Archives for August 2019

On Friday, Wired published an opinion article by David Vladeck, the former director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection, criticizing the Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Rulemaking for debt collection (NPRM). Vladeck, currently a law professor at Georgetown and a board member with the National Consumer Law Center, specifically takes issue with the use of hyperlinks in electronic communications from debt collectors and the lack of contact frequency limits for electronic communications. 

According to Vladeck, the CFPB’s proposed rule regarding the use of hyperlinks creates a potential for exposing consumers to cyber threats such as viruses, malware, and phishing scams. Regulators, such as the FTC, have specifically warned consumers to not click on links sent from unknown addresses or phone numbers. If debt collection emails and text messages contained hyperlinks, then consumers may be reluctant to click on them due to the fears outlined above. In this case, consumers would not receive important disclosures, such as the validation notice that outlines the consumer’s rights and how to dispute a debt.

Vladeck points out that with the boom of debt buying, a consumer’s ability to know their dispute rights is more important than ever. He states:

Debt buyers sell and resell debts for years on end, typically without account records verifying that the debts are accurate, making the validation notice even more essential. Without one, a consumer won’t be told how to dispute a debt, and they may be harassed for a debt they do not owe. According to an analysis of the CFPB’s complaint database, 44 percent of complaints against debt collectors concern attempts to collect a debt that the complainant does not owe. Worse yet, the collector could report the debt to credit reporting agencies, damaging the person’s credit, or even bring suit.

(Original source: Wired.)

The opinion article also points to the NPRM’s opt-out provisions and the lack of contact frequency limits for electronic communications. Vladeck writes, “People could opt out, but the proposal does not specify how, and collectors might require an inconvenient method. Consumers should have a right to simply reply ‘Stop.’” 

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insideARM Perspective

While the NPRM proposes the use of hyperlinks in electronic communications if certain conditions are met, recent things like the Seventh Circuit’s Lavallee decision and the above opinion article might put things in limbo. Lavallee found that including a hyperlink in a debt collection email that leads consumers to a secure portal with account information and disclosures does not count as an initial communication, at least not if the consumer does not click on the link.

There are three issues to point out for this discussion in general. 

First, the opinion article referenced above does not address the procedures outlined in the NPRM regarding the conditions a debt collector must meet before using hyperlinks. The article makes it seem as if the consumers are going to receive emails out of the blue with hyperlinks to disclosures under the proposed rules as written. However, proposed § 1006.42(d) (NPRM, pp. 479-80) states that hyperlinks to disclosures may only be used if the consumer was previously given notice that they would receive important disclosures via a hyperlink, and the consumer has the ability to opt-out of the use of hyperlinks if desired. The NPRM allows for including the contents of a validation notice—thus eliminating the need for hyperlinks to disclosures—within the body of the email. Realistically, most debt collectors would probably opt for this option as it requires fewer steps and does not conflict with Lavallee. 

Second, contrary to the opinion article, the NPRM does indeed require debt collectors to maintain methods for the consumer to opt-out of \electronic communications, and it is simpler than the article makes it seem. Proposed § 1006.14(h) (NPRM, p. 461) specifically states that a debt collector may not use a communication medium that the consumer specifically requested not be used, putting the power in the consumer to control how a debt collector communicates with him. Subsection (2)(i) specifically states that a consumer may opt-out of electronic communications in writing. 

Third, without the use of hyperlinks, text messaging becomes all but unusable in the context of debt collection since the required disclosures would not fit within the character limits of a text message. Since the NPRM’s call frequency provision is premised on the ability to freely use electronic messages such as email and text messages (naturally capped by the rule against harassment and abuse), and since one of these forms of communications would be made unusable if hyperlinks are not permitted, then it follows that the call frequency limits should be raised or eliminated since one of the underlying premises will no longer be true.

Today, the State Attorneys General of North Carolina, New Hampshire, and Arkansas announced a set of Anti-Robocall Principles that, to date, have been agreed upon by twelve carriers to combat illegal robocalls. All 50 State Attorneys General, plus the District of Columbia, have also signed on.

The agreement commits the signatories to combat illegal robocalls through prevention and enforcement reflected by the following eight principles:

Principle #1. Offer Free Call Blocking and Labeling. For smartphone mobile and VoIP residential customers, make available free, easy-to-use call blocking and labeling tools and regularly engage in easily understandable outreach efforts to notify them about these tools. For all types of customers, implement network-level call blocking at no charge.  Use best efforts to ensure that all tools offered safeguard customers’ personal, proprietary, and location information.

