Archives for February 2021

So I was reading the decision in Gulden v. Liberty Home Guard Llc, No. CV-20-02465-PHX-JZB, 2021 U.S. Dist. LEXIS 33833 (D. Az.  Feb. 23, 2021) this morning and I just couldn’t get over how bad the Defendant’s argument was. Until it hit me—this may actually be pretty clever.

In Gulden the Defendant moved to dismiss a TCPA case alleging that it violated the statute by sending unwanted text messages. The thrust of the argument was that text messages are not calls subject to the TCPA.

Now as any reader of TCPAWorld knows, there are a huge number of cases—including binding Ninth Circuit precedent—to the effect that text messages are calls under the TCPA. The FCC has so held as well. So a Defendant arguing otherwise to a court within the Ninth Circuit feels really close to frivolous (i.e. sanctionable.) Especially since the Defendant’s argument was essentially “come on, Judge.”

No really, this was Defendant’s argument according to the decision:

Defendant fails to cite any law in support of its position that a text message is not a “call” for purposes of the TCPA. Instead, Defendant merely argues “reasonable people would be led to believe that the word call means a telephone call, not a text message.

Any litigator reading this is going to cringe because legal argument doesn’t come down to “what reasonable people believe”—that would make the law logical and useful—no, it comes down to what legislators, agencies and judges have said about it in the past. That’s called precedent. And Defendant had none of it. So Defendant was 100% certain to lose the argument, and it basically forced the court to waste its time responding to it.

But just as I opened the blog to cream Defendant for its ridiculous argument—yes, folks, text messages are calls subject to the TCPA and it is really not even debatable—it dawned on me: things might be about to change.

Remember that oral argument in Facebook I live blogged that everyone in the world read? Well one of the benefits of my live blog and analysis that you won’t find anywhere else is that I caught an interesting little nuance.

About six minutes into the argument Justice Thomas asked Facebook’s counsel, the Paul Clement, whether texts were calls to begin with under the TCPA. Although the exchange was short lived, Clement very clearly advised the Court that it could avoid the whole sticky ATDS issue by simply finding that texts were not subject to the TCPA to begin with (an issue, BTW that was never even raised in Facebook’s brief because… its not even debatable.)

So it is possible—not likely or probable—but possible that the Supreme Court resolves Facebook by deciding that text messages are not calls to begin with. And that would make the Defendant’s argument in Gulden just crazy enough to work.

So maybe TCPA defendants shouldn’t give up on the argument altogether just yet.

That said, this is a real long shot. Again, every case to address the issue has determined text messages are calls. The FCC has so said. And the Supreme Court did not ask for further briefing on the subject, which consumed all of 14 seconds of discussion during oral argument.

Still though, I’m telling you there’s a chance.

The CFPB’s final rules on debt collection issued in October and December 2020 have left creditors and servicers wondering what to do with them. These rules were the result of a 7-year long process and represent the first major rulemaking under the Fair Debt Collection Practices Act (FDCPA) since the law’s inception over 40 years ago. Even with the rules finalized, as described in greater detail below, incoming CFPB leadership has questioned whether the final rules need to be further refined.

By definition, creditors and first-party servicers are excluded from coverage because they are not “debt collectors” under the FDCPA. But even then, creditors and servicers comply with many FDCPA requirements in large part due to longstanding CFPB guidance stating that entities that are not debt collectors could still violate consumer protection laws by engaging in conduct prohibited by the FDCPA. The CFPB’s powers to enforce such violations would not come through the FDCPA itself, but through the CFPB’s broad powers to prohibit unfair, deceptive, or abusive acts or practices (UDAAPs).

One of the notable requirements under the final rules effectively proposes 2 distinct limits on how often debt collectors can call consumers. Subject to limited exceptions, the final rules create a presumption that a debt collector violates the FDCPA if it (a) calls a person more than 7 times within 7 consecutive days; or (b) calls a person within 7 days of having a phone conversation with that person. These limits apply at the per-debt level, with the exception of student loans which may be aggregated by account number.

