Archives for January 2020

The governors of California and New York have both introduced plans to expand their states’ oversight of the credit and collections industry. This appears to be driven by the states’ perception that the Consumer Financial Protection Bureau (CFPB) has “rolled back” its oversight and enforcement activities, thereby creating a need for the states to step-in. It’s going to be a busy year!

California Proposes Mini-CFPB

On January 10, 2020, California’s Governor proposed a budget for 2020-2021 which contemplates the passage of a new California Consumer Financial Protection Law. The new law will essentially overhaul the Department of Business Oversight and transform it into the Department of Financial Protection and Innovation (“DFPI”). Simply put, the DFPI would be California’s version of the CFPB.  

Although the text of the California Consumer Financial Protection Law has not been released, the Governor’s Budget Summary reveals his vision for the DFPI. The DFPI would have expanded enforcement authority to pursue “unfair and deceptive practices” and would give DFPI jurisdiction to supervise debt collectors, credit reporting agencies, FinTech companies, and other financial services providers previously unlicensed and unregulated by the Department of Business Oversight.  

The DFPI costs would initially be “covered by available settlement proceeds in the State Corporations and Financial Institutions Funds, with future costs covered by fees on the newly covered industries and increased fees on existing licensees.” The proposed budget for the DFPI would include a “$10.2 million Financial Protection Fund and 44 positions in 2020-21, growing to $19.3 million and 90 positions ongoing in 2022-23.” 

Specifically, the DFPI’s activities would include:

• Offering services to empower and educate consumers, especially older Americans, students, military service members, and recent immigrants; 
• Licensing and examining new industries that are currently under-regulated;
• Analyzing patterns and developments in the market to inform evidence-based policies and enforcement;
• Establishing a new Financial Technology Innovation Office that will proactively cultivate the responsible development of new consumer financial products;
• Offering legal support for the administration of the new law; and 
• Expanding existing administrative and information technology staff to support the Department’s increased regulatory responsibilities. 

Why is California’s Governor proposing this? The Budget Summary states “California’s economy and its people thrive when predatory business practices are policed and innovation is cultivated . . . The federal government’s rollback of the CFPB leaves Californians vulnerable to predatory businesses and leaves companies without the clarity they need to innovate.” 

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It is now up to California’s Legislature to review and pass the Governor’s proposed budget. The Legislature has until June 15th to pass the budget, which means the public has a short window of opportunity to offer comments to their legislators on the State’s spending priorities. 

New York Proposes Debt Collector Licensing

On January 8, 2020, New York’s Governor released his annual message to the State Legislature, titled “State of the State,” which outlines his proposed agenda for 2020. It reveals that the Governor plans to propose legislation to give New York’s Department of Financial Services (“DFS”) “authority to license debt collection entities, and empower DFS to examine and investigate suspected abuses, including by requiring the submission of information to DFS, and authorizing DFS investigators to enter a debt collector’s office at any time to review its books and records.” 

The proposal explains how licensing debt collectors would give the State greater control over collectors. For example, it would provide the State with a mechanism to collect fines, revoke licenses (thereby preventing certain collectors from collecting in the State), and “combat schemes intended to defraud people into paying debts they do not owe.”

In addition to the above, the Governor has plans to propose more legislation intended to regulate the credit and collections industry, including:

• Introducing a law which prohibits unfair, deceptive, abusive acts and practices (“UDAAP”), thereby making New York law consistent with federal law.
• Eliminating exemptions which currently exist for some unlicensed financial products and services.
• Requiring more supervised entities to pay assessments to the DFS to cover the costs of examinations and oversight. 
• Increasing fine amounts for violations of New York’s Insurance Law.
• Prohibiting lenders from requiring consumers to sign a confession of judgment, thereby codifying the Federal Trade Commission’s rule which prohibits confessions of judgment. 

Like California, the New York Governor stated he is proposing this legislation because the CFPB has recently “rolled back key federal consumer financial protections and scaled-back enforcement efforts in critical areas.” 