Principle #2. Implement STIR/SHAKEN. Implement STIR/SHAKEN call authentication.

Principle #3. Analyze and Monitor Network Traffic. Analyze high-volume voice network traffic to identify and monitor patterns consistent with robocalls.

Principle #4. Investigate Suspicious Calls and Calling Patterns. If a provider detects a pattern consistent with illegal robocalls, or if a provider otherwise has reason to suspect illegal robocalling or spoofing is taking place over its network, seek to identify the party that is using its network to originate, route, or terminate these calls and take appropriate action. Taking appropriate action may include, but is not limited to, initiating a traceback investigation, verifying that the originating commercial customer owns or is authorized to use the Caller ID number, determining whether the Caller ID name sent to a receiving party matches the customer’s corporate name, trademark, or d/b/a name, terminating the party’s ability to originate, route, or terminate calls on its network, and notifying law enforcement authorities.

Principle #5. Confirm the Identity of Commercial Customers. Confirm the identity of new commercial VoIP customers by collecting information such as physical business location, contact person(s), state or country of incorporation, federal tax ID, and the nature of the customer’s business.

Principle #6. Require Traceback Cooperation in Contracts. For all new and renegotiated contracts governing the transport of voice calls, use best efforts to require cooperation in traceback investigations by identifying the upstream provider from which the suspected illegal robocall entered its network or by identifying its own customer if the call originated in its network.

Principle #7. Cooperate in Traceback Investigations. To allow for timely and comprehensive law enforcement efforts against illegal robocallers, dedicate sufficient resources to provide prompt and complete responses to traceback requests from law enforcement and from USTelecom’s Industry Traceback Group. Identify a single point of contact in charge of responding to these traceback requests, and respond to traceback requests as soon as possible.

Principle #8. Communicate with State Attorneys General. Communicate and cooperate with state Attorneys General about recognized scams and trends in illegal robocalling. Due to the ever-changing nature of technology, update the state Attorneys General about potential additional solutions for combatting illegal robocalls.

To date, the carrier coalition of companies includes AT&T, Bandwidth, CenturyLink, Charter, Comcast, Consolidated, Frontier, Sprint, T-Mobile, U.S. Cellular, Verizon and Windstream.

At this point, there is no deadline imposed as to when these initiatives must be in place, but reportedly Josh Stein, the attorney general of North Carolina and one of the leaders in developing the document, told The Washington Post ahead of the announcement that the “expectation is they will all implement them as soon as practical.” When asked further about how companies would be held accountable if they permitted their networks to be used for illegal calls, Attorney General Stein referred to state consumer statutes against unfair and deceptive practices.

You can watch the full press conference, which took place at the National Press Club in Washington, D.C., here.

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Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved. 

TORONTO, Ontario—Debt Control Agency (DCA), today announced the addition of Neil Casselman as Executive Vice President of Sales. In this role, he will oversee the development and implementation of DCA’s sales strategy and business development intended to increase DCA’s presence in the ARM/Collections space.

“With more than 25 years of Collections/ARM global solutions and product marketing experience, Neil has a proven track record of driving business results through innovative program design and building lasting relationships with stakeholders across a variety of industries,” said Mohsen Monavari, President and CEO, DCA.”

Neil will be responsible for the growth and development of innovative new program offerings while also growing traditional contingency and 1st party outsource markets while promoting DCA as the ‘brand name’ in the Collections/ARM space. 

About DCA

Debt Control Agency (DCA) is a leading national provider of collections and receivables management services.  With contact centres in Ontario and Quebec, DCA is headquartered in Toronto. We are nationally licensed and provide consumer and commercial debt recovery services to our clients in various industries.

DCA is results-driven and focused on servicing our clients with the highest collection recovery rate while maintaining the best standards of customer responsiveness in the industry. Keeping this in mind, we continually invest in the company and our greatest asset, our people. DCA staff is thoroughly trained during onboarding as well as continuously subjected to standardized testing and monitoring. Our senior management team has held key positions within the collections industry and have over 100 years of combined experience.

