Archives for September 2020

SAN DIEGO, Calif. and MANASQUAN, N.J. — Nancy Hughes and Bob Picone, two highly respected industry executives, are proud to announce the establishment of Connect1 Consultants. Nancy currently owns and operates Sync Now, LLC while Bob is the owner of RJP Consultants. The formation of Connect1 Consultants allows both companies to continue the high level of services our clients expect under one umbrella.

We have over 65 years combined industry experience in BPO, collections and recovery management, debt portfolio sales, capital raise, analytics, fraud prevention, data security, technology, compliance and more.

Connect1 Consultants specializes in matching the right vendors with the right clients. We work with Fortune 500 companies across several verticals including financial, healthcare, communications and cable, retail and more.

“I truly could not have found a better person and partner in Nancy and I am excited to continue my successful journey in the industry.  It’s great to see the positive impact that we make in many different areas for our clients,” says Bob.

“I echo Bob’s sentiments! It is rare to find such synergy in a partnership that it not only provides our clients best in class service, but has allowed us to grow and expand our offerings substantially since forming our alliance,” says Nancy.

For more information, contact:

Nancy Hughes
858-877-0551
nhughes@connect1consultants.com 

Bob Picone
732-600-6265
rpicone@connect1consultants.com

GENESEO, N.Y. — Coast Professional, Inc. (Coast) was recently named to the Inc. Magazine’s Inc. 5000 list of the nation’s fastest-growing private companies. This is Coast’s seventh time being named to Inc.’s prestigious list of high-growth organizations. Coast has demonstrated continued revenue growth over the past decade and in the last three years, the company has experienced a revenue growth of 346 percent.  

In the last year, Coast has seen company success and growth through the opening of additional office spaces in East Aurora, NY and West Monroe, LA. Coast’s consistent forward progress is an indication of the company’s dedication to compliance, as well as an established reputation of providing exceptional service to consumers.  

According to Everett Stagg, Coast President and member of the company’s Shareholder’s Board, being named to a nationally ranked list such as Inc. 5000 is the result of a company-wide philosophy based on strict professionalism and compliance.  

“The Inc. 5000 list is extremely competitive and I am proud of our team for their consistent, diligent effort to overcome, persist, and remain innovative in this industry,” said Stagg. “We are looking forward to another year of continued growth and opportunity.” 

A complete list of the Inc. 5000 fastest growing private companies, including individual company profiles can be found at www.inc.com/inc5000. The top 500 companies are also being featured in the September issue of Inc. 

About Coast Professional, Inc.: 

Coast Professional, Inc. is an accounts receivable management and call center-based company, dedicated to the respectful and ethical communication with consumers. Coast provides professional call center services to over 200 campus-based colleges, universities, and government clients. Coast is a seven-time honoree on the Inc. 5000 list for America’s Fastest-Growing Private Companies provided by Inc. Magazine and in 2020, was recognized for the fifth 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 

Yesterday, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Encore Capital Group, Inc. and its subsidiaries—Midland Funding, LLC and Midland Credit Management, LLC—for allegedly violating terms of the 2015 consent order between the parties, specifically as it relates to collection litigation disclosures and time-barred debts. Read on for a summary of the claims made against the Encore defendants.

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Account-Level Documentation Disclosure and Requests

The 2015 consent order required Encore and its subsidiaries, prior to filing collection litigation, to provide consumers with a disclosure that the companies would provide original account-level documentation at no cost to the consumer within 30 days of a request. The complaint alleges that the defendants failed to state that the documentation would be provided at no cost in 750,000 incidents since the effective date of the consent order, and failed to state that such documentation would be provided within 30 days upon request in 25,000 incidents.

The complaint also alleges that, after consumers requested the account-level documentation, the defendants failed to provide them in 250 incidents. 

