creditors choosing to sue clients than facing the legal uncertainty posed by the CCPA.

An issue raised by the CCPA particular to collections is there is no clear delineation between whether the client or the collection agency bears the responsibility for honoring a consumer request to opt out or to delete information. It is common for a consumer to communicate with both the creditor and the agency where the account is placed while the account is in collections. If a consumer tells the creditor that they are opting out and want their information deleted, does the creditor have to respect that request even if it makes the account unworkable? Will the creditor need to relay this request to the agency working the account and require them to delete consumer information? The law is unclear as to how the creditor or the collection agency can reasonably comply with consumer wishes without making the account potentially uncollectable.

These issues can be resolved before the law goes into effect.

The CA DOJ must build in a safe harbor provision to addresses these concerns that go beyond the consumer finance space into all forms of businesses interacting with consumers (think hospitals). We need to raise these issues with the regulators and ensure that there is no ambiguity around what information must be deleted or provided to a consumer upon request, the specific exceptions to this provision,  how to transmit that information to consumers securely, and to protect businesses and consumers from bad actors. If you are a business who interacts with consumers, you need to either attend the next public comment forum nearest to you or provide critical feedback to the regulators and to follow up with a formal written response. You can find information on the public forum schedule, along with an email address and postal address to send your feedback below.

Upcoming events: https://oag.ca.gov/privacy/ccpa

Email to provide feedback directly to regulators: privacyregulations@doj.ca.gov

Postal mail address to provide feedback:

CA-DOJ, ATTN: Privacy Regulations Coordinator
300 S. Spring St.
Los Angeles, CA 90013

Editor’s Note: Multiple industry groups are reportedly planning to submit comments. insideARM encourages as many voices to be heard as possible.

On Friday, January 25, the Consumer Financial Protection Bureau (CPFB or Bureau) issued a press release announcing additions to its senior leadership. The additions are as follows:

• Andrew Duke – Policy Associate Director for External Affairs. Mr. Duke has 27 years of public policy experience, including 20 years serving three different members of Congress. 
• Laura Fiene – West Regional Director. Ms. Fiene has 31 years of expeirence regulating financial services companies and has been with the Bureau since its inception in 2011.
• Marisol Garibay – Acting Chief Communications Officer. Ms. Garibay hails from the Office of Management and Budget, where both Director Kathy Kraninger and Former Acting Director Mick Mulvaney came from. She has 14 years of experience in policy communications.
• Delicia Reynolds Hand – Deputy Associate Director for External Affairs. Ms. Hand has 17 years of experience in consumer advocacy and joined the Bureau in 2012.
• Lora McCray – Director of the Office of Minority and Women Inclusion. Ms. McCray has 15 years of experience in minority inclusion and management, most recently at the Federal Reserve Bank of Boston. 

insideARM Perspective

When a new leader comes into an organization, usually a new leadership team comes along with him or her. It’s been a little over a month since Director Kathy Kraninger became the leader of the Bureau, and now we have both: a view into her vision of the Bureau and the senior leaders she is bringing in to help her establish that vision. 

The Bureau has seen a lot of turmoil regarding its senior personnel over the past 15 months.

• Back in November 2017, Former Director Richard Cordray announced that he would be stepping down from his role.
• The next month brought turmoil around who would take over as Acting Director: Former Director Cordray’s pick, Leandra English, or President Trump’s pick, Mick Mulvaney. After a federal judge’s ruling, Mick Mulvaney became the Acting Director.
• In June 2018, President Trump announced Kathy Kraninger as his pick to be the next permanent Director (with a 5-year term). This was met by a lot of resistance from Senator Elizabeth Warren and others.
• In August 2018, the Bureau’s former Student Loan Ombudsman resigned with a bang, releasing a resignation letter that alleged the Bureau’s new leadership was failing consumers. This letter sparked backlash and inquiries from Congress.
• In December 2018, Congress confirmed Kathy Kraninger as the next Director of the CFPB.