Also noteworthy from the State of the State is the Governor’s plan to introduce “three-part nation-leading legislation to unmask and fight back” against illegal telemarketing calls and robocalls. The legislation would: (1) “require telephone providers to block robocalls,” (2) “require rapid implementation of call authentication technology to flag questionable callers,” and (3) “create new penalties against telecom companies that do not comply and double penalties against robocalls for ‘Do Not Call’ Law violations.”

Following McCurley, the biggest trend in new TCPA suits is class actions against lead purchasers contending that lead aggregators falsified leads.

The theories behind these new suits vary. Some suits contend that the data supplied by the lead aggregators was obtained from third-parties as a result of black market purchases or data breach exploitation. Some contend that leads are cooked up by the lead generators themselves, with falsified tokens from third-party consent verifiers documenting website interactions that never took place. These theories are nascent and developing. But they form the backbone of innumerable TCPA class actions winding their way through the Courts at the moment and have placed lead purchasers firmly in the crosshairs. (You can bet your bottom dollar the team is going to address this trend LIVE on stage next Tuesday at Lead generation World.)

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But is any of this true? There has yet to be a single finding–to my knowledge at least–that any reputable lead aggregator has definitively (much less deliberately) sold false leads. Plus the theory makes no sense from a business perspective- why would a lead aggregator dilute the value of its product with fake leads? Sure they might make a few extra bucks in the short term but pretty quickly folks will stop buying their leads as conversion plummets.

So this all smells like a hair-brained conspiracy theory–especially since no reliable evidence of misconduct by aggregators has surfaced (again, at least not to my knowledge or in any case we’ve reported on–other than possibly McCurely). Yet the suits keep piling up.

And in a marked escalation of these lawsuits, things just got personal for Adrian Bacon, a prominent consumer lawyer from California. Yesterday he filed a TCPA suit in federal court in Texas seeking to personally serve as a class representative against a large and reputable lead provider—All Web Leads, Inc–contending that the lead generator was systematically falsifying leads. The allegations of the Complaint—which are just allegations at this point—are as follows:

Defendant’s business practices include making “tens of thousands” of autodialed telemarketing calls to leads every day in order to inquire whether the consumer is interested in purchasing insurance, check the accuracy of their contact information, and determine whether the consumer is interested in speaking with an agent about their insurance needs. After Defendant “qualifies” the lead, Defendant completes a live transfer of the consumer’s phone call to one of its insurance industry customers.

One of the methods in which Defendant generates leads is through the utilization of Internet marketing. Defendant owns and operates various websites that are devoted to offering insurance quotes for specific types of insurance that consumers search for over the Internet. One of the websites that Defendant owns and operates is www.insurancequotes.com.

Upon information and belief, Defendant also engages and works with third-party call centers to contact consumers who never inquired about insurance through any medium. In one instance, a third party, utilizing a sophisticated automated voice response system, contacts consumers and attempts to illicit a positive response from each when the computer asks whether that individual is interested in receiving information about insurance. The computer then immediately forwards the caller’s information as a positive hit to Defendant, who then places a subsequent call to that consumer for the purpose of making a sales pitch. Defendant and/or the third parties believe they have circumvented the TCPA and have legal consent to place the calls to these individuals.

The problem is, on information and belief, the call center forwards contact information for any live body who answers the call and communicates with the automated system, regardless of whether that person gave valid consent to receive subsequent marketing calls from Defendant. Furthermore, there is no question the initial calls from the call centers are placed in violation of the TCPA. Therefore, the call centers (agents) are also liable for violating the TCPA, as are the principals (Defendant).

It remains to be seen whether any of these allegations have merit. All Web Leads declined to comment for the story but I’m pretty sure they’re going to have a lot to say about the lawsuit in court.