For more information about DCA visit: www.debtcontrolagency.com

ATLANTA, Ga.—Each year, the FFAM360 offices in Atlanta, Phoenix, and Paso Robles organize a school supply drive to help families’ back to school efforts. This year’s drive collected backpacks and various school supplies, ensuring that 20 families and over 50 children arrive at school equipped and prepared to learn. Items collected include backpacks, supply boxes, glue sticks, binders, paper, crayons, pencils, tissues, and much more.

More than 15 million kids in the US live in extreme poverty and arrive at school without the necessary learning materials. Increasingly, teachers rely on families to provide many needed classroom items. For those already struggling to make ends meet, this time of year can be especially stressful. The FFAM360 annual back to school supply drive helps families fulfill classroom supply list requests.

“At FFAM360, supporting our communities is not just our corporate social responsibility, it’s our commitment to working for a greater purpose,” says President and Chief Investment Officer Matthew Maloney.  “For many parents, the financial burden of expensive school supplies can be a strain on an already tight budget. We are passionate about the youth in our communities and want to help them soar towards a brighter future. That’s why we sponsor local families and provide children with the materials that are essential for success.” 

“Intentional living is the choice to support one another and support the causes that have impacted our lives. By weaving philanthropy and community support into the fabric of FFAM360’s corporate culture, we believe that we can drive positive change,” continues Mr. Maloney. “Intentional living is the choice to work in accordance with our values and beliefs. Again this year, our employees’ commitment to our intentional living campaign is sending dozens of children back to school prepared and confident. For many children, simply starting with a new backpack brimming with supplies helps to promote a happy school year.”

About FFAM360

The FFAM360 group of companies deploys world-class people, operations, and technology to deliver revenue cycle solutions to their clients that optimize their credit and revenue lifecycles. Founded in 2002 with the vision of creating a best-in-class organization that provides comprehensive solutions across the Insurance Subrogation, Healthcare, Staffing, and Financial Service sectors, FFAM360 has achieved many significant awards and recognitions including being honored by the Women’s Business Enterprise National Council (“WBENC”) as a Certified Women-Owned Business Enterprise. FFAM360 is headquartered just outside Atlanta, GA, with additional offices in Phoenix, AZ and Paso Robles, CA.

You know that scene in the Dark Knight Rises where Bane tells Batman that there “can be no [true] despair without hope?” I never really understood it—in fact, I thought the notion rather dull— until now.

Imagine falling victim to the largest TCPA verdict in history—up to $925MM—only to seemingly have your sins washed away by the grant of a retroactive waiver of liability. And then experiencing the despair of having that victory ripped from you upon a finding that you had waived the applicable defense.

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First the lesson— if I’ve said it once I’ve said it a thousand times—move to stay cases pending FCC proceedings. Most often when we are discussing stays pending FCC rulings we are discussing primary jurisdiction stays in relation to the FCC’s Public Notice TCPA proceeding. But as one Defendant just found out—in spectacular fashion—failing to move to stay a case pending any potential FCC ruling in your favor might have a truly disastrous effect—to the tune of $925MM in potential damages.

Followers of TCPAWorld.com already know well the saga of ViSalus in the epic battle against Edelson PC and a certified class in  Wakefield v. Visalus, Inc.. In short, a class of pre-recorded message recipients was certified on the theory that none of the class members had consented to receive the telemarketing messages. At the time the Defendant asserted various arguments—mostly involving ascertainability—in a bid to defeat certification. Having virtually conceded that the messages were left without appropriate consent, however, the court certified the class in June 2017.

In September 2017—a couple of months after the case was certified—ViSalus filed a petition with the FCC seeking a retroactive waiver of its obligation to collect express written consent for customers for whom it already had consent—just not consent that was “up to snuff” under the FCC’s new rules. Despite filing the petition, ViSalus (apparently) did not update any of its disclosures or discovery responses or pleadings to assert a potential consent defense and did not—and here’s the key—seek to stay the case pending the outcome of the FCC’s consideration of its petition.

With no request to stay the case, it barreled on to trial in April 2019 resulting in a breathtaking jury verdict—that you read about first here on TCPAWorld.com—that ViSalus had made 1,850,436 prerecorded telemarketing calls without consent and in violation of the TCPA. As the TCPA mandates a $500.00 per call minimum statutory award—subject to due process limitations—the jury’s verdict could sustain a judgment as high as $925MM. (The Plaintiff’s request to treble this award to an eye-popping ~$2.8BB was mercifully denied in June 2019.)

