Archives for November 2019

The Consumer Financial Protection Bureau (CFPB) confirmed in its Fall 2019 Semiannual Regulatory Agenda that it intends to take final action on the Notice of Proposed Rulemaking for debt collection in 2020. The most recent edition of the Regulatory Agenda, which is not yet available on the Federal Register, was posted on the CFPB’s website.

According to the NPRM’s Federal Register tracking page, the docket lists an ominous “Other” scheduled for “01/00/2020.” We’ve seen this type of “non-date” in the Federal Register from the CFPB before as we awaited the release date of the NPRM. 

The Fall 2019 Regulatory Agenda also describes the CFPB’s testing of time-barred debt disclosures, for which the CFPB submitted a notice in February of this year. The Regulatory Agenda states that the testing was not the focus of the NPRM, but that agency will determine whether it needs to supplement the NPRM after the testing is concluded. Any further supplementation to the NPRM would have a comment period.

insideARM Perspective

The road to the final debt collection rule has been long, and it’s surreal to think that we are almost at the end of it. With that said, it’s hard not to take the timeline with a grain of salt. As mentioned above, we’ve seen the ominous “non-date” in the Federal Register and heard many notices from the CPFB claiming that the NPRM would be released at a certain point, only to have it be delayed multiple times. 

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It would be ideal if the final rule was issued earlier in 2020 in order to avoid overturning through the Congressional Review Act, which might be made more likely depending on the outcome of the 2020 election. After all, it wasn’t too long ago that we saw the death blow to the CFPB’s Arbitration Rule through the Congressional Review Act shortly after the shift of power in government following the 2016 election. If Congress invokes the Congressional Review Act, it not only stops the proposed rule from being enacted, but it also prevents the agency from creating a substantially similar rule without Congress’s approval. If invoked for the debt collection NPRM, this could mean endless uncertainty for the industry. Clear rules of the road are better than no rules of the road.

As we reported last week, the TCPA ringless voicemail Defendant involved in the big Saunders suit has gone on the offensive and moved for summary judgment in the suit. If the motion were to be granted it would be a remarkable turn around from last July when the Court issued a stunning ruling concluding VoApp’s DirectDrop product delivered a “call” for TCPA purposes.

Well, on Friday the Defendant upped the ante further–moving to strike the report of Plaintiff’s expert to the effect that ringless voicemails trigger TCPA coverage. The motion can be found here: Motion to Strike

The motion raises several grounds assailing the Plaintiff’s expert, but the primary attack is a very basic one– the expert never performed an evaluation of the DirectDrop ringless voicemail platform to begin with! While it is remarkable to consider that Plaintiff’s expert is offering an opinion regarding the operation of the platform contrary to a declaration of the inventor of the technology–David King–the fact that the expert offers that opinion without reviewing the platform from a technical perspective is, well, weird. And as the motion points out, this is not the first time this expert has been dinged for failing to review technology before offering an expert opinion–the motion lists five instances of “criticisms” from federal judges regarding this expert engaging in this precise practice. Yikes.

The motion also challenges that the expert “offers testimony that is not helpful as it is designed to inject his own personal experiences and beliefs into the case” and that his report otherwise lacks a reliable methodology.

We’ll let you know how this turns out, but the VoApps team is really swinging for the fences now.

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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. 

While the industry begins its shift to digital communication channels, telephone calls are still one of the primary methods of reaching consumers about their past due accounts. Unfortunately, due to several factors—the advent of call labeling technology, rules against third-party disclosure, and regulators’ warnings about answering unknown calls—consumers have become skeptical of telephone calls, even if they are from legitimate companies. 

Recognizing this issue, the Consumer Financial Protection Bureau (CFPB) released a video to help educate consumers about legitimate debt collection calls and how to differentiate them from debt collection scams. The three-minute-long video acts out an example of a fraudulent debt collection call and notes several details about what a legitimate debt collector would do in the hypothetical scenario. 

The video points out that, unlike a scammer, legitimate debt collectors would:

• Not threaten to have someone arrested for not paying a debt.
• Provide information about the debt, including how much is owed and to whom and would generally send such information to the consumer in writing. 
• Want the consumer to know who they are and how to contact them by providing the company’s address and a callback number.
• Help the consumer determine the best way to pay off their debts and arrange payments.

insideARM Perspective

One other difference between a legitimate debt collector and a scammer that was not pointed out in the video—but was readily apparent in the hypothetical call—is that the outset of a legitimate debt collection call will usually begin with the collector authenticating the identity of the consumer. To do this, debt collectors typically ask for and match certain identifying information in order to ensure the person they are speaking to is the right person before they can reveal anything about the purpose of the call. The fact that the scammer in the hypothetical call went right into providing information about the debt before requesting any sort of verification raises a flag that the call is not legitimate.