So what do you think TCPAWorld? Is this rash of lawsuits just the Plaintiff’s bar’s latest quixotic effort to cash in with bogus lawsuits? Or, far-fetched though it seems, are lead aggregators really selling bogus leads by the barrel full to make a buck, despite the massive risk such conduct would create? I know where my money is, but you have to admit this is interesting stuff–especially since the courts have yet to shut down this sort of lawsuit. The jury is, quite literally, still out.

The complaint can be found here: Bacon

We will, of course, keep you posted on developments.

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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. 

SAN FRANCISCO, Calif. — LiveVox Inc., a leading provider of customer service and digital engagement tools, announced that LiveVox Sr. Director of Product Marketing, Jim Lynch, will join Jennifer Kuechler, COO, Strategic Link, to host a Think Tank on the topic of omnichannel engagement at the upcoming CCW Winter Conference. 

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Strategic Link, an omnichannel fintech leader, will share how a focus on delivering personalized customer experience through data is helping pave the way to the next generation of engagement with technology partners such as LiveVox. The session will also discuss best practices, lessons learned, and new ideas to help overcome key challenges to achieving to optimal business performance in today’s digital age. 

On the event, Jennifer Kuechler, COO, Strategic Link, states, “Although the topic of omnichannel has been popular for more than a decade now, it still remains difficult to achieve. This is often due to businesses taking a bolt-on approach to adding new channels, without a holistic understanding of how these new channels may impact the overall customer experience. Although we continue to see an increased demand for digital channels, customers still expect a unified and cohesive experience throughout their entire customer journey, regardless of how they choose to communicate with a brand. I look forward to sharing more on this topic, as well as some lessons learned at the upcoming CCW Nashville Conference.” 

LiveVox Sr. Director of Product Marketing, Jim Lynch, reiterates this sentiment sharing, “Over the last several years I have had the unique opportunity to work with many contact center leaders as they seek to expand their engagement strategies to incorporate new channels. In the process, I have seen approaches that work, as well as some that don’t. I am excited to be joining Jennifer and other industry leaders at CCW to discuss some best practices that I have learned along the way around how to use data to achieve true omnichannel to meet the needs of today’s digital consumer.”

About the Event:

• Event: CCW Winter 2020
• Session: Omnichannel Think Tank: How to Leverage Data to Optimize an Omnichannel Customer Experience
• Date/Time: January 30th at 10:50am – 12:25pm CT
• Location: JW Marriot Nashville; Nashville, TN
• Register: click here. 

About LiveVox, Inc.

LiveVox is the only one-stop-shop for true omnichannel engagement that unifies modern channels, CRM, and WFO functionality into a single cloud customer engagement platform. Facilitating over 14B interactions annually, LiveVox makes omnichannel easy by unifying all conversations and interactions in one place. Founded in 2000, LiveVox is headquartered in San Francisco with offices in Atlanta, Denver, St. Louis, Colombia, and Bangalore. To learn more, visit www.livevox.com. Info@LiveVox.com

About Customer Contact Week (CCW)

 Started in 1999 as Call Center Week, CCW is the world’s largest customer contact event series. With the balance of conference and expo, CCW is the place where customer care, CX, and contact center leaders come together. In 2018 we’re introducing our new look as Customer Contact Week. CCW is brought to you by the Customer Management Practice – the Analyst, Advisor, and Industry Network for all things Customer Management.

The Consumer Financial Protection Bureau (CFPB) published an announcement soliciting applications for membership to its several advisory committees, including the Consumer Advisory Board (CAB). Per the Dodd-Frank Act, the CFPB is charged with seeking experts in, among other things, consumer protection and consumer financial products or services. 

While membership in the advisory committees generally lasts for a two-year term, the CAB has seen a flux in its lineup over the past couple of years. The CFPB’s Former Acting Director Mick Mulvaney disbanded all advisory boards at the Bureau in June 2018. Later that year in September—still under Mulvaney’s tenure—a new CAB was formed. In 2019, the CAB saw another round of applications. The 2019 CAB’s membership contained mostly new faces (the 2018 CAB contained nine members, only four of which continued to the 2019 CAB).