Many of the calls underlying the verdict, however, related to the timeframe for which ViSalus had sought a waiver of liability from the FCC. You see where this is headed.

On June 13, 2019, the FCC granted ViSalus’ request for a retroactive waiver of liability respecting many of the phone calls underlying the verdict against it. Although the parties disagreed as to the scope of the retroactive waiver, there was not dispute that at least some of the calls underlying the verdict had just been washed away by the FCC and that alone—it seemed—gave ViSalus the ammunition it needed to decertify the class, at minimum, and seek a new trial on new evidence.

That sets the table for yesterday’s ruling in Wakefield v. Visalus, Inc., Case No. 3:15-cv-1857-SI, Doc. No. 344 (D. Or. Aug. 21, 2019)(Wakefield IV). There the court duly considered the record and flat refused to decertify the class post-judgment owing to ViSalus’ perceived failure to properly assert the consent defense to begin with.

Taking up the issue of the retroactive waiver first—for, verily, ViSalus raised numerous arguments in favor of decertification— the Court determined that ViSalus had sat on its consent defense too long and thereby waived it, thereby snatching away the apparent victory afforded by the FCC. Framing the issue succinctly: “Although ViSalus knew that it had applied for a retroactive waiver from the FCC as early as September 2017, and knew that the FCC previously had granted waivers to many petitioners similarly situated to ViSalus, ViSalus did not plead consent as an affirmative defense, the parties did not conduct discovery on the issue of consent, and consent was not at issue in the jury trial.” Among its many perceived omissions, however, the Court’s most stinging jab is a brief declarative:

ViSalus never asked to stay the litigation pending the FCC’s ruling on ViSalus’s petition.

Ouch.

From there it was a short walk to concluding ViSalus had waived its defense of consent: “ViSalus was not diligent when it failed to raise the consent defense earlier, with full knowledge that its application with the FCC was pending. Had ViSalus been diligent, the Court would have had the advantage of a developed record on the issue of whether ViSalus obtained written consent. The relevant precedent, here the FCC’s previous orders granting waivers to at least nine similarly situated petitioners, foreshadowed the FCC’s decision to grant ViSalus’s petition such that ViSalus was not taken by surprise when its petition was granted…  Its failure to raise the consent issue given the likelihood that the FCC would grant its waiver petition was unreasonable, and Plaintiff would be unfairly prejudiced by being denied the opportunity to take discovery on the issue of consent and argue to the jury why ViSalus did not, in fact, obtain written consent.” In a short and extremely painful sentence:

The Court holds that ViSalus has waived reliance on the affirmative defense that it obtained prior written consent from class members and will not consider the FCC’s recent order as a basis to decertify the class.

I need some Advil. Maybe some bourbon.

But the ruling goes on.

The second ray of hope ViSalus had to work with was a convoluted jury form in which the jurors wrote in that they “could not tell” how many calls were made to landlines vs. cell phones. This seemed to be a critical thread that could be pulled by defense lawyers to unravel any potential judgment—but alas, this hope too was dashed in Wakefield IV. As the court put it: “that further distinction is not relevant.” This is so because “[u]nder the TCPA, liability attaches to any call made either to a residential landline or to a cellular telephone, so ViSalus would be equally liable for calls made to either kind of telephone. See 47 U.S.C. § 227(b)(1). Similarly, the statutory damages do not differentiate between calls made to residential landlines and cellular telephones.” So it mattered not, in the court’s view, what type of phone was being called.

But what about the fact that the TCPA’s restriction on calls to landlines pertains to residential lines only? Doesn’t the difference between cell phones and landlines necessarily matter because if there is no way to identify landlines there can be no way to identify business landlines and hence the judgment is overinclusive?

Short answer—not on the record before the Court. Plaintiff had introduced evidence that ViSalus obtained phone numbers by requesting only home numbers and cell phones. In the Court’s view, the jury could reasonably infer that all class members honestly provided only their residential lines in response to this form. And there was no contrary evidence presented. As the Court put it— “ViSalus has only speculated that some class members might have used their home telephone lines for primarily business purposes.”

The Court also makes short work of ViSalus’ argument that the messages were not telemarketing in nature, did not actually play, or were subjectively desired by class members. On each of these points, the Court found that the evidence supporting ViSalus’ position simply was not sufficient to disturb the verdict.