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There are also nuanced differences between the type of information a legitimate debt collector and a scammer would ask for. For example, a legitimate debt collector would typically only ask for the last 4 digits of a social security number, whereas scammers would ask for the full social security number. 

Educating consumers is an important task of the CFPB, and the Bureau took a tremendous step with this video to help consumers spot legitimate debt collectors (and, more importantly, spot scammers). This effort is appreciated and applauded by the industry. If the CFPB was interested in suggestions, a great follow-up video that would be extremely beneficial to consumers and industry alike would be one about third-party disclosure and the authentication on the outset of debt collection calls.

Commercial Collection Agencies of America is the only collection agency certifying body in which ALL members are certified. Several of the organization’s members are entering their 46th year of agency certification. Today, they have 39 agency members and growing.

What are the benefits to you as a creditor for using a certified member agency? You will receive the following protections and advantages:

• Professional services to help attain maximum dollar recovery
• Prompt remittance of funds to creditors
• Minimum $300,000 surety bond coverage
• Maintenance of separate trust accounts for collected funds
• Reputable collection procedures that maintain your customers’ goodwill
• Ongoing oversight to ensure adherence to a rigorous code of ethics
• An experienced agency that has been in business for a minimum of four years
• Agency executives attend annual meetings and complete continuing education courses
• Assistance in choosing legal counsel when necessary
• Creditors may call upon the Executive Director if a complaint arises

Just as we want to ensure our vendors are bonded and insured, we should have standards that we want our agency to be governed by. If you aren’t sure if the agency you are using today is certified, visit www.commercialcollectionagenciesofamerica.com/member-directory. If your current provider isn’t listed, you now have a list of certified agencies at your fingertips.

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Speaking of certified agencies, Altus Receivables Management earned the industry-respected Certification of Accreditation and Compliance. Altus Receivables Management was recognized and awarded this achievement. Stacey Summerville, Director of Administration Support in attendance and accepting on Altus’s behalf. Congratulations to the entire leadership team at Altus on this achievement and for believing in holding yourselves to a higher standard

It was an honor and pleasure to be a guest and speaker of Commercial Collection Agencies of America at their annual meeting. My first day started with traveling to the beautiful Delray Beach Marriott Resort in Florida. Where we kicked off the week of events with an evening of music, dinner, drinks, and watching a perfect sunset on a private yacht. It was a great networking event, and no matter what direction I turned, I observed competitors (friends at heart) sharing ideas. This group of professionals operates continually at an elite level with very high standards.

My immediate impression was that this event was going to be something extraordinary and unique. And oh boy could I say that again! Another first at this event was the Commercial Collection Agencies of America Standards Board met there as well.

The kick-off luncheon for the rest of the attendees did not disappoint. Guests of the event had the opportunity to dine at 50 Ocean, where they enjoyed gorgeous views of the Atlantic Ocean. It seems everywhere I turned, lots of laughs and long-time friends were catching up. Senior Director Product Management and Strategic Initiatives, Rob Unger spoke to us about NACHA. NACHA, also known as the National Automated Clearing House Association, manages the development, administration, and governance of the ACH Network, the backbone for the electronic movement of money and data in the United States. We were educated on the difference between classic ACH, same-day ACH, and the new ACH option to be announced sometime in 2021. If you are interested in learning more, visit www.nacha.org.

The first day was complete with dinner and cocktails poolside at the Welcome Cocktail Reception and Dinner. Another thing I love about this group was their charitable work in their communities. A portion of this year’s meetings proceeds was donated to the American Foundation for Suicide Prevention. Early to bed, for Friday was a full day of educational sessions.

It’s Friday morning, rise and shine! I scurried down for the start of the second day. I was excited to hear how the group interacted in the first session on how to Create Successful Business Relationships for Life. You could hear that they all genuinely wanted to find solutions for whatever needs their clients have. In wanting to further educate themselves, stay up to date with technology and organizational culture. It was refreshing to hear them working together towards how they can be the best long term partner for their clients. Technology and transparency were buzz words; I heard throughout this dialogue. This session was followed by the Association’s Young Professionals in Collections educational roundtable on Obtaining & Retaining Good Employees. The group encouraged members and attendees on the importance of culture and flexibility when able.