Hopefully a new Director means stability among the Bureau’s ranks, and more clarity for those it supervises.

ARLINGTON, Va. — Numeracle™, Inc., the pioneer of robocall blocking and labeling visibility and control in the calling ecosystem, and NobelBiz™, leading innovator in the contact center technology industry, today announced a collaborative solutions delivery model enabling NobelBiz to provide Numeracle’s Number Registration and Trusted Entity™ Certification solutions to customers using LocalTouch®, the patented Local Caller ID management solution by NobelBiz.

For enterprises experiencing a decline in customer engagement due to improper call blocking and labeling, Numeracle’s NumeraList™ Number Registration services provide an enterprise the ability to register its phone numbers across the telecommunications network, or ‘the calling ecosystem,’ in order to identify its ownership of the numbers. Numeracle’s corresponding NumeraCert™ module verifies the enterprise’s identity, call compliance infrastructure and use of its phone numbers for the purpose of customer communications to certify the call originator’s status as a Trusted Entity.

As the result of Number Registration and Trusted Entity Certification, a legal enterprise is able to prevent its calls from being improperly classified and labeled as “Fraud” or “Scam” as displayed on a consumer’s mobile phone or caller ID. This increases consumer trust in the incoming call and improves the reputation of the calling party’s associated brand.

By presenting a geographically familiar number to the calling party, NobelBiz’s fully-compliant LocalTouch solution increases contact rates and callbacks, allowing enterprises to make more connections with consumers while making fewer attempts. Coupled with Registration and Certification, powered by Numeracle, NobelBiz’s patented automated number rotation is now enhanced through the presentation of accurate caller ID labels by call blocking and labeling solutions, leading to increased customer satisfaction and improved agent morale.

“As a strategic extension of NobelBiz’s Intelligent Local Caller ID Management solutions, the addition of Numeracle’s Registration and Certification offering allows our customers to receive all the performance and productivity enhancements associated with LocalTouch, now with the ability to address improper call blocking and labeling,” said Steve Bederman, President, NobelBiz. “By providing our customers with a solution to address lost connections due to fraudulent or illegal call labeling, we’re able to improve connect rates, supported by Numeracle’s established position within the industry to navigate this changing ecosystem.”

“By bringing the work we’re doing to support the legal call originator together with NobelBiz’s innovative suite of performance and productivity solutions, we’re extending our mutually-held vision to improve trust and consumer experience for our customers on a wider scale,” said Rebekah Johnson, Founder & CEO, Numeracle. “By extending the ability for LocalTouch users to identify how they intend for their numbers to be labeled across the ecosystem, we’re putting control back into the hands of the call originator and returning viability to voice channel communications.”

To discover how Numeracle and NobelBiz can help you to convert more calls while addressing call blocking and labeling, please visit http://nobelbiz.com/contact or www.numeracle.com/contact to get in touch.

About Numeracle

Numeracle, established to take action against the growing problem of unwanted and illegal robocalls, provides a single source of visibility into improper call blocking and labeling across the ecosystem. By working together with carriers, analytics companies, device manufacturers, and the developers of call blocking and labeling apps, Numeracle delivers actionable strategies to return control to the originators of legal and wanted calls. To learn more about our mission to return trust and transparency to the voice channel, please visit www.numeracle.com.

About NobelBiz

NobelBiz is the leading innovator in the contact center technology industry. The company has grown to serve contact centers globally, providing world-class voice, cloud contact center, and business intelligence solutions. NobelBiz transforms contact centers into higher-performing intelligent contact centers and helps take companies from “isolated cost center’ to ‘company-wide intelligence generator” for customer service, sales, marketing, product development, and more. Visit www.nobelbiz.com to engage with us on our intelligent call center solutions.