Applications are available electronically. The application window is open through February 27, 2020. 

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insideARM Perspective

There is one sector of consumer finance that has been notably absent from the last two CABs: the debt collection industry. The last representative from the industry that sat on the CAB was Ohad Samet from TrueAccord, who was a member of the CAB that Mulvaney abruptly disbanded. Prior to that, Joann Needleman of Clark Hill served a full two-year term. Both Needleman and Samet were selected for the CAB when Former Director Richard Cordray ran the CFPB. 

Considering the CPFB’s focus on debt collection, especially as it looks to modernize and innovate the industry through its proposed debt collection rules, it would be beneficial to have a representative from the industry sit on the advisory board. For this reason, we encourage industry members to apply.

While the world is all watching curiously to see whether the SCOTUS will swing the axe this time at the TCPA’s content-specific exemption, a decision yesterday by the Middle District of Florida has drawn my attention, as it held that random or sequential number generation is required for a device to qualify as an ATDS under the TCPA. (See Morgan v. Adventist Health System/Sunbelt, Inc., et al., Case No. 6:18-cv-1342-Orl-78DCI (M.D. Flo., Jan. 13, 2020).) The court’s order adds to the number of cases holding random or sequential number generation is key in determining an ATDS. (Kindly note, refer to our popular post – “TCPAWorld’s Rolling ATDS Review” – for lists of courts’ split opinions.)

Defendant Adventist Health System/Sunbelt, Inc.’s (“AdventHealth”) hospital facility treated a non-party M.R. back in 2015. At that time, M.R. gave AdventHealth permission to contact her at a phone number ending in 2301 (“2301 Number”). Later, this 2301 Number was reassigned to Plaintiff. Defendant Medical Services, Inc. (“MSI”) was a contractor of AdventHealth for the purpose of payment collection. And defendant North American Credit Services, Inc. (“NACS”) was another contractor of AdventHealth for the purpose of debt collection. MSI and NACS placed four calls in total to Plaintiff’s 2301 Number, and as a result of these calls, Plaintiff sued all three defendants for violations of the TCPA.

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In the defendants’ Motions for a Final Summary Judgment on Plaintiff’s TCPA Claims, defendants argue that they reasonably relied on the express consent given by the prior holder of the 2301 Number, and cited to ACA Int’l v. FCC, 885 F. 3d 687 (D.C. Cir. 2018). Defendants also argue that they did not use an ATDS to make calls to Plaintiff because the system used by them to make the calls at issue does not randomly or sequentially generate numbers to be called.

As to defendants’ first argument, the court found that “Defendants read ACA International too broadly.” (See January 13, 2020 Order [“Order”] at p. 4.) The court stated that pursuant to the FCC’s 2015 declaratory ruling, the caller was allowed “one – and only one – liability free, post-reassignment call” to the current subscriber of a reassigned telephone number if it lacked knowledge of the reassignment and had a reasonable basis to believe there was valid consent for the call. However, the ACA Int’l court found that this one-call safe harbor rule is arbitrary, and thus set aside the FCC’s treatment of reassigned numbers as a whole. The ACA Int’l did not adopt any reasonable reliance test or exception when dealing with reassigned numbers. Therefore, the court found that defendants’ argument based on the ACA Int’l failed.

With respect to defendants’ second argument, the court agrees with the majority of the courts in the district that ACA Int’l, “in invalidating the 2-15 FCC definition of an ATDS, also necessarily vacated the prior definitions that the 2015 definition reaffirmed.” (See Order at p. 5.) The court thus determined that it is not bound by the FCC’s 2003 and 2008 declaratory ruling. (Again, refer to another of our popular posts – “The Developments That Rocked TCPAWorld” – for all of FCC’s declaratory rulings as well as other key decisions and developments regarding the TCPA.)