Time-Barred Debt Issues

The 2015 consent order prohibited the defendants from filing collection litigation on accounts that were time-barred by the applicable statute of limitations. It also required that the defendants provide a specific time-barred debt disclosure if defendants were engaging in non-legal collection efforts on such accounts. The complaint alleges that the defendants failed to do both of these. Specifically, the complaint alleges that the defendants sued on 100 time-barred debt accounts since the 2015 consent order and failed to provide the time-barred debt disclosure in 425,000 letters. Of the latter, 845 consumers made payments totaling $125,000.

International Transaction Fees

The complaint also alleges that the defendants began using a foreign payment processor, which resulted in consumers’ banks charging the consumers international transaction fees.

Encore’s Response

Encore released a statement regarding the lawsuit, stating:

Our efforts in 2015 to implement the CFPB’s new requirements under the consent order were quite thorough and effective, but for a very small percentage of transactions our execution was not immediately perfect. We have long since refined our processes, making the necessary changes to improve our operations, and provided appropriate relief for impacted accounts over three years ago.

…

We are disappointed that the CFPB has chosen to file this lawsuit on outdated issues, but we will continue to engage with the CFPB and work to ensure that we maintain policies and practices that fully comply with all applicable legal requirements. We believe that there will be no material operational impact as a result of the suit.W e fully corrected the issues underlying the allegations in this lawsuit years ago and are unaware of any unresolved consumer impact.

insideARM Perspective

Some of these allegations need to be put in perspective. Let’s keep in mind that earlier this year when the CFPB released its Supplemental Notice of Proposed Rulemaking for time-barred debts, the CFPB acknowledged that:

[D]etermining whether the statute of limitations for a particular debt has expired can, in certain cases, be a complex undertaking, and debt collectors may be uncertain about whether a particular statute of limitations has passed even after conducting a reasonable investigation.

It was one of the reasons why the CFPB proposed a “know or should know” standard regarding the determination of whether a debt is time-barred.

But, let’s take a look at the numbers in some of the claims made in the lawsuit against Encore. The complaint alleges that Encore filed lawsuits on 100 time-barred debts since the 2015 order went into effect. That’s 100 lawsuits in the 4-year span covered by the claims, which averages about 25 lawsuits per year. For perspective, the complaint mentions that Encore and its subsidiaries are the largest debt buyer in the United States. Even the FDCPA acknowledges that errors happen even if robust policies and procedures are in place, and debt collectors are relieved from liability in such instances. 25 incidents per year for the largest debt buyer would fall squarely into this category, especially considering the CFPB’s own acknowledgment that calculating the time-barred status of a debt can be complex.

The same analysis goes toward the allegation that Encore failed to provide consumers with requested account-level documentation in 250 incidents. In a 4-year span, that averages to roughly 62 incidents per year. For the largest debt buyer in the United States that like receives an unimaginable amount of consumer requests each day, this also smells like bona fide error.

We, of course, don’t know the facts or the background of these allegations. But what we do know is the CFPB’s own litigation tactics against debt collectors. A few years ago, the CFPB sued Weltman, Weinberg & Reis Co., L.P.A., where the CFPB dropped many of its claims on the day of trial. This was after many years of time-consuming and resource-consuming pre-litigation and litigation tactics that cost the debt collection law firm—which won the lawsuit, by the way—$1.2 million to defend. This doesn’t even take into consideration the taxpayer dollars used to pursue the ultimately baseless claims.

We’ll be watching closely to see what the CFPB does in the Encore lawsuit, especially on the two claims referenced above. The “throw the spaghetti on the wall” litigation tactic doesn’t look good on anyone.

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. 

I guess I should have seen this coming, but I didn’t. After forcefully battling to keep the TCPA on the books just last term, the U.S. Government has weighed in on the new Supreme Court TCPA ATDS debate. Instead of arguing for an expansive reading of the statute, the Government is asking the Supreme Court to narrowly interpret the statute to only apply to dialers that randomly or sequentially generate numbers to be called. This really does change everything.

And no, I’m not just talking about the compelling legal points raised in the brief, though the brief is outstanding. The brief reads with much more persuasive force than the Opening briefs in Barr. The grammatical analysis of the TCPA’s ATDS definition is elegant and compelling—far better than most of the tortuous I’m-trying-to-explain-something-I-don’t-really-understand arguments you tend to see in these briefs. And the cut-to-the-chase policy analysis is outstanding as well.