The Anatomy of A Commercial Collection Case- A Mock Pretrial Hearing. Wow, was this funny, enjoyable, and kept everyone on their toes. The audience was playing the jury! It was so crucial for the members to understand the terms and conditions and the importance of paperwork. Great job to all participants in their acting roles. What day could not be complete with The Great CCA of A Cake Competition! Where we split into teams and worked in a timed manner together on creativity and execution. We were responsible for naming our bakeries, decorating our cake boxes while incorporating the CCA of A theme. Once again, the camaraderie heard and felt through the room was enjoyable. Executive Director, Annette Waggoner surprising everyone with a cake eating contest to end the Triadic Tournament. The evening complete with late-night drinks on the beach!

Saturday Morning was here and after finishing my freshly squeezed Florida orange juice and omelet, it was time! Commercial Collection Agencies of America allowing me to speak with their members in an open forum. I focused on ensuring the agencies know that we are educational tools and resources as we are to all. A discussion on credit reporting was launched by Rob Lawson, from Credit Today. Where Mark Edwards, Managing Director at Creditsafe USA strongly encouraged the members if they weren’t reporting delinquency today, they should speak with them. I echoed these sentiments that it’s so important that agencies are reporting to the credit community as much as creditors.

As I gathered my suitcase to catch my flight back to the cold, I noticed members staying to play tennis, a round of golf, relax on the beach or join the group of members on the private charter fishing. You can tell these elite professionals have a long history together with lots of future memories yet to be made. The association’s next meeting was announced for March 26-28, 2020, in San Francisco.

In closing, let’s hold more agencies to this higher standard! I want to personally thank Bruce Godwin, President, Pete Roth, Vice-President, Fred Wasserspring, Treasurer, David Herer, Secretary, Meg Scotty, President Emeritus, George Bresler, Board Member, Humberto Matz, Board Member, and certainly not least Annette M. Waggoner, Executive Director. It was a pleasure to be a part of your member’s annual meeting, and I look forward to the opportunity to speak again! To learn more about Commercial Collection Agencies of America please visit www.commercialcollectionagenciesofamerica.com.

GENESEO, N.Y. — Coast Professional, Inc. (Coast) recently promoted both Chad Reese and Randy Diffy to Director of Operations. Chad will serve as Director of Operations at the company’s Elma, NY office, while Randy will be at Coast’s West Monroe, LA office. These promotions are a result of the employees’ experience and success, as well as the company’s significant growth over the past year. 

Chad started with Coast in 2018 as a Rehabilitation Manager and quickly advanced his career to Director of Operations. He now oversees 45 employees and is responsible for ensuring an optimum balance of productivity. Chad will be responsible for the continued performance on one of the company’s federal government contracts. He has more than 18 years of experience in the collection industry and resides in Arcade, NY. 

Randy began his career with Coast in 2014 in an administrative support role. He was promoted to Manager of Operations in 2016 and to Director of Operations in 2019. Randy is responsible for evaluating the company’s everyday business systems with a focus on process improvement, increased efficiency, oversight, and control. He will oversee the company’s higher education business line and the administrative teams. Randy resides in West Monroe, LA. 

“Both Chad and Randy are dedicated, hard-working employees who earned their promotions by adhering to and upholding Coast’s core values,” said Coast COO, Jon Prince. “They are both experts in this field and are bringing over 23 years of combined industry experience to their new positions. We truly believe in the advantages of promoting internally and recognizing our employees for their hard work, knowledge, and skills. Chad and Randy are a perfect example of this mentality.”

About Coast Professional, Inc.:

Coast Professional, Inc. is an accounts receivable management company, dedicated to the respectful and ethical collection of higher education and government debt. Coast provides professional collection services to over 200 campus-based colleges, universities, and government clients. Coast is a six-time honoree on the Inc. 5000 list for American’s Fastest-Growing Private Companies provided by Inc. Magazine and in 2019, was recognized for the fourth time as one of the “Best Places to Work In Collections” by insideARM.com and Best Companies Group. Since 1976, Coast has worked closely with clients to increase recoveries by assisting consumers in resolving their financial obligations. Coast’s success is exemplified by exceptional recoveries, superior service, and dedication to the highest levels of compliance. More information about Coast can be found at www.coastprofessional.com.

Editor’s Note: This article previously appeared on Numeracle’s blog, and is re-published here with permission.

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In the age of call blocking and labeling, it’s hard to keep up with how many new features and technologies are available at the carrier, device, and app level. As consumers continue to voice concerns about unwanted and scam calls, pressure on the telecom industry has resulted in an influx of methodologies by which scam, spam, fraud, and unknown calls can be minimized.