LOS ANGELES, Calif. — The City of Los Angeles Office of Finance has launched implementation of their “NextGen” Cloud Financial Ecosystem, “CSS IMPACT! HD™ 2.0”. CSS, Inc., the developers of “IMPACT! HD™ 2.0” is the leading provider of Cloud Financial Ecosystem platforms for enterprises & government.

CSS’s financial cloud architecture removes and resolves prohibitive costs of acquiring new technology and workforces to overcome fundamental day to day processes. Municipalities, like the City of San Francisco, City of Los Angeles and the City of Cincinnati, are leveraging intuitive agile new technology to engender turn-key automation with CSS’s Cloud Financial Ecosystem platform, enabling them to cost-effectively leverage cutting-edge Fintech technology with the added benefit of a streamlined workforce. This in turn enables veteran City operations staff to focus solely on revenue management and customer care.

The City of Los Angeles, named America’s #1 Digital City for 2018 by the “Center for Digital Government”, continues their legacy as Technology Leaders by adopting revolutionary cloud solutions to better serve their citizens.

“The City of Los Angeles is ranked as one of the most innovative cities in the country. It is an honor and a privilege to have been awarded this project and to be recognized by the City for our advanced Financial Ecosystem Technology. We look forward to a long partnership with the great City of Los Angeles,” said Sergio Seplovich, Executive Projects Director of CSS, Inc.

To learn more about how municipalities are leveraging CSS’s Cloud Financial Ecosystem, please visit http://www.cssimpact.com/software/tax-information-platform-system or download CSS’s tax platform brochure at http://tax.cssimpact.com.

About the City of Los Angeles – Office of Finance

The City of Los Angeles sprawls across roughly 470 square miles with 80+ neighborhoods connected by approximately 6,500 miles of streets. More importantly, it is home to over 4 million Angelenos and over 500,000 businesses.  The Office of Finance carries an important responsibility to ensure these 4 million entrepreneurs, visionaries, and leaders have the necessary services and city infrastructure to thrive.  As LA’s primary revenue generator, The Office of Finance engages in the pursuit of excellence in financial management for the City, its residents, and its businesses.

Finance is responsible for the collection of over $3 billion in revenue from various sources including taxes, licenses, fees, and permits which pay for numerous essential municipal services to City residents and businesses.  From tax discovery units to customer support, the tax collection division secures the inflow of funds to keep the City operating. For more information please visit https://www.lacity.org/

About CSS, Inc.

CSS is a leading provider of end-to-end cloud Financial Ecosystem platforms & Contact Center solutions for enterprises that generate & manage mass receivables, payments, recoveries & revenues. By delivering cognitive cloud Financial Ecosystems technology, CSS helps municipalities and enterprises improve and automate all their daily financial processes, consumer engagement & business process. For more information, download our brochure at http://brochure.cssimpact.com or visit us http://www.cssimpact.com or call 877.277.4621.

The Fair Debt Collection Practices Act (FDCPA) requires debt collectors to list the creditor to whom the debt is owed in the initial letter sent to consumers. This is simple enough when there is a single creditor entity, but becomes a little more complex when more than one entity is involved with the debt. One such situation is where the debt arises from a store-branded credit card that is issued by a bank.

In Bryan v. Credit Control, LLC, No. 18-cv-0865 (E.D.N.Y. Dec. 11, 2018), the court addressed this situation and found that listing the retail store as the creditor to whom the debt is owed does not violate the FDCPA due to the underlying contract between the retail store and the issuing bank.

Factual and Procedural Background

Plaintiff opened a Kohl’s Department Store, Inc. credit card that could only be used for the purchases made at Kohl’s. The card was initially issued by Chase Bank until 2011, followed by Capital One thereafter. The underlying agreement between Kohl’s and Capital One stated the following:

• Accounts are defined as credit accounts used to make purchases from Kohl’s;
• The “program” is the private label credit card program, including for the extension of credit to make purchases from Kohn’s.
• Kohl’s is responsible for, among other things, processing applications, managing accounts, handling collection and recovery efforts.

