Archives for December 2020

Part 2 is here and, at long last, we now have the complete final debt collection rule — Regulation F — from the Consumer Financial Protection Bureau (CFPB or Bureau). This part of the rule relates to validation notices, time-barred debt, and passive debt collection. How did the final rule come down on these topics? Continue reading to find out.

Validation Notice — Basically What Was Proposed

If you were hoping for some wild modification of the model validation notice presented in the proposed rule, you’ll be disappointed. The Bureau’s final rule on the validation notice is largely the same as the proposal — tear-off and all. If a debt collector wants to take advantage of the safe harbor, they have to largely have their collection notice mirror the model notice. If a state requires its disclosures to be on the front page of a collection letter, then that is allowed. Otherwise, state disclosures are allowed on the reverse side of the letter.

Time-Barred Debts — Large Departure from Proposal

This section is where the Bureau took the biggest departure from the proposal. Specifically, the Bureau decided not to mandate a time-barred debt disclosure, which means that it’s business as usual in this respect. The Bureau, however, did go forward with its prohibition of suing on a time-barred debt.

Debt Parking/Delayed Credit Reporting

The Bureau finalized its proposal against debt parking, or the process of credit reporting the debt prior to communicating with the consumer. The final rule requires that debt collectors send a communication about the debt to the consumer. If that communication is in writing, the debt collector must wait a reasonable time — to ensure there are no deliverability issues — before they are allowed to credit report the account. The Bureau defined “reasonable time” as 14 days when it comes to traditional mail. Unfortunately, it seems that the Bureau also applied a 14-day “reasonable time” to electronic communications, which is odd considering that notifications that a system could not deliver an electronic message are almost instantaneous. On the bright side, the Bureau is open to receiving data as the rule gets implemented and potentially revisiting some of these items.

Effective Date — Aligned for Parts 1 and 2

The full final rule will have one effective date: November 30, 2021.

You can download Part 2 here: Debt Collection Practices (Regulation F) Part II

Part 2 is here and, at long last, we now have the complete final debt collection rule — Regulation F — from the Consumer Financial Protection Bureau (CFPB or Bureau). This part of the rule relates to validation notices, time-barred debt, and passive debt collection. How did the final rule come down on these topics? Continue reading to find out.

Validation Notice — Basically What Was Proposed

If you were hoping for some wild modification of the model validation notice presented in the proposed rule, you’ll be disappointed. The Bureau’s final rule on the validation notice is largely the same as the proposal — tear-off and all. If a debt collector wants to take advantage of the safe harbor, they have to largely have their collection notice mirror the model notice. If a state requires its disclosures to be on the front page of a collection letter, then that is allowed. Otherwise, state disclosures are allowed on the reverse side of the letter.

Time-Barred Debts — Large Departure from Proposal

This section is where the Bureau took the biggest departure from the proposal. Specifically, the Bureau decided not to mandate a time-barred debt disclosure, which means that it’s business as usual in this respect. The Bureau, however, did go forward with its prohibition of suing on a time-barred debt.

Debt Parking/Delayed Credit Reporting

The Bureau finalized its proposal against debt parking, or the process of credit reporting the debt prior to communicating with the consumer. The final rule requires that debt collectors send a communication about the debt to the consumer. If that communication is in writing, the debt collector must wait a reasonable time — to ensure there are no deliverability issues — before they are allowed to credit report the account. The Bureau defined “reasonable time” as 14 days when it comes to traditional mail. Unfortunately, it seems that the Bureau also applied a 14-day “reasonable time” to electronic communications, which is odd considering that notifications that a system could not deliver an electronic message are almost instantaneous. On the bright side, the Bureau is open to receiving data as the rule gets implemented and potentially revisiting some of these items.

Effective Date — Aligned for Parts 1 and 2

The full final rule will have one effective date: November 30, 2021.

You can download Part 2 here: Debt Collection Practices (Regulation F) Part II

PITTSBURGH, Pa. — Credit Management Company announced today that following a long and incredibly successful 40-year career, Mary Lou Muti is retiring, effective March 31st, 2021. 

 “Mary Lou has held several integral roles throughout her illustrious career with Credit Management Company. The culture and commitment to exceptional customer service that exist at Credit ‘Management Company can be attributed to Mary Lou’s vision and leadership.  We are grateful to her for her guidance, support, and positive demeanor. She will certainly be missed,” said Joel McKiernan, Executive Vice President of Sales. 

Muti, who started with Credit Management Company in 1981 as an administrative assistant, has been president for 10 years. Prior to her current role, she held the titles of Office Manager, Controller, Vice President of Finance, and finally Executive Vice President, before becoming president in 2010. Under her leadership, the company saw expansion into new geographic regions, long-lasting client partnerships, and multiple financial successes, including a record-setting year in 2020.  