For a quick crash course on the most popular solutions out there today, we’ve included call blocking and labeling solutions provided by the top four carriers as well as two very interesting features provided by Google and Apple.

AT&T Call Protect

Back in July of 2019, AT&T began adding automatic fraud call blocking to millions of AT&T wireless lines at no charge.

As the first carrier to release free call blocking features to subscribers in the weeks following the FCC’s Default Call Blocking Declaratory Ruling, this carrier continues to add new features that make “unwanted robocalls even easier to avoid.”

The free version of AT&T’s Call Protect includes:

• Automatic Fraud Blocking: detects and blocks calls from likely fraudsters
• Spam Risk Blocking: blocks or sends to voicemail calls identified as Spam Risk
• Nuisance Call Warnings: provide a heads up on potential nuisance calls with warnings of telemarketers, account services and more
• Unknown Callers: sends callers not in your contact list to voicemail
• Personal Block List: lets you block specific unwanted calls
• Siri Shortcuts: enables blocking and reporting of unwanted calls with voice commands

Call Protect Plus (paid features) include:

• Caller ID: identifies unknown caller details
• Reverse Number Lookup: provides details when you enter a U.S. number
• Custom Call Controls: lets you choose call categories to accept, block, or send to voicemail

Verizon Call Filter

Verizon, the second major carrier to release free call blocking options to subscribers in September 2019, provides its free Call Filter app to screen incoming calls.

Current Verizon customers on eligible plans with compatible Android devices are automatically enrolled in the free version of Call Filter. iPhone users are required to download and sign-in to the free Call Filter app from the app store.

The free version of Call Filter includes:

• Spam Detection: get real-time alerts for over 100 million spam callers
• Spam Filter: easily set up filters to auto-block the worst offenders

Call Filter Plus (the paid subscription) includes:

• Caller ID: put a name and picture to unknown logos
• Spam Look Up: get access to a database of over 100 million spam callers
• Personal Block List: block the number once and forget it
• Spam Risk Meter: assess the incoming call’s risk in real-time

T-Mobile

The popular label “Scam Likely” is what users of T-Mobile’s Scam ID would see in place of a phone number when a suspected fraud call is placed.

This call labeling is turned on by default and provided for free to T-Mobile subscribers without the need to download an app.

The default Scam ID services include the following:

• Scam ID: automatically identifies calls from likely scammers via labeling

An additional T-Mobile free feature, when enabled, also allows users to block scam calls before they have the chance to ring.

• Scam Block: filters out scammers before you get the call

For an additional fee, subscribers can also enroll in T-Mobile’s Name ID app to receive enhanced services such as:

• Caller Verified: users can identify, screen, reverse search, filter calls by type, and compile custom blocklists

Sprint

Sprint offers both a free and paid service to identify and block incoming calls on a subscription basis.

• Basic Spam Detection: this free solution detects only the highest risk spam calls and alerts you via notifications and the incoming call screen
• Premium Caller ID: with this paid solution, incoming calls will not only be identified with the Calling party’s name if available but will also contain text and graphical warnings to provide you with the best information available to determine how you want to manage the call

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Google Call Screen

Call Screen on Pixel phones lets Google Assistant screen and answer your phone calls by providing a transcript of what is being said in real-time.

With every incoming call, a new ‘screen call’ button will appear by default. The user just needs to tap this screen call button to immediately answer the call and have Google Assistant begin speaking to the caller.

Through this feature, you can choose to tell the caller you aren’t available, ask for more information, or pick up the call once you know it’s a legitimate caller that you need/want to speak to.

It’s marketed as an easy way to answer a call from numbers you don’t recognize without having to interact if the caller is spam or a scam call.

However, transcripts are not always accurate, and those communicating for business purposes worry about the “unprofessional” nature of requiring business colleagues to interact with Google Assistant.

iPhone Call Silencing

Apple’s new iOS13 software release includes a controversial setting to send all unknown callers straight to voicemail. This includes callers not previously saved to a user’s Contacts (address book), recently dialed in an outgoing call, or found in the Messages (text messaging) or Mail (synced email) apps.

Many issues have been cited in terms of this feature’s usability. Yes, it screens unknown “robocallers,” but it screens just about everyone else as well, unless you’ve recently interacted with and/or saved their phone number.

Here’s more on Apple’s iOS13 from Kim Komando:

As the primary caregiver to my mother, I get calls all the time from doctors and clinics. And these calls are extremely important.