An ATDS must “ha[ve] the capacity … to store or produce telephone numbers to be called, using a random or sequential number generator.” (47 U.S.C. § 227(a)(1)(A).)  Here, the qualifying phrase – “using a random or sequential number generator” – modifies both “store” and “produce.” (See Order at p. 6.) Thus, by looking at the plain language of the statue itself, the court found that a system must have the present ability to randomly or sequentially generate telephone numbers to be an ATDS under the TCPA. Accordingly, defendants’ system is not an ATDS given that it does not have the present capability to randomly or sequentially generate telephone numbers.

For these reasons, the court granted defendants’ summary judgment motions on all of Plaintiff’s claims based on the use of an ATDS, and denied in all other respects.

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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. 

This article 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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Technology is redefining agent productivity

Call center agents are essential to the success of debt buyers and collection agencies – and also their biggest expense. Personnel spending accounts for up to 70 percent of costs, so the industry is constantly looking for ways to boost efficiency. Increasingly, that means adopting digital technology and data analytics.

“As AI (artificial intelligence) gets stronger and more powerful, the percentage of issues handled by automated robots, chats, and even text technology is going to increase. It’s coming pretty quickly,” said Bryce Payne, vice president of sales at TCN, a leading provider of cloud-based call center technology.

As a result, the traditional measure of call center efficiency – agent productivity – is overdue for an update. The number of calls handled and the time it takes to resolve a call are becoming less important. Today’s technology puts the focus on the ultimate productivity metric: net recoveries. That’s the difference between revenue received and the resources spent to generate that revenue – regardless of how many minutes the agent spends on the phone.

Agents bring different skills to the table

An agent with great skill at negotiating solutions to complex medical debt cases should handle more of those cases, while an agent that can relate better to consumers with credit card debts or quickly resolve smaller accounts should be given a different workload. And certain people will respond better to a phone call at 3 p.m. than at 9 a.m.

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“The continued progress and use of technology create an opportunity to better understand how people communicate and interact. For example: A consumer that owes $300 of auto debt may have different communications expectations than a consumer who owes $1,000 of student loan debt. Simply put: Increasing the uses of innovative technologies will expand our understanding about how technology can elegantly supplement collection opportunities,” said Dan Fox, head of product marketing and strategy at SmartAction, which builds cloud-based virtual agents.

Most agencies today are not equipped to segment their accounts into categories that enable higher net recoveries or optimize calling patterns, or to programmatically pair agents and individual accounts.

Modern machine learning technology can solve that problem, feeding agents a steady diet of what they do best while automating many simpler tasks. That’s good not only for the agency, but also for the agents, who may experience more job satisfaction and performance-based rewards—no small matter in an industry with near 100 percent annual employee turnover.   

“You’re looking for agents to get on the phone with authenticated customers who really want to be talking to a person, who need to be talking to a person. If a customer wants to set up a simple payment arrangement, or they need an extension on their bill, these are things they can do with a highly intelligent automated system,” said Fox.

Don’t forget the consumer

Data science and machine learning can also make the experience more agreeable to consumers, leading to better recovery rates. User experience is an underappreciated outcome and many analytics programs come up short in addressing it.

“As the technology advances, you’re going to see robo-agents handling a larger percentage of the calls that come in. The consumer will be given the option to solve their problem in a way that they’re more comfortable with,” Payne said.

Digital channels, including text messages, email, and chat windows, can increase conversions among consumers who prefer not to talk to an agent over the phone. Many people appreciate having more time to respond to a debt collection inquiry without experiencing a live conversation.

“The idea is to make it as easy as possible for the consumer to communicate with us. It doesn’t necessarily make it easier for us to communicate with the consumer,” said Hal Goldstein, Vice President, Operations, Client Services Inc.

New technology can allow agencies to drive better results without relying as heavily on the skills of their best collectors. More calls covered, with better, more timely information, and prioritization of more lucrative accounts should translate to higher revenues from all agents.

In theory, this could also reduce the need for labor. But it’s more likely to make individual agents more efficient and perhaps even keep them in the job longer. That could boost an agency’s bottom line, with no impact on employment.