In the 1000+ pages of the rules’ text, the CFPB expressly refused to apply the new rules to creditors and first-party servicers or take a position on whether any conduct under the rules could give rise to a UDAAP. However, much could change between now and the rules’ effective date of November 30, 2021. The CFPB Director who issued the final rules, Kathy Kraninger, stepped down from her post at the request of the Biden administration in January and is expected to be succeeded by FTC Commissioner Rohit Chopra.

On several occasions, FTC Commissioner Chopra has publicly expressed his views that the final rules don’t do enough to protect consumers from abusive debt collection practices. In particular, he has opined that the new phone call frequency limits “seem excessive” and has admonished the CFPB for failing to follow through with its plans to regulate first-party debt collection practices. Earlier this month, Acting CFPB Director Dave Uejio directed CFPB staff to explore options for preserving the status quo with respect to the debt collection rules, sending a strong signal that the final rules could be delayed until the CFPB implements more consumer-friendly requirements with FTC Commissioner Chopra at the helm.

With these developments, the risk is apparent that the CFPB under a new presidential administration will eventually apply at least some aspects of the final rules to creditors and first-party servicers. Prudent creditors and first-party servicers will need to assess the potential impact the final rules could have on their operations and whether, and the extent to which, they might proactively comply with some of the new requirements, at least as we understand them today.

At a time when applicable regulatory requirements appear uncertain and subject to swift amendment, more creditors and servicers are turning to Peach. Peach has developed a suite of services to help creditors and servicers achieve compliance with the complex web of requirements that apply to the servicing and collection of consumer purpose credit. For instance, Peach’s Compliance Guard – Rules module checks outbound servicing and collections-related communications against federal, state, and local laws that apply to creditors and servicers.

The Compliance Guard – Rules module automates compliance for requirements under the FDCPA (including unusual time and place restrictions and limitations on third-party contacts) and already incorporates existing call frequency limits in jurisdictions that require them, such as Massachusetts and New York City. As part of the onboarding process, Peach presents creditors and servicers with its catalog of pre-programmed business and legal rules, which in coordination with Peach, can be tailored to meet a company’s operational needs and risk tolerance. Once in action, Compliance Guard – Rules smartly selects applicable rules by loan type, licensure, servicer or creditor’s charter, and borrower’s state of residency. If the Compliance Guard – Rules module determines that a proposed communication would violate a legal or business requirement, it will recommend blocking the communication attempt. 

If you’d like to learn more about how Peach can help creditors and servicers automate compliance while providing a best-in-class servicing experience, email us at info@peachfinance.com.

WOODLAND HILLS, Calif. — The State of Utah, known as one of the fastest-growing technology centers in the country, selects CSS IMPACT Financial Cloud as its Enterprise Debt Collections Ecosystem Platform. CSS, Inc., the developer of “IMPACT | HD 2.0” is the leading provider of “NextGen” Cloud Financial & Debt Collections Ecosystem platforms with a focus on “Ai” (Artificial Intelligence) machine learning Digital Collections. The HD 2.0 | Ai system, a “Digital First” collections & debtor engagement platform, that allow agencies to deploy agent-less servicing functions to negotiate, settle, make payment arrangements, receive payments & answer common questions passively & positively without changing the debtor behavior by using common IoT channels of communications, such as Google Assistant, Google Ai Voice (phone), Text, Chat, Online portals, as well as legacy channels such as Dialers, Click-to-dial mobile contacts, Text Messaging, IVRs, & emails.

Technology leaders to the likes of the City of San Francisco, Los Angeles, San Diego, Santa Clara County “Silicon Valley” and now the State of Utah are leveraging CSS’s “Digital First” Enterprise Debt Collections Ecosystem Financial Cloud Platform to deliver centralized debt management automation with a frictionless “Digital Consumer Engagement” experience that efficiently streamlines the State’s workforce resources, enabling them to focus on new revenue management strategies, increase revenues as well as delivering an even greater customer service experience.