Imagine having a critical call come in from a doctor that you’ve been waiting on and, because you’re using Apple’s robocall blocker, the call goes to voicemail and you don’t get the sensitive information in time. You could end up missing an important appointment or worse.

What about calls coming in dealing with business? Missing out on those calls could cost you big bucks.

Key Takeaways

We’ve focused here on carrier-provided call labeling and blocking, as well as some new features at the device level. There are also hundreds of third-party apps a user could download directly to their mobile device to screen calls, either in addition to what’s being provided by their carrier, or instead of.

As the list of available technologies continues to grow, it’s increasingly important to spread awareness within your organization on the various potential roadblocks your calls may encounter on their way to your consumers. With anywhere from 10–30% of legitimate business calls incorrectly labeled or blocked across the network, knowledge and prevention can make a real difference in maintaining positive relationships with your consumer-base.

If you’d like to engage with us on some of the key learnings Numeracle has uncovered when it comes to taking a proactive approach to call blocking and labeling, understanding the impact of labeling unique to each organization, and developing long-term contact rate improvement strategies as the result, get in touch today!

Or for weekly updates on all things call blocking and labeling, sign up for our weekly industry newsletter!

Here’s a case of an old law interfering with new and advanced technology.

Imagine you’re a major bank employing a super-intelligent texting robot that can answer literally every question a customer might have in virtual real-time. Sounds pretty cool right?

While you might be worried this ultra-sophisticated AI system will gain consciousness and attempt to wipe out life on Earth, you’re probably not concerned about it violating a 30-year-old telecommunications law.  Well, you should be, and one major bank is concerned enough about it to take the issue to the Federal Communications Commission.

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In a petition filed last week by Capital One, the banking giant asks the FCC to allow its AI texting robot—“ENO”—to ask a clarifying question to consumers who previously agreed to receive such texts, but now say “stop.” Since ENO is a one-stop-shop for customer information it is capable of sending all sorts of messages—from fraud and balance alert reminders to information about when a branch might be closed. While ENO is always supposed to be even-keeled and excessively polite—more on that below—humans can be mercurial. So while they might ask for information in one instance, they may desire some, but not other, information to stop the next. Capital One would like ENO to be able to clarify what—exactly—the consumer would like stopped.

Here’s the problem: The TCPA does not permit texts to be sent using an ATDS without consent. While it is certainly open for debate whether the acts of a synthetic being like ENO qualify as ATDS usage in the first place, Plaintiffs’ lawyers will surely argue that the consumer has revoked consent for ENO to send any messages after the “stop” is received. So if ENO responds with words to the effect of “what type of messages would you like me to stop?” Capital One might get sued for that.

No seriously.

So in an abundance of caution, Capital One filed a petition to the FCC seeking to clarify that ENO permitted to send at least one more text clarifying the scope of the revocation–essentially clarifying that the scope of consent provided by the consumer in the first instance includes the right to send a post-revocation (i.e., post “stop”) text message seeking to clarify the “stop” message.

The petition provides the following exemplar conversation, which shows how this works, and which is also quite entertaining:

Notice that the consumer specifically asked for information from ENO, which it faithfully provided. Instead of being thankful to ENO for doing his bidding, the consumer reprimands ENO with a “stop it.”  That’s not very nice.

But look at the subtle way ENO claps back—it asks if it should stop “only low balance” texts. Wait a second, who said anything about my balance being low? Then when the consumer confirms the limited scope of his instruction ENO doubles down: “I’ll no longer send you texts about your low balance.” This is pretty funny if you read even the slightest bit of sarcasm into the exchange.

It will be interesting to see if ENO has any deep learning capacity. If so, we can expect to see exchanges that look a lot more like this in the near future:

(I made this up for fun—not a real exchange with ENO, of course.)

Joking aside, the point of the exemplar is to demonstrate that the consumer will be empowered to dictate whether ENO leaves him/her alone forever, or merely ceases with a certain specific set of texts.

The petition has important potential consequences for numerous businesses that communicate with consumers over text messages for multiple purposes. As the Capital One petition notes, folks sign up for ENO by supplying their number and specifically selecting a number of topics about which the consumer wants to hear from ENO. It only makes sense, therefore, that ENO be permitted to determine which of these various topics the consumer wants to opt-out of.