But that doesn’t mean agents will be going away.

“I don’t think you’re ever going to replace the live agent completely. It’s going to be very, very difficult to get the technology to the point where it can handle all the various nuances of the call,” Payne said.

Technology adoption is lagging

For all the promise of new technology, a surprising number of collection agencies have yet to fully modernize and adopt digital methods. The technology is running ahead of implementation for a couple of reasons.

First, technology upgrades cost money and can temporarily disrupt business. In the short run, agent productivity might actually decline. Agencies should evaluate the impact of any potential changes and contrast that with expected long-term returns on investment.

“You may find that some changes are relatively small, but they will have a significant positive impact on the business. In those instances, it makes sense to move pretty quickly on them,” said Brian Sharp, Director, Analytics & Reporting, CBE Companies.

Second, management needs to buy into any new technology and commit to making changes required to implement it. Many agencies still use systems that were built decades ago. Do they really want to transform their workforce and inventory management systems to make sure the new technology pays off?

“It’s the initial investment that scares people the most. Is it actually going to do what it says,” said Matt Wolk, senior director, risk and contact center efficiency, at Neustar Inc., which provides data to help marketers connect with customers. “Start small. Work your way into it. One of the biggest failures we’ve seen is people try to go too big, too fast.”

In the long run, most agencies are likely to embrace AI and data analytics. Change is coming, and major improvements in agent productivity will follow. How to manage that change will be up to individual agencies, but the industry as a whole is clearly moving in that direction.

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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

2020 members include:

NILES, Ill. — Unifin, Inc (Unifin), a Veteran Owned Small Business that has sub-contracted on the U.S. Department of Education’s (ED) Defaulted Student Loan contract since 2012 is seeking to establish sub-contracts on ED’s Next Generation Servicing Environment contract. 

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Located just outside of Chicago, Ill. inside the old Arrow Financials Services location on Touhy, Unifin has built out a new state of the art call center facility with a seat capacity of 400. Clint Daoud, EVP and Co-Founder stated, “It’s a bit surreal to come back to the place that gave me my first opportunity in the ARM space 20 years ago. We feel like we have some big shoes to fill by being in the space where Arrow once occupied, but we believe we have the team, technology, and know-how to get close!”

Unifin, Inc. is a full-service BPO & Accounts Receivable Management firm licensed and bonded nationally. With experience servicing multiple ED sub-contracts over the past 8 years, Unifin understands the demand, scope, and complexity that an ED sub-contract brings. With a focus on Protecting its client’s brand and image, Compliance, Superior Performance, and Complete Transparency, Unifin is positioned for aggressive growth as a Govt. Sub-Contractor, ARM agency and BPO. 

As veterans on the task order, Unifin’s management and staff understand the complexity and demanding challenges that come with the ED contract.  In addition to traditional collections and skip tracing efforts, Unifin has serviced the ED contract from A to Z. Over the past 8 years, Unifin has:

• Developed and trained a team of professional:
• Managers, Supervisors, and Trainers
• Collectors
• AWG reps
• Operations support representatives (Rehab callers that followed up on declined/NSF payments & missing/incomplete apps)
• Administrative Resolution representatives
• The infrastructure and financial backing in place to support as many agents as the contractor needs
• Physical and IT security to satisfy compliance with ED’s FISMA standards
• Knowledge and experience managing ED compliance audits
• Properly completing the Federal Declaration application
• Experience dealing with Federal requests and on-site agent interviews
• Training material and trainers that can satisfy ED’s requirements for Compliance, Privacy Act, and Security Awareness Training
• The expertise to manage accounts on ED’s DMCS (Titanium) system

Unifin also is:

• Veteran Owned 
• Small Business Self Certified
• Currently Sub-Contracting with a staff of trained ED contract professionals with clearance

For additional information about Unifin’s services, Inc. please contact Clint Daoud at clint@unifirns.com, 847-787-1980 or Scott Nicholson at snicholson@unifinrs.com, 630-674-5211.