After plaintiff defaulted on his account, Credit Control sent a collection letter that listed Kohl’s as its “client” and Chase as the “Original Credit Grantor.”

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Plaintiff filed an FDCPA suit against Credit Control alleging that the letter failed to properly identify the current creditor. Credit Control filed a Motion for Judgment on the Pleadings, which the court granted — effectively disposing of the case by ruling in Credit Control’s favor.

The Court’s Decision

By granting Credit Control’s Motion for Judgment on the Pleadings, the court essentially ruled that based on all of the allegations contained in the complaint, there is enough present to find that Credit Control did not violate the FDCPA.

Based on the contract between Kohl’s and Capital One, Kohl’s is the creditor to whom the debt is owed. According to the FDCPA, “creditor” is defined as one “who offers or extends credit by creating a debt or to whom a debt is owed.” (Emphasis added by court.) Plaintiff argued that since Capital One is the owner of the account, the bank — rather than Kohl’s — is the creditor. However, the court disagreed, finding that plaintiff was confusing ownership of an account with the FDCPA’s definition of creditor. Based on the agreement between Kohl’s and Captial One, Kohl’s is the entity offering credit and is the entity responsible for collecting the debt. This, according to the court, qualifies Kohl’s as the creditor under the FDCPA.

The court rejected plaintiff’s argument that listing both Kohl’s and Capital One is confusing. The court cites prior precedent to show that specific labels are not required and, based on the context of the letter, the consumer would not be confused as to who the creditor is in this case. According to the court:

There is no indication that a bank’s involvement with a debt undermines the efficacy of listing the creditor as a “client,” and the Court remains persuaded by the reasoning in Wright.  Bryan applied for the credit card directly from Kohl’s, transacted business exclusively with Kohl’s, and was obligated to make payments through Kohl’s. No debtor, however unsophisticated, would be “uncertain as to the meaning of the message,” as it is obvious that the Collection Letter referred to Plaintiff’s Kohl’s credit card account. Thus, the technical owner of the Debt would not have been of concern to the least sophisticated consumer, who in this case could have paid off his Debt without having ever interacted with Capital One.  Accordingly, the Collection Letter’s reference to Kohl’s as Credit Control’s client complied with the FDCPA’s required inclusion of “the name of the creditor to whom the debt is owed.”

(Internal citations omitted.)

Since the court found that Credit Control accurately stated the creditor to whom the debt is owed in the letter, there was no violation of the FDCPA and the Motion for Judgment on the Pleadings was granted.

Years ago, the financial services industry looked much different than it does today; there were no documentation requirements, it was routine for debt collectors to charge post-charge off interest, chain of title documentation was required in only one or two states and requirements for post-charge off itemization were very limited. Data on the accrual of interest was often stored as a single number and it was hard to tell what payments had been made and what impact that had on accrual of interest.  

With no chain of title requirements, it was also not unheard of for unscrupulous or careless debt buyers or brokers to sell that same account to more than one debt buyer downstream. All these attributes, along with limited due diligence prior to reselling accounts created situations that often led to accounts not receiving proper attention, putting the consumer in a bad position. The OCC started to question the safety and soundness aspects of banks selling any debts to debt buyers who are known to later resell those debts. Due to the lack of structure, issuers and regulators alike started to have data integrity and consumer experience concerns, thereby prohibiting the ability to resell accounts through contract requirements and consent orders.

So here we are in 2019. Enough time has passed to where debt buyers are savvier and more educated on what it means to have a well-functioning compliance management system. In our industry, whether we are talking about purchasing or selling, we are focused on both data integrity and documentation. And with all the evolution in the marketplace, it has created a much more stable, certain environment so that, when and if a debt is disputed that has been resold, the purchase will have documentation, chain of title, and post-charge off itemization.