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Yes, as with most Supreme Court briefs, the Government’s position is confidently and directly conveyed and seemingly leaves little room for doubt. But the potent advocacy in the brief is not the key here. Rather, it’s that the Government has now (finally) spoken authoritatively on the scope of the TCPA’s current ATDS definition. 

After all of the battling, all of the wrangling, all of the advocacy to the FCC—there it is. A quiet filing the afternoon before Labor Day that nearly everyone missed. The Government has now had its say: the TCPA only applies to random fire dialers. Great. Now we know.

Pack it up, folks. We win. Right?

I mean, that’s everything right there. This isn’t like Barr where the government was arguing whether the TCPA is constitutional; this is the government weighing in on what the TCPA was intended to cover. That feels pretty authoritative; just like an FCC ruling interpreting the Act but from a different wing of the federal government. And sure, technically, a position statement taken by the US Government made in an advocacy piece to the Supreme Court is probably not binding (probably), but do we really expect the Supreme Court to disagree?

Sure, it’s technically too early to call this one for the good guys, but read this brief folks (Facebook–Government Brief). I’m convinced. And I have a very hard time believing that SCOTUS will ignore the Government’s position on the intended narrow reach of a federal statute.

I wonder whether Mr. Duguid himself—and his counsel—might start to think about simply laying down their weapons at this point. You’re on the wrong side of this thing, guys. The TCPA was not designed to do what you thought it was. Accept it and move on.

Let’s discuss policy to the policymakers, not to SCOTUS. That’s not where you want to be with this Court and you know it. (Big picture guys.) It’s in everyone’s best interest to get this statute cleaned up but that has to start on the Hill.

[Updated 9/8/2020 at 2:40PM Eastern: See update below.]

In response to Hurricane Laura, the State of Louisiana enacted a state of emergency which, among other things, prohibits any form of telephonic solicitation. The prohibition will remain in place until the state’s Emergency Operations Center lifts it. While there was initially some confusion about whether this prohibition applies to debt collection calls, an ACA Member Alert clarifies that debt collection calls are included.

Initially, Louisiana’s Public Service Commission Do Not Call Program Manager Brenda Headlee informed the industry association that debt collection calls were not encompassed by the state of emergency. Unfortunately, Headlee’s office had uploaded the wrong statement to its website and provided an incorrect interpretation of the rule to the association. The corrected statement is now on the state’s website, and, according to ACA, the new statement encompasses debt collection calls.

There is some question about the applicability considering the definition of “telephone solicitation” in Lousiana’s Do Not Call Program General Order. In the order, telephone solicitations include calls for several purposes, including “for the purpose of encouraging an extension of credit for property, consumer goods, or services; … or services or an extension of credit for such purposes, or for the solicitation of a contribution to a charitable organization.” However, the general order does carve out an exception for calls “[p]rimarily in connection with an existing debt or contract, payment or performance of which has not been completed at the time of such call.”

Update: insideARM has heard from several sources that Ms. Headlee that collection calls are to stop during the pendency of the emergency order, and that it will likely expire later this week.

NORTH ANDOVER, Mass. — The founders of F.H. Cann & Associates (FHC), a company that delivers world-class accounts receivable management and contact center solutions, are pleased to announce that they have awarded two $1,000 scholarships to recent graduates of Lawrence High School in Lawrence, Massachusetts. 

To learn more about F.H. Cann & Associates and the services that they offer, please visit https://www.fhcann.com. 

Sheri Traficante-Cann, President/CEO of FHC, noted the scholarships were awarded through the Exchange Club of Lawrence and the Andovers. Frank Cann, Executive Vice President of F.H. Cann & Associates, is a board member of the organization. 

Remy Garcia is one of the recipients of the F.H. Cann & Associates Scholarship. She is a recent graduate of Lawrence High School and plans on attending Salem State University in the fall.  