The United States Supreme Court just granted a petition for a writ of certiorari in William P. Barr et al. v. American Association of Political Consultants, Inc. et al., No. 19-631, to review the Fourth Circuit’s decision striking down 47 U.S.C. 227(b)(1)(A)(iii) as unconstitutional. (Hold my breath for a second…)

First, some background for this case. Petitioners here, are William P. Barr, Attorney General of the United States (“Attorney General”) and the Federal Communications Commission (“FCC”). Respondents are an association of political consultants and various political organizations. In 2016, respondents sued Attorney General and the FCC in the Eastern District of North Carolina, alleging that “the government-debt exception to the automated0call restriction effects an impermissible form of content-based discrimination, in violation of the Free Speech Clause of the First Amendment.” (See Petition at p. 4.) The district court granted summary judgment in favor of the government and rejected respondents’ claim that the TCPA violates the First Amendment. However, upon appeal by respondents, the Fourth Circuit vacated the lower court’s judgment. The court concluded that “the government-debt exception renders that automated-call restriction ‘fatally underinclusive’ ‘by authorizing many of the intrusive calls that the automated call ban was enacted to prohibit,’ and by ‘imped[ing] the privacy interests of the automated call ban.’” The court of appeals therefore held that the TCPA provision “fails strict scrutiny review” and “violates the Free Speech Clause.” The court of appeals further denied rehearing en banc. (See Petition at pp. 5 and 6.)

Petitioners filed their Petition on November 14, 2019 and presented the Supreme Court with the following question:

Whether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute.

Respondents submitted their brief in support of certiorari on December 4, 2019. They agreed that certiorari should be granted, but on slightly different grounds. Respondents argue that although the Fourth Circuit held that the statute at issue is unconstitutional, it refused to invalidate the speech restriction or provide any other meaningful relief. Instead, the court of appeals “severed” an exception to the speech restriction, and its severability analysis was wrong and therefore required the Supreme Court’s urgent attention. (See Respondents’ Brief.) The question presented by respondents to the Supreme Court was:

Whether the TCPA’s automated-call prohibition is an unconstitutional content-based restriction of speech, and if so whether the Fourth Circuit erred in addressing the constitutional violation by broadening the prohibition to abridge more speech.

Now, attention please: as the Supreme Court granted the petition for a writ of certiorari today (although it did not explain the grounds for granting), this long-fought battle over the controversial robocall ban is likely going to have a winner (in some ways)… The whole TCPA World is watching closely and we will keep you updated as always.

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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. 

The United States Supreme Court just granted a petition for a writ of certiorari in William P. Barr et al. v. American Association of Political Consultants, Inc. et al., No. 19-631, to review the Fourth Circuit’s decision striking down 47 U.S.C. 227(b)(1)(A)(iii) as unconstitutional. (Hold my breath for a second…)

First, some background for this case. Petitioners here, are William P. Barr, Attorney General of the United States (“Attorney General”) and the Federal Communications Commission (“FCC”). Respondents are an association of political consultants and various political organizations. In 2016, respondents sued Attorney General and the FCC in the Eastern District of North Carolina, alleging that “the government-debt exception to the automated0call restriction effects an impermissible form of content-based discrimination, in violation of the Free Speech Clause of the First Amendment.” (See Petition at p. 4.) The district court granted summary judgment in favor of the government and rejected respondents’ claim that the TCPA violates the First Amendment. However, upon appeal by respondents, the Fourth Circuit vacated the lower court’s judgment. The court concluded that “the government-debt exception renders that automated-call restriction ‘fatally underinclusive’ ‘by authorizing many of the intrusive calls that the automated call ban was enacted to prohibit,’ and by ‘imped[ing] the privacy interests of the automated call ban.’” The court of appeals therefore held that the TCPA provision “fails strict scrutiny review” and “violates the Free Speech Clause.” The court of appeals further denied rehearing en banc. (See Petition at pp. 5 and 6.)