Our industry associations have also stepped up to support our industry as we all navigate through these complex issues. The Receivables Management Association (RMA) Certification Program is an industry self-regulatory program administered by RMA that is designed to provide enhanced consumer protections through rigorous and uniform industry standards of best practices. Through the program, certified companies are subject to sale restrictions that preserve data integrity. Those restrictions include not selling accounts: without access to Original Account Level Documentation; when a consumer communicates a dispute of validity or accuracy; when an account has been settled or paid; when the account is a result of identity theft or fraud; and to a non-certified company without terms and conditions contained in the sales agreement requiring the purchaser of the accounts to meet or exceed the standards of a Certified Company.

We know about these positive changes in our industry, but we also need to let our regulators know. This is true now more than ever before, with the Consumer Financial Protection Bureau (CFPB) set to issue a Notice of Proposed Rulemaking (NPRM) in March 2019, and a brand new Director, Kathy Kraninger, leading the CFPB. Director Kraninger is now getting up to speed on our industry and we have a prime opportunity to educate and advocate on why a robust resale market is so critical for the continued growth of our industry, as well as the consumers we serve.  We should also be advocating forcefully on why the new CFPB rules cannot be so burdensome that smaller companies without large compliance departments will simply be unable to comply.

With a forthcoming NPRM and a new CFPB Director, this is a critical juncture for our industry and the future of the resale market. Let’s make the most of it.

Note about Doris Hektor:

Doris is the Chief Compliance Officer at Encore Capital Group, and has over two decades experience in banking and financial services, including serving in senior compliance roles at American Express and JP Morgan Chase. She is a frequent presenter in the RMA Chief Compliance Officer (CCO) Forum, and is a candidate on the 2019 ballot for the RMA Board of Directors.

LAS VEGAS, Nev. — Noble Systems Corporation, a global leader in omnichannel contact center technology, today announced that it would display its Omnichannel Contact Center, Workforce Engagement (WEM), Gamification and Analytics solutions from booth #109 at the upcoming Receivables Management Association (RMA) International 2019 Conference, being held February 5 – 7, 2019 at the Aria Resort & Casino in Las Vegas, Nevada.

Noble Systems will be hosting attendees throughout the week, offering a chance to win state-of-the-art BOSE headphones.

• WHO: Noble Systems (BOOTH 109)
• WHEN: February 5 – 7, 2019
• WHERE: RMA  International 2019 Conference, Aria Resort & Casino, Las Vegas, NV

For consumers, collections calls can be intrusive, frustarting and embarrassing. Debt collection contact center agents face stress, angry customers and other emotionally taxing challenges every single day. In addition, they do their jobs knowing that their employer can lose customers forever if they mismanage these delicate engagements.

“Despite perceptions, effective debt collection agents are a company’s unsung heros,” said Chris Hodges, SVP, Noble Systems. “They not only recover lost revenue, but have the unique tempermant to deliver a positive experience for customers in the most unpleasant circumstances.”

Noble Systems’ complete, unified solutions of omnichannel contact center, WEM and analytics are the foundation of an expansive portfolio that enhances collector productivity, saves time and money, increase promises-to-pay, manages compliance, and improves overall collection results.

“Businesses must recognize that these employees work in a hornet’s nest of hostility and provide them with the training, technology and support to do their jobs efficiently, cost-effectively and with a positive attitude,” added Hodges.

Agent attrition is an epidemic in contact centers as agent tenure decreases each year. Noble WEM and Gamification solutions help keep agents motivated and focused. Using game mechanics, Noble Gamification drives desired behaviors, leverages science-based motivational techniques to train, provides ongoing feedback to and rewards collectors for improved business outcomes.

Noble Systems offers powerful technology solutions for the Collection and Debt Recovery industry that help increase right-party contact rates, streamline the communications process, and maintain compliance with advanced list management and dialing strategies. Real-time speech analytics, integrated agent monitoring and interaction recording provide the visibility for quality assurance, and single/dual recording and wireless number dialing solutions are available in a PCI-Ready environment.