“She was awarded the Yale Book, which is given to a high school student who has an outstanding personal character and intellectual promise,” Sheri Traficante-Cann noted, adding that Remy also received the L-PIN award and was a member of Top Notch Scholars, through which she has volunteered at the Cor Unum Meal Center. 

“Remy was also a member of the Outdoors Club and the Yearbook Club.” 

The second recipient of the F.H. Cann & Associates Scholarship is Gladdys Jiminian, who also graduated from Lawrence High School. Gladdys will attend NECC. 

As Ms Traficante-Cann noted, Gladdys was a member of the Lawrence Youth Council, activities volunteer at the Edgewood Retirement Home, and Next Generation Leadership Network.  

“Gladdys also participated in the Dual Enrollment at Northern Essex Community College, and she was also a member of the Dance Team at Lawrence High.”

The fact that F.H. Cann & Associates awarded two scholarships to local high school graduates will not surprise the many clients who have worked with the company since it first opened in 1999.  

The company’s team has earned a well-deserved reputation for giving back to the community; in addition to the recent work with the Exchange Club of Lawrence and the Andovers, F.H. Cann & Associates has been involved with a number of other organizations, including the Pulmonary Hypertension Association and Lazarus House Ministries.

About F.H. Cann & Associates

F.H. Cann & Associates, Inc. (FHC) was established in 1999 and has provided best-in-class accounts receivable management services and contact center solutions for over 20 years. More information can be found on their official website: https://www.fhcann.com

Let’s set the stage. A plaintiff, represented by a plaintiffs’ firm well-known in this industry, files a putative class action in the Eastern District of Wisconsin–a hot spot for FDCPA litigation–back in early 2019. For the next year and a half, extensive litigation occurs: lots of motions practice, attempts to get a class certified, and discovery disputes. In other words, a lot of money and attorney hours thrown into the ring by both sides. Then, all of a sudden, plaintiff fails to file a response to a motion for summary judgment. That’s what happened in Nagan v. Optio Solutions, LLC, and this caused the court to end the case in defendant’s favor.

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The underlying case

Putting procedural issues aside for a moment, let’s discuss the claims alleged in the complaint. Defendant sent a collection letter to plaintiff which listed a settlement offer that “expires in 45 days” and also provided an itemization of the debt. The itemization mirrored the information provided to defendant by the creditor: principal, fees, interest, and balance due.

Plaintiff filed a putative class action in Eastern District of Wisconsin alleging that the letter violated both the FDCPA and California’s Rosenthal Act (likely because plaintiff claims defendant has a principal place of business in California). Plaintiff claimed that the settlement offer was false and misleading because it causes a false sense of urgency for the consumer to pay the debt despite defendant having flexibility with the settlement offer (e.g., ability to extend the due date, ability to offer more of a discount later). Regarding the debt itemization, plaintiff claims that it gives a false impression that the balance would increase.

Procedural history

Since this case was filed in February 2019, there has been extensive litigation. This includes a motion to certify a class, several motions for summary judgment, modifications to scheduling orders, and discovery disputes. This culminated in telephone conference held on June 11 of this year, where plaintiff’s counsel discussed several open discovery issues that still needed to be remedied. During this conference, the judge provided 30 days to hold the depositions that plaintiff’s counsel said were needed, and then 30 days after the deposition is held for plaintiff to file its response to defendant’s motion for summary judgment. 

According to the court, plaintiff failed to do the latter.

The court’s decision

Procedurally, since plaintiff did not file a response to defendant’s motion, the court was to consider the statement of facts provided by defendant to be true. Based on this, the court found that summary judgment was appropriate for defendant.

Right off the bat, the court rejected the California Rosenthal Act claim since there was no evidence presented that plaintiff was ever a resident of California.

Regarding the settlement offer, the court found that the letter did not contain the Evory safe harbor language (“we are not obligated to renew this offer”), but that’s okay. This is because: 

[The letter] did not represent that no future settlement offers would be available or that it was Plaintiff’s only opportunity to settle the debt. Instead, the letter represented an amount that Defendant was willing to settle Plaintiff’s account for at that time and included an invitation to Plaintiff to discuss the debt. 