Credit Management Company is proud to announce the promotion of Joel McKiernan to President, effective January 1st, 2021. Joel will be the third president in CMC’s 54-year history. 

Joel began his career at CMC in 2013 and brought with him over 22 years of experience in the healthcare revenue cycle industry. He has played a critical role in managing and directing our sales force and with new market and product development.

Joel has thrived as VP of Sales and has maintained a close rapport with clients over the past 7.5 years. Joel’s ability to nurture current client relationships while fostering and cultivating new ones has helped earn Joel his new position.

About Credit Management Company (CMC)

CMC has been providing full-service accounts receivable and collection management programs across several industry segments since 1966. Headquartered in Pittsburgh, Pennsylvania, CMC’s clients reside in the healthcare, government, education, and consumer industry sectors. CMC’s customized outsourcing processes deliver solutions that will accelerate cash flow, lower operating expenses, reduce customer delinquency, and improve customer care and support. All of CMC’s vast client network has benefited from either CMC’s standard or customized outsourcing programs to improve their bottom line.

CMC is proud of the partnerships they have cultivated over the years. Each business relationship is approached in a collaborative style, and always involves listening and responding to client’s needs.

The end of the year is my favorite — it’s the perfect time to review what’s happened in the courts over the past twelve months. While 2020 might have been a wild ride in many other areas, it’s been a good year for case law favoring the debt collection industry.

Since January 1, 2020, we’ve added a whopping 634 cases into the CLT. Of those cases, a majority came down positive for the debt collection industry! Below is the breakdown of the overall dispositions:

• Positive: 361 (57%)
• Mixed: 84 (13%)
• Negative: 179 (28%)
• Neutral: 10 (2%)

There were many substantive issues that dominated the court dockets this year, including:

• Credit reporting dispute procedures (41 cases: 25 positive, 12 negative, and 4 somewhere in between)
• Letter formatting/overshadowing (27 cases: 17 positive, 3 negative, and 7 somewhere in between)
• Time-barred debt (25 cases: 13 positive, 8 negative, 4 somewhere in between)
• Creditor ID (25 cases: 14 positive, 6 negative, 2 somewhere in between)

There’s one issue that gets a shout-out for starting to cause a scene on the dockets, and that’s payment processing fees—sometimes called “pay to pay” fees. We began to see more court decisions on this issue, and the results are all over the place. Of the 9 court decisions in the CLT, 5 are positive, 3 are negative, and 1 is mixed. 

The entire insideARM team is going to be out on vacation for two weeks starting next week, so we’ll see you all on the flip side in 2021 (except for a brief interlude when Part 2 of the CFPB’s final rule is released).

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On Dec. 10, the California Office of the Attorney General issued its Fourth Set of Proposed Modifications to the California Consumer Privacy Act regulations.  The changes affect only two subsections relating to the sale of personal information.

Section 999.306(b)(3) would clarify that a business that operates offline and sells consumers’ personal information must provide a notice of opt-out.  This is a sensible proposal since the current rule applies the requirement to businesses that “collect” rather than “sell” personal information. 

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Section 999.306(f) would reinstitute guidance on the use of a uniform opt-out button consumers may use to opt-out of the sale of their personal information.  Similar guidance was contained in the first set of proposed modifications but was omitted in second and third sets and in the final rule. 

The deadline for written comments on the proposed modifications is Dec. 28, 2020

Now in its fourteenth year, insideARM.com’s Best Places to Work in Collections program recognizes the most positive workplace environments in our industry.  I will be so bold as to say that every collection agency, law firm, or debt buyer with 15 or more employees must absolutely participate — and not just because participation is free.

(2020 was an interesting year, with a pandemic and sudden work-from-home provisions. Those who participated in this year’s Best Places to Work survey should find the 2021 results very illuminating when compared to what 2020 told you.)

We host this annual survey because we believe that it’s good for the industry, and it offers participating companies essential data, gathered confidentially, about what their employees really think. You simply can’t get this information any other way.

One of the biggest barriers to profitability in this industry is employee turnover. If your staff is unhappy, do you think they are as productive as they could be, or that they are representing you and your clients as they should be? Of course not. But where to begin to address employee satisfaction? Your Best Places to Work in Collections results provide you with a roadmap. Please, take advantage of this great opportunity.  

Register your company now.

Compete against companies of your own size.  No need to feel that you can’t measure up against the benefits and resources of a large company, or the family feeling of a small company.  Rankings are determined within three size categories, are: small (15-49 employees), medium (50-149 employees) and large (150+ employees).

Winners have enjoyed great benefits including enhanced reputation with creditors, morale boost, and recruiting support.