About Receivables Management Association

Receivables Management Association is the nonprofit trade association that represents more than 575 companies that purchase performing and nonperforming receivables on the secondary market. The Receivables Management Certification Program and Code of Ethics set the global standard within the receivables industry due to its rigorous uniform industry standards of best practice which focus on the protection of the consumer. Receivables Management Association provides its members with extensive networking, educational, and business development opportunities in asset classes that span numerous industries. The association continually sets the standard in the receivables management industry through its highly effective grassroots advocacy, conferences, committees, task forces, publications, webinars, teleconferences, and breaking news alerts. Founded in 1997 as Debt Buyers Association, Receivables Management Association is headquartered in Sacramento, California. https://rmassociation.org/

About Noble Systems

Noble Systems Corporation is a global leader in the customer communications industry, providing innovative solutions for Contact Center, Workforce Engagement, and Analytics technologies. Tens of thousands of agents at client installations worldwide use Noble platforms to manage millions of customer contacts each day. Noble offers a unified suite of inbound, outbound, and omnichannel contact processing, strategy planning, resource management, and compliance tools for companies of all sizes. Our premise, cloud, and innovative premise/cloud hybrid platforms include ACD, predictive dialing, blended processing, recording and monitoring, IVR, messaging, interaction analytics, workforce management, and gamification. With a portfolio of 175 patents and growing, Noble leads the way in pioneering solutions for the contact center market. For more information, contact Lee Allum at 1.888.8NOBLE8 or visit www.noblesystems.com.

CLAYSBURG, Pa. — Amanda Bost brings 20 years of experience from the collection industry as she steps into the role of Director of Business Development for Collection Services at NPC, Inc.

She will be responsible for driving the direction of NPC’s sales development and relationship building with top-tier debt collection agencies, providing them with the security, compliance, production and reliable delivery they expect from a vendor and business partner.

“In the collection industry, everything is based on compliance every single day,” Amanda says. “Our services can all easily integrate into the collection world. I think what’s so special about NPC is that we have a lot of those extra features that collection agencies don’t even realize they need.”

From NPC’s Larissa Crum, Vice President:

“This is the perfect time to bring Amanda on board as part of our commitment to the collection industry, she brings a wealth of knowledge and experience to NPC. Amanda knows the collection industry and brings the customer perspective on day one. Amanda’s vision, strategy, and track record is exactly what NPC needs to deliver services and product offerings that are most needed in the marketplace today.”

Before joining NPC, Amanda served as Director of Administrative Operations for an accounts receivable management firm based in Ohio. She managed process improvements, corporate expansions, new location openings, human resources, compliance auditing, cost control, internal/external reporting, sales team support, and vendor relationships. Before that she served as a Client Services & Legal Forwarding Manager, and a Client Services Representative.

“Over my last 20 years, I touched every part of the organization and got the full perspective of how a collection agency works,” Amanda says. “I understand their wants and needs, and also understand their frustrations — especially dealing with collection letters. I joined NPC so that I can bring my perspective of the collection industry to a vendor who is passionately committed to creating value for its customers.”

Connect with Amanda:

• Email: amanda.bost@npcweb.com
• Phone: 814.239.8787
• LinkedIn: https://www.linkedin.com/in/amanda-bost/

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About NPC, Inc.

NPC’s Compliant Collection Letter Outsourcing Solutions for the ARM industry (www.npcweb.com/debtcollection) streamline and automate collection letter processes with a single-source solution. We work with premier collection agencies throughout the receivables communication lifecycle, saving them valuable time and money, all while helping them maintain 100% compliance.

Just yesterday, insideARM published an open letter to the Consumer Financial Protection Bureau (CFPB) regarding a legal issue that has percolated over the past year or so in the Eastern District of Pennsylvania and the District of New Jersey. Decisions from these courts are doing two things: (1) finding that a validation notice that tracks the statutory language of the Fair Debt Collection Practices Act (FDCPA) might very well violate the FDCPA, and (2) reading an “in writing” requirement into subsection (a)(3) where none exists.