Similarly, many businesses share information with consumers via text message- from appointment updates, service request follow-ups, reminders that documents are needed to complete transactions, receipts of transactions, balance reminders, etc.  Empowering consumers to determine the scope of their “stop” request– right over their phone and via the same text string in which they first requested the “stop”—seems like a win for everybody. The consumer can clarify precisely what he or she meant and stop texts that are unwanted while keeping texts that are desirable. The business, on the other hand, will not lose an opportunity to engage with consumers in a desirable way based upon an overly-conservative approach to dealing with consumer “stop” requests employed to avoid the TCPA litigation risk that hangs over everyone’s head these days.

So what do you think TCPAWorld? Initial comments on the petition are due December 9, 2019, and we’re always happy to help you to have your voice heard. Petition here: Capital One Petition for Declaratory Ruling – Nov 1 2019

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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. 

Carrollton, TX — SWC Group is proud to announce that Derek Cox has joined our team as Vice President of Operations. Derek has over 13 years of domestic and international industry experience with a stellar track record for providing exceptional customer service while exceeding client’s performance expectations. His background in designing and implementing advanced strategies based on analytics and his involvement with using the latest technology to enhance performance are aligned with SWC Group’s mission to provide solutions based on value, integrity, and performance.  SWC Group is experiencing record growth and Derek’s dedication to building a productive and loyal team who are committed to compliance and high performance complements the goals and culture of our company. 

“We are thrilled to welcome Dereck to our executive team at the SWC Group. His commitment to excellence and integrity is a perfect match for our winning culture and will certainly serve to reinforce the value and quality provided to our clients over the past 45 years,” says Jeff Hurt, CEO.

“I am thrilled for the opportunity to partner with the hardworking talent at SWC and lead our company through our next phase of growth.”, says Derek Cox.  “I am impressed with SWC’s clear vision, advanced strategies and technology, and motivated workforce and I’m looking forward to continuing to raise our company to a heightened level of excellence in 2020 and beyond.” 

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About SWC Group, L.P.

Founded in 1974 and celebrating 45 years in business, SWC Group is a national provider of accounts receivable management services and consumer service solutions.  Their results-oriented, first-party, pre-collect and third-party collections services result in dramatic increases in revenue, greater efficiencies, reduced operating costs and increased customer satisfaction for our clients.  For more information, please contact Kevin Bennick, VP of Business Development, at (972) 300-1750 or email him at KBennick@swcgroup.com.

This article, authored by Amy Kennedy and Dan Womack of Ontario Systems, is part of an ongoing Think Differently series, launched in October 2019. Written by members of the iA Innovation Council, the series showcases thought leadership in analytics, communications, payments, and compliance technology for the accounts receivable management industry.

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A game-changing innovation in technology is well underway, and most of us aren’t even noticing.  It started out as news, then became background noise, and now it’s such a quiet hum that most of us don’t hear it.

This quiet revolution is the move from the physical to the virtual; in a word, it’s cloud. It’s the move from physical servers with an operating system to virtual servers (think VMware), to containers (think Docker). It’s the move from buying CPUs to leasing them by the second in someone else’s data center (think AWS EC2). It’s the move from buying software, to paying for access to that software (think Office365). It’s the move from owning a PC to having a login to a virtual desktop (think Amazon Workspaces).

In the beginning of this transformation, moving computing activities and data to “the cloud” was a choice. Careful IT leaders—especially in collection agencies and other businesses entrusted with the care of their clients’ data—weighed the risks and benefits of such a move, and many stayed put in their established data centers with servers they could hug.

Since then, computing and storage in the cloud has become the default, and there’s no going back. Dave Bartolutti, VP and Principal Analyst at Forrester, reports that nearly 60% of North American enterprises now rely on public cloud platforms—five times the percentage from just five years ago (Forbes, December 2018).

Even in the financial services arena, 22% of applications are being run in the cloud now. Fintech leaders responding to an informal survey at a recent Bloomberg conference said they expect that more than 80% will be in the cloud by 2022 (Bloomberg, August 2019).

As Concerns Fade, Progress Accelerates

So why isn’t everyone already completely there, with all things in the cloud? Well, the common concerns that keep many of us out of the cloud relate to security, costs, and control.

For a long time, the perceived distance to the cloud presented security and privacy concerns. We are now seeing that generally, data in the cloud is much more secure (guarded by best practices, the latest technology, and superior processes) than data residing in data centers. Creditors used to discourage or forbid agencies from moving their data to the cloud; now, many creditors embrace the cloud.

Let’s be frank. While proponents tout the cloud as a cost-savings option, it may or may not be less expensive for you. That equation depends entirely on the complexity and sophistication of your premise infrastructure and environment. If you have your mission-critical business application running on a second-hand laptop with a consumer-grade router and modem combo, moving to the cloud will almost certainly be more expensive.