So what next? Well, ViSalus still have one very obvious arrow left in its quiver—the due process argument recently affirmed by the Eighth Circuit in Golan. Notably, ViSalus raised the issue of crippling damages as an assault on the superiority of the class action vehicle to resolve the claims at issue but—as the court noted— “ViSalus has not [yet] asked this Court for a remitter, or to reduce the award if it is unconstitutionally excessive…” That seems to be an open door to raise Golan—then again it may be some sort of suggestion that ViSalus has once again failed to properly (timely?) raise a key defense. Let’s hope it’s not the latter.

For now, it remains to be seen whether ViSalus can yet unwind this judgment. Golan offers yet a bit more hope, but then again, we all know what Bane has to say about that.

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Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved. 

CHERRY HILL, N.J.—MRS BPO LLC, a leading provider of services to the accounts receivables management industry, today announced the launch of Adam, a proprietary conversational IVR that services customers. Adam is a blend of AI and IVR which learns and expands every day. It combines state-of-the-art voice recognition technology from IBM Watson with decades of contact center customer interaction experience, resulting in a unique product that reduces cost and improves customer experience. 

Michael Meyer, Chief Innovation Officer of MRS BPO said, “Adam exists in an agile technology environment and we are always adding more intelligence and capabilities to him. We’re constantly finding new ways to make use of IBM Watson to help add more intelligence into every facet of Adam. It’s allowed us to reach a level of customer experience that is a huge win for our clients and their customers.”

Adam is a fully managed software as a service built with an adaptable framework that allows for quick integration of APIs and customization that will allow for a variety of uses. Adam greatly augments call handling. He is available after hours and can handle thousands of simultaneous calls at once. Contact centers handle a multitude of calls that are not core to their primary business. 

Adam leverages, Watson Assistant, a solution that enables clients to build conversational interfaces into applications, devices and channels. Updated with new voice and speech-to-text capabilities, the solution enables Adam to assist customers on a wide range of topics, such as disputing a debt, disclosing a bankruptcy or communicating the death of a customer, make a payment or a series of payments or to pay a balance in full. One-way speech-to-text is also fully functional and two-way texting will be available soon. 

Adam disposes of wait time for customers and most importantly, compliance errors. Because Adam does the same thing the same way, every time. 

“Artificial intelligence is becoming fundamental to business and driving dramatic advances across every industry,” said Aameek Singh, vice president, Watson Applications and Solution, IBM Data & AI. “IBM’s leading virtual assistant technology, Watson Assistant, provides businesses with a tool to ensure customer questions are answered quickly and accurately, while also ensuring that employees are empowered to do their jobs efficiently.”

Initial beta testing began in April 2018 and roll-out to Operations began in early 2019. “In the debt collection industry, Adam is a first of its kind, fully functional conversational IVR. This ground-breaking technology has literally transformed our operation. When customers engage with Adam, they do so by speaking naturally. There’s no need to listen to menu options and repeatedly press numbers on their keypad. Adam’s ability to understand and complete tasks, while handling large volumes of calls, has created operational efficiencies and increased recoveries to levels we’ve previously never seen,” said Co-CEO Jeff Freedman. 

Additional info about this partnership can be found at: https://www.ibm.com/case-studies/mrsbpo-voice-gateway

About MRS BPO

MRS BPO LLC is a full-service accounts receivable management firm that offers pre chargeoff collection and post chargeoff recoveries services to a variety of industries. Founded in 1991, it has grown from a small New Jersey-based agency to a large market provider with facilities in New Jersey, Ohio and Alabama, servicing over sixty clients in the financial services, automotive, marketplace lending, telecommunications, cable, and municipal sectors.  MRS has been recognized by many of its Fortune 50 clients for their commitment to compliance, quality and best-in-class technology solutions. For more information, visit https://www.mrsbpo.com. 

About IBM & Artificial Intelligence
A world leader in AI for business, IBM has deployed Watson solutions in thousands of engagements with clients across 20 industries and 80 countries. IBM’s Watson solutions are widely used in industries, including by 7 of the 10 largest automotive companies and 8 of the 10 largest oil and gas companies. Additionally, IBM Research is a world leader in the science of AI. In 2018, IBM secured 1,600 AI-related patents.