The State of Utah is one of the main hubs for tech companies as it is one of the most vibrant and fastest-growing tech centers in the United States, if not the world.  Also known as “Silicon Slopes” spanning from Salt Lake City to Provo (the primary location being in Lehi) is filled with top leading technology firms such as Adobe, Ancestry, Overstock.com among others just to name a few.

The State’s selection of CSS as its Enterprise Debt Collections financial ecosystem platform of choice aligns with the State’s vision of delivering the latest agile new digital technology to improve revenue management productivity, increase quality of service, and simplify the lives of Utah residents.

“It is an absolute honor and privilege to have been selected by the State of Utah for the implementation and adoption of CSS IMPACT’s “NextGen” Debt Collections financial ecosystem cloud platform. We look forward to a long-term relationship with the State of Utah, and we are extremely excited in rolling out the CSS IMPACT ecosystem platform.” said Carl Briganti, President of CSS, Inc. (Collection Solutions Software, Inc).

To learn more about how municipalities are leveraging CSS’s Cloud Financial Ecosystem, please visit https://www.cssimpact.com/collections or download our brochure at http://brochure.cssimpact.com

About the State of Utah

The State of Utah is known for having some of the best skiing in the country and it has been coined as “Silicon Slopes” as one of the most vibrant and fastest-growing tech centers in the nation. The state is the 13th-largest by area within the fifty U.S. states, with a population of over three million, it is the 30th-most-populous and 11th-least-densely populated. Urban development is mostly concentrated in two areas: the Wasatch Front in the north-central part of the state, which is home to roughly two-thirds of the population and includes the capital city, Salt Lake City; and Washington County in the south, with more than 170,000 residents.

The state has a highly diversified economy, with major sectors including transportation, education, information technology, and research, government services, mining; it is also a major tourist destination for outdoor recreation. In 2013, the U.S. Census Bureau estimated that Utah had the second-fastest-growing population of any state.

About Utah – Office of State Debt Collection (OSDC)

The Office of State Debt Collection (OSDC)’s mission is to maximize receipt of money to the State of Utah by effectively managing and collecting state receivables

About – Utah Department of Technology Services (DTS)

The state of Utah Department of Technology Services (DTS) provides innovative, secure, and cost-effective technology solutions that are convenient and empower the State’s partner agencies to better serve and simplify the lives of Utah residents.

For more information, please visit http://utah.gov

About CSS, Inc.

CSS is a leading provider of end-to-end cloud Financial Ecosystem platforms & Contact Center solutions with a focus on “Ai” (Artificial Intelligence) machine learning Digital Consumer Engagement for enterprises that generate & manage mass receivables, collections, payments, recoveries & revenues. By delivering cognitive cloud Financial Ecosystems technology, CSS helps municipalities and enterprises improve and automate all their daily financial processes, consumer engagement & business process. For more information, download our brochure at http://brochure.cssimpact.com or visit us http://www.cssimpact.com or call 877.277.4621.

The accounts receivable management (ARM) industry tends to move slower than most when it comes to adopting new technologies. In large part, this is due to the enormous regulation of the industry. But also, agencies must overcome the hurdle of convincing their third-party clients to adopt the same technology and to trust their agency to utilize it in a compliant and consumer-friendly way. The future of the ARM industry must include meeting customers where they want to be met, and that means adding more communications channels like email, interactive websites, and, yes, two-way texting.

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Some companies in the ARM industry have successfully integrated outbound SMS messaging into their collections strategies. These agencies are driving calls and website traffic via SMS. Opening this channel of communication for two-way conversations with customers is key to the success of the ARM industry in 2021 and beyond. According to The Local Project, 64% of consumers are likely to have a positive perception of businesses that offer communication via text message, and unsurprisingly, 44% of consumers would prefer to push a button and initiate a conversation rather than waiting on hold for an agent. As more industries evolve to integrate two-way texting into their available communications channels, more consumers will come to expect that type of service from the ARM industry.