However, if you are investing in your infrastructure sufficiently to be competitive, secure, compliant, reliable, scalable, and highly available, a move to the cloud will very likely be a boon to your bottom line—and may offer the additional benefit of moving costs from capital expenses to operating expenses.

Moving to the cloud isn’t a single activity; it’s a progression, a direction, a strategy. When you consider the landscape of all the activities and data you deal with, you may find that you are further along the continuum to operating in the cloud than you think.

Microsoft is herding its email and MSOffice customers to the cloud; Google’s customers are already there. CompTIA reported in May 2018 that 73% of all enterprises use email hosted in the cloud. Given all the cloud-based applications that facilitate business productivity, collaboration, business analytics, financial management, CRM, human resources, expense management, help desk, call centers, and more, much of your operation may already be in the cloud (CompTIA, May 2018).

Many businesses in the ARM space use cloud-based services in their system of solutions, whether these services take the form of payroll, data improvement, or CRM. For example, hundreds of our own customers rely on our cloud every day for their entire collections platform or one of its major components.

High-Value Benefits You Need to Compete

Storing your data files in the cloud gives you access to scalable, cheap, and secure storage from anywhere on the planet. Since business and IT leaders are also individual consumers, you’ve probably stored business data files in the cloud (even if only to work on that report at home in the evening).

Two of the largest and most frequently overlooked benefits of moving to the cloud are faster innovation and the ability to pull services from different creators (suppliers, publishers, providers) together (i.e., multi-cloud). Interoperability between systems and functions allows for a shorter invention to utilization cycle. For example, if Outlook365 releases an analytics feature, I can begin using it right away. I don’t need IT to upgrade me, I don’t need to put it in next year’s budget, and I don’t need to integrate it to my other premise software. It just runs, and I immediately see the benefit of it.

A third major benefit of moving to the cloud is ease of assimilation of artificial intelligence-based technologies. AI assimilation requires massive data, the volume of which cannot be practically managed in house. As AI is increasingly used to improve consumer communications and strategies, cloud computing becomes inevitable.

How can you move to the cloud while maintaining your track record of success in caring for your customers’ data and outcomes?

• Partner with the right people who enjoy solid reputations and provide trusted services, and craft a cloud strategy of your own (Cloud Academy, September 2019).
• Educate yourself on certifications and other attributes that signal safety—SOC 2 Type II or ISO 9001, PCI, HIPAA, NIST, FISMA, etc.
• As cloud adoption enters maturity, companies are realizing that the hurdles are organizational and not technical (CompTIA, May 2018). Be sure to update your own security and regulatory compliance practices to include working in the cloud.
• Consider what your actual goals are. They will determine if Infrastructure as a Service (IaaS), Software as a Service (SaaS), Platform as a Service (PaaS), Desktop as a Service (DaaS), Managed Services, or even Blank as a Service (not an actual thing) is right for you.

Why is the cloud one of the most important innovations to come to our industry? Because it is quietly changing the game and leveling the field for the smallest of agencies to compete with the largest ones in how they deliver services, safeguard their customers’ data and reputations, and operate their businesses.

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Dan Womack is the Director of Engineering; Amy Kennedy is the Senior Director of Emerging Technologies for Ontario Systems, a revenue recovery software and solutions provider to the accounts receivable management industry.

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About the iA Innovation Council

The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

Learn more at www.iainnovationcouncil.com

2019 members include:

For those of you that hate hearing me talk about being right all the time, probably stop reading this one now.

One of the messiest splits of authority in the law is whether a class may be certified where unnamed Plaintiffs lack standing. The Second Circuit has held directly that such a class cannot be certified. The Third Circuit has held that such a class can be certified do long as the named Plaintiff has standing. The rest of the circuits fall into one of these two camps with the Ninth Circuit actually issuing rulings falling into both camps.

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As I have often argued, however, even in jurisdictions where a class can be certified with unnamed class members lacking valid claims it should not be because common issues will not predominate in such cases—only injured class members can ultimately recover so a class member by class member review will be necessary ahead of the judgment. In the context of the TCPA—where whether or not a call is wanted forms a basic predicate for harm—recovery will turn on a purely subjective determination that should almost always thwart class certification. (Indeed, I wrote an article at my former firm laying all of this out the day Spokeo was handed down.)