Petitioners filed their Petition on November 14, 2019 and presented the Supreme Court with the following question:

Whether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute.

Respondents submitted their brief in support of certiorari on December 4, 2019. They agreed that certiorari should be granted, but on slightly different grounds. Respondents argue that although the Fourth Circuit held that the statute at issue is unconstitutional, it refused to invalidate the speech restriction or provide any other meaningful relief. Instead, the court of appeals “severed” an exception to the speech restriction, and its severability analysis was wrong and therefore required the Supreme Court’s urgent attention. (See Respondents’ Brief.) The question presented by respondents to the Supreme Court was:

Whether the TCPA’s automated-call prohibition is an unconstitutional content-based restriction of speech, and if so whether the Fourth Circuit erred in addressing the constitutional violation by broadening the prohibition to abridge more speech.

Now, attention please: as the Supreme Court granted the petition for a writ of certiorari today (although it did not explain the grounds for granting), this long-fought battle over the controversial robocall ban is likely going to have a winner (in some ways)… The whole TCPA World is watching closely and we will keep you updated as always.

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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. 

On Thursday, the Consumer Finacial Protection Bureau (CFPB) revealed the membership of its newly-created taskforce assigned with reviewing current federal consumer finance laws and regulations. The taskforce will report recommendations for improving and strengthening the same to Director Kathleen Kraninger. 

The CFPB selected Todd Zywicki to chair the taskforce. Zywicki is a professor at George Mason Univesity Antonin Scalia Law School, a Senior Fellow of the Cato Insitute, and the former Executive Director of George Mason University’s Law and Economics Center. Zywicki was also regarded as a contender for the permanent director position at the CFPB after Former Director Richard Cordray stepped down. The role ultimately went to Kraninger.

Zywicki, who sits on the board of the Competitive Enterprises Institute (CEI), and the taskforce received praise from CEI’s Policy Analyst, Matthew Adams, who stated:

CEI has long called for the CFPB to create such a task force to fix government regulations that impede access to credit, and Professor Zywicki is ideally suited to head these efforts. The creation of this task force demonstrates yet another way the Bureau, under the leadership of Kathleen Kraninger, is becoming less of an unwarranted menace to financial institutions and more pro-consumer.

Joining Zywicki on the task force are Dr. J. Howard Beales, III, Dr. Thomas Durkin, and L. Jean Noonan. Beales is a former professor at George Washington University and former director of the Bureau of Consumer Protection at the Federal Trade Commission (FTC). Durkin is a retired economist with the Federal Reserve Board. Noonan is a partner at the law firm Hudson Cook, former General Counsel at the Farm Credit Administration, and former Associate Director fo the FTC’s Bureau of Consumer Protection’s Credit Practice.

Director Kraninger states: 

The Taskforce will conduct a thorough examination of our current regulatory framework and report on how we can improve federal consumer financial laws to benefit and protect consumers. I look forward to the work the Taskforce will undertake and reviewing their recommendations.

The CFPB first announced the taskforce in October 2019, where it sought applications from persons with significant experience and professional recognition in consumer protection, markets, laws, and regulations. 

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insideARM Perspective

The CFPB’s regulatory spectrum might seem narrow—consumer finance—but the reach is quite broad. There are myriad laws and regulations that govern this segment of the financial industry, and not all of them jive well with each other. An example relevant to the debt collection industry is whether or not the CFPB has the authority to regulate the collection of healthcare debt. At one point, the CFPB implied that it did, but its proposed debt collection rules seem to imply otherwise. (See Consumer Relations Consortium comment to the debt collection NPRM, pp. 4-6.) If an example exists in the niche industry of debt collection, there are likely many more examples in the broader industry of consumer financial services. Charging a taskforce to review all relevant laws and regulations as a whole will help pinpoint gaps, which is the first step toward finding solutions.