It works like this:

1. Employers complete a questionnaire on workplace policies, practices, philosophy, systems, benefits, and demographics. It can take about 4-8 hours to gather all of the info for this questionnaire – but hey, if it was totally simple, it wouldn’t produce meaningful results – and if you register now, you’ll have several months to pull it together. (You don’t have to do this part until February. Right now, all you have to do is register your company, which takes about 60 seconds.)
2. Employees are asked an in-depth set of questions — you choose online or via paper format; either way it takes the typical employee about 10-15 minutes to complete.

That’s it. Within about 6-8 weeks of completion, our partner, Best Companies Group, will produce a list of winners and we start to make announcements.

The process is confidential.  insideARM does not have access to any employee responses. Best Companies Group, which collects all data, evaluates, and selects winners, has no connection to the debt collection industry.  If your staff is — ahem — less than kind, nobody will know but you.  But YOU should know!

Participating companies will receive a free Employer Benchmark Summary which reveals averages on standard employee benefits and best practices reported by those that made the list and those that did not. This is a great tool to help benchmark some of the most common benefits offered compared to those of your organization.

Participants will have the opportunity to purchase the full Employee Feedback Report that provides valuable data including a spreadsheet summarizing employee feedback and written employee comments, as well as a 30-minute consultation call with a Best Companies Group survey specialist.

These reports offer incredibly valuable information at an unbelievably fair price, regardless of whether you are selected as a winner.  The value in having a 3rd party conduct this survey is that you get candid information from your employees; your HR department could never gather this type of information.  And if you chose to do it independently, you’d pay $5,000-10,000.

Simply participating will show your employees that you care, which is critical to retention.  Winning gives you bragging rights and an invaluable recruiting tool.

Learn more about the program, or register here.

CHAMPLIN, Minn — Once again, Summit A•R is helping to keep the Holidays bright for local families in need.  Located in Champlin, MN, Summit A•R is a well-established Minnesota based full service Revenue Cycle Management Company that has been in business since 1996.

In keeping with their ongoing commitment to the community, the staff and management “adopted” 3 families this season.  Connections were made with Cross of Christ and Glen Cary churches and the churches hand selected 3 families with children for the adoption.  Gifts were purchased, wrapped, and given to the two local churches who sponsored the adoptions.  Every effort was made to ensure that these families had a bountiful Christmas.  One extra generous donor even bought a bicycle for one of the children in need. 

“Every year I can count on our staff to come up with ideas to serve the community but, given the current pandemic, this year created special challenges and extra need” said Tim Turner, President of Summit A•R.  “They answered the call in a big way… the generosity of our employees and their families always touches me deeply”.   Sandy with Glen Cary, one of the churches donated to, had this to say; “When we presented the gifts to the families, they were astonished, and tears were shed.  These families could not be more grateful, and neither could we!  Summit really came through for us.”

About Summit A•R

Founded in 1996, Summit A•R (Summit Account Resolution) is a national collection agency serving health care, commercial, consumer and many other industry segments. Their focus is to “Preserve Human Dignity” with their P.H.D. collection philosophy. They are members of the ACA, IACC, AAHAM and BBB among other local and national organizations.  888.222.0793 or SummitCollects.com

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. 

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TCPAWorld remains a dangerous place for folks trying to communicate with their customers using text messages. This is true even in an era when P2P texting is finding increasing favor as a preferred contact channel. In Greiner v. Cadillac Accounts Receivable Mgmt., Case No. 2:19-cv-12479, 2020 U.S. Dist. LEXIS 234221 (E.D. Mich.  November 9, 2020) for instance a Defendant was just denied summary judgment—i.e. the case is headed to a jury—in a case where the Defendant debt collector claimed it sent the texts at issue manually.

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Defendant submitted three declarations from witnesses purporting that the texts at issue—debt collection messages—were sent manually. However, the declarations did not explain what “manual” meant and, apparently, just declared in a conclusory manner that the messages went manually. The Court reasoned that the assertion of manual texting in this context was merely a legal conclusion and rejected the evidence outright. Without the evidence, the motion for summary judgment falls flat.

It is unclear whether Defendant would have won the case had it introduced proper evidence, but the answer is probably yes.

Adding salt to the wound here, this case started off as a small claims matter. Defendant removed it to federal court and spent time and money to bring a summary judgment motion.

And lost.

To a pro per.

Editor’s Note: A pro per or pro se plaintiff is one that is not represented by counsel.

Greiner has a couple of takeaways:

One, defense lawyers need to submit proper evidence. And its quality, not quantity. These folks submitted three declarations, but none of them addressed the heart of the issue—what does “manual” mean? A single, properly worded and supported declaration could have probably won the case.