WARRENVILLE, Ill.—On August 8th, 2019, employees of RMS-Recovery Management Services, Inc. gave back to the community and joined forces with Feed My Starving Children to pack nutritious meals for hungry children around the world.  During the event, organized by R. Scott Radke – co-founder of RMS, over 30 employees prepared 1,200 meals for needy children. “It was a very humbling experience to be able to impact so many children in such a short period of time. I’m proud of my team and look forward to our next packing event”, said Radke.

About Feed My Starving Children

Founded in 1987, Feed My Starving Children (FMSC) is a Christian non-profit that provides nutritionally complete meals specifically formulated for malnourished children. For additional information, please visit www.fmsc.org.

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About RMS-Recovery Management Services, Inc.

RMS is a privately held, woman-owned collection agency.  Since 1998, RMS has provided debt collection services to colleges and universities nationwide.  RMS’ commitment to ethical business practices, legal compliance and client satisfaction sets us apart in our industry. RMS is a member of ACA International and the Coalition of Higher Education Assistance Organizations (COHEAO).  For additional information, please visit www.rmscollects.com.

On Friday of last week, the Northern District of Illinois foiled what appears to be an attempt by a consumer attorney to drum up a Fair Debt Collection Practices Act (FDCPA) violation by a debt collector. Garcia v. Miramed Revenue Grp., LLC, No. 18-cv-1384 (N.D. Ill. Aug. 16, 2019) is an example of the litigation dilemma faced by debt collectors as previously discussed on insideARM.

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In this case, the plaintiff had a past-due medical debt that the service provider placed with Miramed Revenue Group (Miramed) for collection. Miramed sent a collection letter that contained phone numbers, an address where the plaintiff can send correspondence, and a link to a website where the plaintiff can make a payment. Notably, there was no email address or invitation to email communications on the letter.

Despite the letter’s clear instructions on how to communicate with Miramed, the plaintiff’s attorney sent a message through a completely separate website’s “contact us” section. Miramed’s affiliated parent company Miramed Global, which is not a debt collector, owned this website. The message requested that Miramed—not the parent company—stop calling the plaintiff’s cell phone. The court notes that the law firm “used Microsoft’s snipping tool to screenshot the contents of the message and saved that screenshot to its server.” 

After Miramed continued to place calls to plaintiff’s phone number, the plaintiff sued—represented by the same law firm that sent the communication to the plaintiff’s parent company. Defendant filed a summary judgment motion on the issue, which the court granted.

At first, the decision looks a little grim because the court found that the bona fide error defense did not apply. While the parent company would forward messages that it thought were meant for Miramed, there were no policies and procedures in place to ensure this happened. Typically, only “a handful” of messages would get forwarded per month.

The decision then takes a positive turn. The court granted summary judgment in favor of Miramed, finding that there was no evidence that it received the message, which is a requirement for a cease and desist request under the FDCPA.

The court states:

Though a reasonable juror could conclude that Miramed Global received the request, given the lack of procedures in place requiring it to pass along relevant messages, that does not mean that Miramed received it. That Miramed Global sometimes forwarded messages it thought were intended for Miramed, does not allow the inference that Miramed received Garcia’s message.

…

Though the two companies are affiliated, they are not the same, and notice to one does not automatically count as notice to the other.

insideARM Perspective

This is not a unique situation. Debt collectors regularly deal with these types of crafty violation baiting attempts. Some examples include:

• A jury finding Lexington Law guilty of fraud by sending mass volumes of dispute letters to debt collectors.
• The call baiting about whether the account can be disputed over the phone.
• Consumers baiting violations via scripts typically obtained from consumer attorneys.

With the one-sided nature of the attorney fee provision and the strict liability nature of the FDCPA, these types of attempts are unlikely to go away. It creates an easy target, even of debt collectors who in good faith try to do right by consumers and comply with the myriad federal and state requirements governing the industry. The good news is that the Consumer Financial Protection Bureau has taken notice, at least indirectly, and brought its own lawsuit against Lexington Law.

Well, the Wolverine state is now at war with itself—and I’m not talking about college football.

As we’ve reported previously, the Eastern District of Michigan has repeatedly followed the statutory approach to interpreting the TCPA’s phrase “ATDS” and required random or sequential number generation to state a TCPA claim. A court in the Western District of Michigan weighed in on the fight over the proper interpretation of an ATDS this week, however, and sided with the Ninth Circuit’s expansive holding in Marks that all dialers that call from a list of numbers automatically qualify under the TCPA.  This is the first time that Marks has been adopted within the Sixth Circuit and represents a further expansion of the Ninth Circuit’s TCPA reach.