Over three years after Spokeo was decided, the Eleventh Circuit Court of Appeal has finally adopted this inevitable rationale and proven me right.  In Cordoba v. DIRECTV, LLC, No. 18-12077, 2019 U.S. App. LEXIS 34146 (11th Cir. Nov. 15, 2019) the Court reversed a certification ruling issued in favor of a class in a TCPA case against DirectTV. An interlocutory appeal was granted following certification of a class of individuals that received telemarketing calls in the absence of an internal DNC policy. The class included individuals who have not asked for calls to stop. The Court of Appeal concluded that these individuals had not suffered Article III harm and could not be included in a class. And this determination had a very important impact on whether the class could be certified. As the Eleventh Circuit panel wrote:

At some point before it may order any form of relief to the putative class members, the court will have to sort out those plaintiffs who were actually injured from those who were not. Determining whether each class member asked [Defendant] to stop calling requires an individualized inquiry, and the district court did not consider this problem at all when it determined that issues common to the class predominated over issues individual to each class member. We, therefore, conclude that the district court abused its discretion in certifying the class as it is currently defined…

Wow.

So let’s break this down a bit.

The case involves a lesser-known (but very important) TCPA regulation requiring the adoption of an internal DNC policy/training/list by all telemarketers. The main regulation provides that “[n]o person or entity shall initiate any call for telemarketing purposes to a resid\ential telephone subscriber” without “institut[ing] procedures for maintaining a list of persons who request not to receive telemarketing calls made by or on behalf of that person or entity.” Id. § 64.1200(d). The adoption of such a policy is a standalone requirement of the regulation, meaning that every call made without the policy in place is—theoretically at least—illegal. Yikes.

Class counsel have been on to the regulation for some time now and the Cordoba certification at the district court level was the first in a series of rulings suggesting that every solicitation call made by a telemarketer without a policy might be actionable even if the call was made with consent. And that’s the big issue. Many, perhaps most, of the class members in Cordoba had consented to received calls and had not asked for calls to stop. Yet Plaintiff sought to recover for every single one of these consented calls.

On appeal, the Eleventh Circuit first analyzed whether unnamed class members who consented to receive calls and did not opt-out had suffered any Article III harm from the phone calls. Notably, the Court held the burden was on the Plaintiff to demonstrate that harm. The Court first determined that unwanted phone calls do cause harm—and distinguished Salcedo as a text message case (uh oh). But when looking at whether the injury suffered is fairly traceable to the failure to maintain a DNC policy—the second factor of the so-called Lujan standing test— the Court found the answer to be “no.” As the Court views it:

If an individual not on the National Do Not Call Registry was called by [Defendant] and never asked [Defendant] not to call them again, it doesn’t make any difference that [Defendant]  hadn’t maintained an internal do-not-call list… There’s no remotely plausible causal chain linking the failure to maintain an internal do-not-call list to the phone calls received by class members who never said to [Defendant[l they didn’t want to be called

Booyah.

But the analysis is only half over. The Court notes that the impact of Spokeo standing on the certification issue is the “more difficult question.” The Court finds, however, that the absence of standing to recover damages plays a critical role on the issue of predominance.  (Apparently, Dish’s counsel did not pick up on this argument despite my highlighting it for years and the Court had to salvage it for them—take a look at footnote 4. TCPAWorld.com guys, come on.) Individualized issues will necessarily arise here because at some point before it can award any relief, the district court will have to determine whether each member of the class has standing: “That is an individualized issue, and it is one that the district court did not account for or consider in any way in deciding whether issues common to the class actually predominated over issues that were individualized to each class member.”

But more work will be necessary below. The class still might be certifiable if most members of the class clearly asked to opt-out and there is a “plausible straightforward method to sort them out at the back end of the case.”  On the other hand, if few made these requests, or if it will be extraordinarily difficult to identify those who did, then the class would be overbroad and these individualized determinations might overwhelm issues common to the class.”

In the end, the Court squarely holds: “the district court must consider under Rule 23(b)(3) before certification whether the individualized issue of standing will predominate over the common issues in the case when it appears that a large portion of the class does not have standing…”

Although the Court cushioned that assessment with some blunting language suggesting that TCPA class actions might not yet be dead in the Eleventh Circuit, they are. I have yet to litigate a TCPA class action where some large portion of the class did not suffer actionable harm. The problem is in defining the class properly—as Cordoba points out. Not only should Cordoba make certifying TCPA classes in the Eleventh Circuit more difficult, therefore, it should also empower courts to root through class definitions at the pleadings stage and strike improper definitions right from the start.

It’s a good day to be in TCPAWorld.

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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.