Two, the risk remains high in cases involving text messages. Even though the messages were sent “manually” and were plainly targeted to collect a debt—i.e. likely tailored to specific consumers and not mass blasted—the court still sent the issue to a jury to decide. The risk is real, folks. Be cautious and seek consent.

Rockville, Md. — This year’s Women in Consumer & Commercial Finance conference — our third — continued building on the successes from previous years, this time in an entirely virtual environment.

Global pandemic notwithstanding, this year’s event hosted more than 600 women from across the financial services industry, and from a variety of roles, all with the goal of empowerment, networking, community, and deep conversation.

“I can’t emphasize how much of a labor of love this conference is, and how meaningful it is to me,” said Amy Perkins, president of insideARM and WCCF Chair. “I owe everyone — from the insideARM staff, to our steering committee, to the women who brought so much light and insight, to the sponsors who saw value in our endeavor — so much praise and gratitude. We were worried at first that we wouldn’t be able to capture the magic of that first year. It turns out, I didn’t need to worry.”

Playback for the sessions at this year’s WCCF conference can be found here.

“It was absolutely a labor of love,” said Stephanie Eidelman, CEO of insideARM and WCCF Chair. “One of our missions at insideARM is to provide everyone we interact with one of the best professional experiences of their lives. And the overwhelmingly positive feedback we’ve received shows us that we hit that out of the park.”

Next year’s WCCF conference will be both a live and virtual event, from December 6-8, 2021, in Scottsdale, Arizona, and at your desk! Get on our mailing list for updates about speakers, panels, and other WCCF info.

Our sponsors were integral to the success of the conference.

Keynote/Conference Partner Sponsor

NeuAnalytics

Lead Community Impact Sponsors

ERC

NCB Management Services Incorporated

Inclusivity / Conference Partner Sponsor

Phillips & Cohen Associates, Ltd.

Conference Partner Sponsor

Crown Asset Management, LLC

interactions

Katabat

Spring Oaks Capital LLC

TransUnion

Building Connections Sponsor

DCM Services

Workshop Sponsors

Connect1

FocusOne

Katabat

Moss & Barnett

Ontario Systems

RedKnot Third-Party Risk Solutions

SAM: Solutions for Account Management

Communications / Tech Sponsor

Solutions by Text

Brand Builder Sponsor

Attunely

Bridgeforce

DebtNext Software

Enformion

Financial Recovery Services

McCarthy, Burgess & Wolff

Provana

New York, N.Y. — RIP Medical Debt gratefully announces a $50 million gift from philanthropist Mackenize Scott, the largest in the organization’s history.

“Our deepest gratitude to Ms. Scott for her compassionate and most generous gift. This is a gamechanger for RIP Medical Debt, allowing us to move towards our goals in a greatly accelerated way,” said Allison Sesso, RIP Medical Debt’s executive director. “We will immediately put this generous donation to work against our vision that includes the strategic engagement of communities across the country, to achieve health equity for all.”

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Since its founding in 2014, RIP Medical Debt has abolished more than $3 billion of medical debt for over 2 million Americans. On average, one dollar donated to RIP relieves $100 of medical debt for those who are two times the federal poverty level or below, whose total medical debt equals 5% or more of their gross annual income or are insolvent.

Medical debt is an American crisis. Forty-one percent of working age Americans are paying off medical debts or struggling to do so. An additional 7 million elderly adults struggle to pay medical bills. Two-thirds of personal bankruptcies cite medical debt as a key factor. The pandemic has worsened this problem: between February and May of this year 5.4 million Americans lost their health coverage – more people than have ever lost coverage in a year.

Ms. Scott shared her reason for the donations on Medium, saying, “Witnessing the determination, creativity, and compassion of people in a crisis has been inspiring… [like] two former debt collections executives enabling donors to anonymously forgive $1,000 in crushing medical debt for struggling families with every gift of $10.”

Medical debt is recognized as a major social determinant of health and disproportionately disenfranchises communities of color by lowering credit scores, blocking access to new lines of credit and decreasing the likelihood that one seeks future medical care. By working directly with community foundations, patient advocates and local stakeholders, RIP plans to continue pioneering its model of community action to acquire and eradicate debts directly from hospital organizations beginning in 2021.

About RIP Medical Debt

Since being founded in 2014 by two former debt collectors, RIP Medical Debt has acquired, and abolished, more than $3 billion of oppressive medical debt, helping over 2 million individuals get out from under the burden of crushing medical debt. RIP works with individuals, faith-based organizations, foundations and corporations. On average, one dollar donated to RIP forgives $100 of medical debt, empowering every donor to have an outsized impact. RIP rose to national prominence on an episode of HBO’s “Last Week Tonight” with John Oliver in which RIP facilitated the abolishment of $15M in medical debt. To learn more, visit https://ripmedicaldebt.org/