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In Allan v. Pennsylvania Higher Education Assistance Agency, No. 2:14-cv-54 (W.D. Mich. Aug. 19, 2019), the Court granted the plaintiffs’ motion for summary judgment requesting an award damages for the 353 calls the defendant made to the plaintiffs’ cell phones using a system that automatically dialed numbers from a list created using specific selection criteria (i.e., not randomly or sequentially generated).  In analyzing the issue of whether the defendant’s phone system qualifies as an ATDS, the Court ignored the Third Circuit’s decision in Dominguez v. Yahoo, 894 F.3d 116 (3d Cir. 2018) and the many other district court decisions we have previously reported on which have held that an ATDS must be capable of generating random or sequential telephone numbers.  Instead, the Court in Allan noted that “[t]he only circuit court to analyze the issue in depth since the D.C Circuit’s ruling in ACA International is the Ninth Circuit.”  The Court then analyzed the Ninth Circuit’s decision in Marks, highlighting the provisions of the TCPA that it claimed “presumes a definition of an ATDS that includes equipment dialing from a list of individuals.”  Without further discussion, the Allan Court agreed with the Ninth Circuit’s conclusion that “the statutory definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator” and held that “because there is no question that the [defendant’s phone system] . . . uses store[d] telephone numbers to be called and automatically dials those numbers, the system qualifies as an ATDS.” 

The court’s decision in Allan, however, is not entirely bleak for defendants caught up in the ATDS confusion.  After concluding that the calls at issue violated the TCPA, the Court rejected the plaintiffs’ argument that the defendant violated the TCPA willfully and knowingly by continuing to call plaintiffs using an ATDS after they revoked consent to receive such calls.  The Court found that, because the defendant’s violations were made at a time when the FCC had equivocated on whether the type of system it used qualified as an ATDS, the defendant’s violations were not willful or knowing and, therefore, not subject to treble damages.

The takeaway here is plain—the battle over the TCPA’s ATDS definition is still raging on. Although court’s adopting the “statutory approach” are now the more numerous—and particularly so in 2019—a surprising number of courts continue to show a willingness to apply Marks.

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Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved. 

ATLANTA, Ga.—Check Into Cash, a national industry leader in direct lending and short-term credit solutions with hundreds of retail locations across the country and an ever-expanding online presence, has selected Telrock, a global technology provider of SaaS-based software solutions, to provide their enterprise-wide collections and recovery platform Optimus.

Telrock’s cloud-based modern collection and recovery platform, Optimus, was developed from the ground up to meet the broad and rich set of capabilities desired by sophisticated organizations such as Check Into Cash, says Dale Williams, CEO of Telrock. Williams adds, “Optimus readily supports the high degree of flexibility, automation, control, and ease-of-use that today’s collection operations want but most other collection software systems can’t provide.”

“Check Into Cash selected Optimus because it represented the most complete solution for our business,” says Phil Korn, Vice President of Check Into Cash Collections. “Optimus covered certain key requirements we wanted, in particular, a more intelligent collector interface design, real-time processing capabilities, strong compliance, and reporting tools, and embedded digital channel customer engagement and self-serve capabilities.”

About Check Into Cash®

A pioneer in the short-term, direct-lending industry, Check Into Cash has provided financial solutions since its founding in 1993. Based in Cleveland, TN, Check Into Cash serves customers nationwide, providing flexible solutions and options, in-store and online, to fit customers’ needs. 

Check Into Cash is a founding member of the Community Financial Services Association of America (CFSA), the nation’s trade organization for the short-term loan industry. The CFSA enforces compliance, best practices, and works with state legislators and federal consumer groups to promote responsible legislation in an effort to balance the needs of customers with the interests of the industry. 

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About Telrock

Headquartered in Atlanta, Ga., and London, England, Telrock is a global technology provider of SaaS-based software solutions for enterprise-wide collections and recovery and digital channel customer engagement. Their clients include major banks, other credit providers, and business process-outsource companies in North America and Europe. Telrock’s solutions are SaaS-based; are built on highly scalable modern,     open-source technologies; and are deployed in secure PCI-compliant data centers. Visit www.telrock.com to learn more.