How can the ARM industry open the text channel to customers?

Start recruiting and training a different type of agent

Agents will now be required to have a strong grasp of written communication, and they will have to avoid the temptation of using shorthand in their conversations with customers. They will also need the ability to carry on multiple conversations at once without getting the conversations crossed. Of course, conversations with customers will play out differently than they do today, with customers having more time to consider offers, and having the ability to respond at their leisure, instead of being pressed for immediate responses over the phone. Agents will need to be patient, and agencies will have to re-evaluate their payment offer hierarchies. This might also mean re-evaluating commission structures, too.

Be willing to set precedents

While the new CFPB rule provides some instruction around texting, opening this channel also opens up new risks that agencies (and their third-party clients) must be willing to absorb. Developing robust policies and procedures can help agencies protect themselves from some of that risk.

Truly integrate technology into your strategies

This integration means ensuring letters, phone calls, emails, interactive websites, and text messages are all working together. Allowing customers to access a two-way text conversation via a letter or email will be key to the successful implementation of this channel.

Two-way texting will be a “game-changer” in the ARM industry, and not just by providing a boost in income. As Millennials and other tech-savvy generations increasingly comprise the majority of consumers, texting and other channels that accommodate communication preferences will no longer be “nice to have,” they will be essential to survival.

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 (and lately, virtually) 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. 

2021 members include:

TALLAHASSEE, Fla. – Crown Asset Management, LLC (CAM) was recognized during Florida State University’s 4th Annual Seminole 100 Celebration on February 18^th during a virtual ceremony.

The 2021 Seminole 100, hosted by the Jim Moran Institute for Global Entrepreneurship, part of the FSU College of Business, recognized the 100 fastest-growing businesses owned or led by Florida State alumni.

Crown Asset Management was ranked 26th for the second year in a row, having also come in at number 26 in the 2020 Seminole 100. 

Founded by FSU Alumni Mr. Brian K. Williams in 2004, CAM is an Atlanta-based specialty finance company focused on the acquisition, management, and recovery of distressed retail assets. CAM has also recently been honored as a winner of InsideARM’s 2020 Best Places to Work in Collections.

Mr. Williams currently serves on the FSU College of Business Board of Governors as well as the Jim Moran Institute for Global Entrepreneurship Advisory Board. In the past, he served six years on the Seminole Boosters’ National Board of Directors. He was recently elected to the Receivables Management Association International (RMAI) Board of Directors and continues to serve the association as Co-Chair of the Georgia State Legislative Committee. Mr. Williams graduated from Florida State University in 1997 with his Bachelor of Science, Finance. During his years at FSU, he was also a member of the Lambda Chi Alpha Fraternity.

“We are excited to win this prestigious award from the Jim Moran Institute for Global Entrepreneurship and the FSU College of Business,” says CAM Owner Brian Williams. “I am so proud of all the work our team has done to allow Crown Asset Management to achieve such consistent and outstanding growth. We see this award as a reflection of the outstanding services we provide and further validation of our position as a leader within the Accounts Receivable Management (ARM) industry.”

“Entrepreneurship has the power to shape our communities and fuel our economy,” said Melissa Roberts, managing director of the Jim Moran Institute. “We are proud to recognize the 2021 Seminole 100 honorees and commend them for their determination to achieve growth, innovation, and prosperity. We look forward to seeing continued success from these elite FSU alumni.”

To qualify for the Seminole 100, a company must have operated for at least three years and generated revenue by Jan. 1, 2017. In addition, the business must have been owned or led by an FSU alumnus for three consecutive years prior to applying.

View the full list of Seminole 100 honorees at seminole100.fsu.edu.