The court also found no issue with the debt itemization for two reasons. First, the debt itemization in the letter appeared exactly how defendant received it from the creditor. Second, the letter on its face provides no indication that the amount due is different than the balance listed. 

Although Plaintiff argues that the phrase “balance due” falsely implies that the debt is or could be increasing, stating the balance due without implying that it is different than the stated amount does not constitute a violation of § 1692e.

For these reasons, the court granted summary judgment for defendant.

Want short and sweet summaries of all industry-related court decisions?
The iA Case Law Tracker helps you do that in less time than it takes to pour your morning cup of coffee.

STERLING, Ill. — VeriFacts is a team with a big heart, and this month, we’re helping one of our own and participating in the Natalie Strong Virtual 5k to raise money that will help to give a young teen the gift of life through a second heart transplant. 

The VeriFacts team is ready to lace up our running shoes for the Natalie Strong Virtual 5K on Sunday, September 13, 2020. This event will raise money for Natalie Buck, an immediate family member of VeriFacts’ own Anjie Persico. Natalie is 13 years old, on the list for her second heart transplant, and fighting hard; but she and her family need support. For the past 4 months, Natalie has been in the care of a hospital in Chicago and we know that she has a very long road ahead of her. Heart transplants can be a massive financial burden with costs that can include family relocation to be near the hospital or transplant center, long-term medications and therapies, follow-up medical care, and more.

“There’s no greater gift than the gift of life.” –organdonor.gov

That’s why the VeriFacts team is participating in this life-changing virtual 5k which will provide financial assistance and access to the critical care and treatment that Natalie needs throughout her lifetime. While the VeriFacts team will run together, this virtual 5k is open to anyone who would like to join us in our efforts to give the gift of life to Natalie.

 Interested participants, families, or groups must register before September 4 by visiting the official race page. Each race registration costs $25 and all proceeds will go directly to COTA (Children’s Organ Transplant Association) in honor of Natalie and help with a lifetime of transplant-related expenses. Participants can walk, run, hike, bike, or swim to complete the race in their choice of location: home, pool, trail, or street. The virtual 5k begins on Friday, September 11, and ends on Sunday, September 13.

We would love for others to join our VeriFacts team by walking, running, jogging, biking, or swimming in their own neighborhoods across the country. In fact, VeriFacts’ CEO Stephanie Clark and Finance & Compliance Specialist Anjie Persico have committed to doing 10 pushups for every person who registers for the Natalie Strong Virtual 5k! You read that correctly, 10 pushups for each participant; so 25 participants = 250 pushups!

Even if you can’t participate in the race, please consider supporting Natalie and her dreams of a chance to live. For more information, to register, or to give now, please visit the COTA for Natalie’s Journey website. Let’s show our support for Anjie and help Natalie’s family get closer to their $25,000 goal. Together, we can help our own and get Natalie one step closer to the life-saving second heart transplant that she needs. 

Want to learn more about becoming an organ donor? Visit organdonor.gov.

About Children’s Organ Transplant Association

The Children’s Organ Transplant Association (COTA) helps children and young adults in need of a life-saving transplant by providing fundraising assistance and family support. COTA’s services are completely free of charge and 100% of funds raised can be used throughout a patient’s lifetime for almost any transplant-related expense. 

About VeriFacts, LLC

A leading service provider to the receivables management industry for over 25 years, VeriFacts, LLC is committed to offering guaranteed customer location and employment verification services to creditors across the nation. The VeriFacts brand has become synonymous with high-quality service and a positive customer experience.

ATLANTA, Ga. — For the fifth straight year, the FFAM360 Alliance Of Companies is hosting a back to school supply drive for local school-aged children to ensure that kids have the supplies they need as they return to the classroom. 