The Eastern District of Pennsylvania recently released yet another decision on the issue in the case of Henry v. Radius Global Solutions, LLC, No. 18-cv-4945 (E.D. Pa. Jan. 18, 2019). 

Factual and Procedural Background

The facts in this case are similar to all other cases on this issue. There is nothing out of the ordinary in the way the debt was collected. At issue is the validation notice language used by the debt collector in its initial letter to the plaintiff. The letter, using identical language to the requirements listed in section 1692g of the FDCPA, states:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request of this office in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.

Plaintiff alleges that this notice “ambiguously described how she could dispute this debt” because the first sentence doesn’t notify her how to dispute the debt nor does it describe what happens if the debt is disputed orally. In response, the debt collector filed a motion to dismiss, which the court denied.

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The Court’s Decision

The court begins its decision with a paragraph summarily stating that the Third Circuit reads an “in writing” requirement to disputes made under 1692g (a)(3). In analyzing the Third Circuit’s decision in Graziano v. Harrison, the court mentioned that Graziano does not state that a debt collector must include the words “in writing” for subsection (a)(3) — although doing so does not violate the FDCPA. Instead, Graziano holds that in order for a debtor’s dispute under subsection (a)(3) to be valid, it must be in writing. Despite agreeing with Gratziano that the words “in writing” are not required, the court found that plaintiff sufficiently stated an FDCPA claim because not including “in writing” does not sufficiently describe the consumer’s rights. (Editor’s Note: Doesn’t that in effect make it a requirement?)

The court then went on to discuss the issue of including “if” in the second sentence of the validation notice, which is also included in the statutory language. Despite the court agreeing that the debt collector’s interpretation — that “if” is a condition — may be true, the court found that it could not rule out the possibility that the least sophisticated consumer might consider “if” as an option. If “if” is an option, then the letter can be read as allowing both oral and written requests for verification of debt. The court suggests that substituting “if” with “unless” (“Unless you notify this office in writing within 30 days…”) would be better.

Oddly enough, the court found that 1692g is not vague despite acknowledging that even judges within its own circuit have come to different conclusions on the issue. As a word of caution, the court cites the recent Durnell v. Stoneleigh Recovery Associates, LLC case, referenced in yesterday’s open letter, which states that adding the “in writing” language to subsection (a)(3) might run the debt collector afoul in other jurisdictions that do not read an “in writing” requirement into subsection (a)(3). The court also acknowledges that it disagrees with another late judge in its circuit on the “if” issue. One of the court’s main arguments in finding that the statute is not vague is simply the fact that it has never been questioned for its constitutionality despite being reviewed countless times for other issues.

insideARM Perspective

According to statutory interpretation principles, courts are first supposed to look to the plain meaning of the statute. Only if there is ambiguity or vagueness can the courts expand the scope. Many times in the past, courts throughout the country have found that if Congress explicitly included a certain requirement in some sections of a statute but not in others, then the exclusion was intentional and the requirement should not be read into those sections.

This issue is a perfect example. 

A plain reading of the statute indicates that a consumer has three separate options under section 1692g of the FDCPA:

• To dispute the debt (in any manner) within thirty days or else the debt collector will deem it valid.
• To request verification of the debt, which must be requested in writing within thirty days.
• To request the name and address of the creditor, which must also be requested in writing within 30 days.

The thirty day requirement is very clearly present in all three options, yet the written requirement is not. Congress explicitly included a written requirement for subsections (a)(4) and (a)(5), yet there is no mention of it in subsection (a)(3). By excluding the written requirement from one of the three subsections (and by not doing the same with the thirty day requirement), it can be concluded that Congress did not intend subsection (a)(3) to have a written requirement, thus affording consumers the ability to dispute the validity of debts (without requesting verification) both orally and in writing. 