“As a result of the coronavirus pandemic, the needs in our communities are greater than ever. This year, the FFAM360 Alliance of Companies workplace philosophy is ‘Clearly Go Above and Beyond.’ Charitable giving and volunteerism are one of the cornerstones of our company culture; our employees and leadership are committed to helping the children in our communities start the school year ready to learn,” says Matthew Maloney, President and Chief Investment Officer of the FFAM360 Alliance of Companies. “In 2019, 15 million children, or 21% of all children, in the United States were living in poverty. We recognize the widening financial and educational achievement gaps caused by the ripple effects of the pandemic. Many families can’t afford the rising cost of school supplies and this disadvantage can cause social, emotional, and academic challenges. We don’t want families to choose between paying rent and giving their children a shining start to the new year.” 

According to a recent survey by the National Retail Federation, COVID-19 is predicted to push back-to-school shopping to a new record. Parents of K-12 school-aged children spent an average of $696.70 per family last school year. This year, those families are planning to spend approximately $786.49. For only traditional pencil and paper supplies, the cost is expected to average $131.37, up from $117.49 last year. This staggering increase comes as a shock for many families who are struggling financially, battling food insecurity, and trying to figure out how to meet the demand for school supplies that they can’t afford. 

“Many parents and guardians are overwhelmed with trying to provide basic necessities, let alone budgeting for school supplies,” continues Mr. Maloney. “Families are facing increasingly hard times but still fighting to give their children the tools they need to succeed. Whether families are preparing for at-home learning or the return to brick-and-mortar classrooms, it’s more important than ever for us to help make sure that students are prepared to begin the new year. This year, our teams are personifying our motto to ‘Clearly Go Above and Beyond’ by donating backpacks filled with assorted school supplies, along with other necessities. Preparedness is a key factor in success and we want children to feel prepared and confident from the very first day. We hope that others will follow our lead and get involved. Today’s children are our next generation and the positive effect of what we do today will be felt for decades.” 

To learn more about how we are active in our communities and embodying our commitment to intentional living and our motto, Clearly Go Above and Beyond, please visit the FFAM360 News page. 

About FFAM360

The FFAM360 Alliance 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 RCM, Financial Services, and Human Resource Staffing 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. They are headquartered just outside Atlanta, GA, with additional offices in Phoenix, AZ and Paso Robles, CA.

California shows that a pandemic won’t slow its government down. In addition to California’s Attorney General finalizing CCPA regulations roughly two weeks ago, California’s legislature has now passed a new piece of legislation, the Debt Collection Licensing Act (SB 908). The Act is now awaiting the governor’s review. If he chooses to, Governor Gavin Newsom has until the end of September to veto the bill. If passed, the requirements would go into effect on January 1, 2022.

Licensing

As its name suggests, the Act calls for the licensure, regulation, and oversight of debt collectors by the Commissioner of Business Oversight from the Department of Business Oversight (DBO). It would require debt collectors located in California and those who collect debts from California residents, regardless of office location, to obtain a license. It would also require such businesses to comply with regulatory oversight, including examination and reporting, of DBO.

According to the Legislative Council’s Digest:

This bill would require each licensee to, among other things, file reports with the commissioner under oath, maintain a surety bond, and pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of these provisions, as estimated by the commissioner. The bill would authorize the commissioner to enforce these provisions by, among other things, adopting regulations, performing investigations, suspending a license, issuing orders and claims for relief, and enforcing the provisions, as specified.

Actions Forbidden by the Act

The Act prohibits certain acts and practices. Some of these are nothing new to debt collectors, such as not using profane language, annoying consumers by causing their phones to ring repeatedly, or communicating so frequently with consumers to the point where it constitutes harassment.

A new addition to the prohibitions includes sending communications–either written or digital–without displaying the California license number in at least 12-point type.

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Advisory Committee

The good news for debt collectors is that the Act requires DBO to create a Debt Collection Advisory Committee to advise the Commissioner on matters related to debt collection. The committee would consist of 7 members, one of which must be a consumer advocate. Committee members shall be appointed by the Commissioner and shall serve 2-year terms.

Potential Rulemaking

The Act also gives authority to the Commissioner to adopt regulations necessary for the DBO to be prepared to perform its regulatory duties by January 1, 2022. This means that we very well may see proposed rulemaking within the next year.