Instead, these court decisions seem to indicate that these options — or at least the first two — are one and the same, forming a hybrid option where none exists in the statute. As a result, the Third Circuit and its subordinate courts have effectively restricted their consumers’ options for disputing debts,

The silver lining out of all of this is that there is a clear jurisdictional split on the issue, which creates an avenue for U.S. Supreme Court review. A Supreme Court decision would settle the issue once and for all, requiring all courts in the United States to follow its decision. While the path to Supreme Court review is long and not guaranteed, the universal applicability of a Supreme Court decision on this issue would provide much needed clarity for debt collectors who are in good faith trying to comply with the law, especially those who collect in multiple jurisdictions.

ST. GEORGE, Utah — TCN, the leading provider of cloud contact center technology for enterprises, contact centers, BPOs and collection agencies worldwide, announced today its membership in the Consumer Relations Consortium’s (CRC) Innovation Council (an initiative of insideARM and the iA Institute). As a member of the council, TCN, along with a select group of senior technology, strategy, operations and compliance executives, will work to redefine the “big” technology issues impacting the collections industry, as well as share operational insights and best practices with consumer groups and regulators in an effort to implement better processes, procedures and solutions for the industry as a whole.  

“TCN is honored to be given the opportunity to serve on this distinguished council of industry-leading creditors, technology companies and large collection agencies,” said Terrel Bird, CEO and co-founder of TCN. “We are excited to be one of the very few to represent the industry and to be at the forefront of improving technology, processes and relationships for creditors, consumers and servicers alike.”

On a mission to affect reform that is progressive, practical and will enhance the consumer experience for the collection industry, the CRC is led by two steering committees: regulatory and innovation. CRC members meet three times a year to engage in substantive education and feedback sessions to provide updates and guidance on relevant CRC initiatives. Additionally, members participate in working groups throughout the year preparing policy recommendations, formulating collaborative best practices, and conducting outreach to consumer groups, think tanks and other industry stakeholders. Most recently, TCN executives participated in the CRC’s Fall 2018 Meeting to discuss hot topics and regulatory developments in the collections industry, such as effective API integration, artificial intelligence, and robocall blocking and labeling, to name a few.

“We are pleased to include TCN in the CRC’s exclusive 2019 roster of technology leaders,” said Stephanie Eidelman, CEO of the iA Institute and CRC’s Executive Director. “Part of our mission is to facilitate a collaborative discussion about where the collection industry can go – while not getting bogged down in where it can’t go. In order to do this, you need thinkers, intelligent risk takers, and knowledgeable innovators.”

With its advanced, cloud contact center technologies, TCN has served the accounts receivable management (ARM) and collections industry since 1999. TCN’s comprehensive software has been proven to increase revenue and recovery rates with its intelligent predictive dialer solution. Its intuitive solution enables collections agencies to be more personalized, perceptive, proactive and progressive when engaging with its customer base.  

To learn more about TCN’s cloud contact center technology for the collections industry, visit: https://www.tcnp3.com/call-center-solutions/collections-arm/

About TCN

TCN is a leading provider of cloud contact center technology for enterprises, contact centers, BPOs, and collection agencies worldwide. Founded in 1999, TCN combines a deep understanding of the needs of call center users with a highly affordable delivery model, ensuring immediate access to robust contact center technology, such as predictive dialer, IVR, call recording, and business analytics required to optimize operations and adhere to TCPA regulations. Its “always-on” cloud-based delivery model provides customers with immediate access to the latest version of the TCN solution, as well as the ability to quickly and easily scale and adjust to evolving business needs. TCN serves various Fortune 500 companies and enterprises in multiple industries including newspaper, collection, education, healthcare, automotive, political, customer service, and marketing. For more information, visit: http://www.tcn.com/ or follow on Twitter @tcn.