About Crown Asset Management

Founded in 2004, Crown Asset Management, LLC, is a professional receivables management firm that outsources purchased accounts to a nationwide, proprietary network of collection agencies and law firms. Utilizing a cutting-edge predictive analytical model during pre-purchase portfolio due diligence, their team focuses on achieving appropriate financial returns for investors while ensuring the best possible experience for consumers. They are an RMAI Certified Receivables Business and are headquartered in Duluth, GA.

The American Association of Consumer Credit Professionals (AACCP) recently held a press briefing to announce its new formation as a trade association dedicated to advocating for “holistic consumer credit repair.”  Despite the word “repair” missing from the trade group’s name, the association is comprised of credit repair industry experts and advocates for the credit repair industry. 

Responding to a perceived gap between the significant credit problems facing consumers and limited efforts by regulators and lawmakers to help consumers overcome those problems, the AACCP aims to educate consumers about the responsible use of credit and their legal rights and responsibilities about how furnishers and consumer reporting agencies publish information about their creditworthiness.  The group prides itself on being the only consumer advocate in the credit reporting system.  The aim is to “support consumer access to credit through accurate, fair, and substantiated credit reports.”  A short video on the group’s website also promises to protect consumers against bullying by “shadowy debt collectors.” 

The AACCP wants stakeholders in the credit ecosystem to know that they do more than just fix tradelines on consumer reports.  The group’s inaugural announcement and website explain how modern credit repair organizations offer consumers more because they:

•  Know the industry and the laws designed to protect consumers;
•  Understand the circumstances of individual consumers to help them raise relevant questions with creditors and other furnishers of credit report information;
•  Operate with integrity and maintain a strong focus on compliance with applicable statutes;
•  Help consumers review, analyze and understand their credit reports in order to identify items that may need to be challenged and, if possible, changed;
•  Advocate on behalf of consumers to resolve potential issues on their credit report with creditors/furnishers and the Consumer Reporting Agencies (CRAs a/k/a credit bureaus); and
•  Educate consumers on their credit reports, how to build positive credit, and encourage them to use credit responsibly.

(See, https://aaccp.org/about/)

The group describes these services as a “holistic approach to credit repair advocacy.”  A stated focus of this advocacy is to bring racial equity and fairness to the credit system.  The group’s founders are familiar players in the credit repair space, Progrexion and Lexington Law.

The credit repair industry is regulated by state and federal law.  The Credit Repair Organizations Act (15 U.S.C.S. § 1679 et seq.) is the federal law governing all credit repair services.  Like many other consumer protection laws, the CROA prohibits false and misleading behavior, requires certain consumer disclosures, empowers consumers with certain legal rights, and establishes a private right of action for consumers against credit repair organizations that do not follow the law.  Many states have implemented similar laws proscribing certain harmful behavior and mandating consumer-friendly behavior.  Despite a 5-year statute of limitations on violations of the CROA, a quick search revealed only a small number of reported cases involving this statute.  The law has been on the books since September 1996.

The collection industry and the credit repair industry share many similarities.  They are both highly regulated by state and federal laws throughout the country.  Their reputations are shaped most often, not by the law-abiding actors who bring assistance and value to consumers, but instead by the few who disregard the rules and bring harm to consumers.  They each sit on the front lines of consumer interaction, listening to stories of hardship and helping consumers triumph over their credit challenges.  Both industries have also had their share of government and civil scrutiny, with the government going after the biggest players in the marketplace:

• FTC Files Lawsuit Against Credit Repair Organizations for Illegal Upfront Fees and Threatening Consumers with Legal Action

• Lexington Law Moves to Dismiss CFPB Suit, Says Not Liable for 3rd Party Acts, CFPB Unconstitutional

…and courts narrowing the application of the Fair Credit Report Act to disputes received “directly” from a consumer:

• 9th Cir. Holds No FCRA Violation by CRA When Dispute Did Not Come ‘Directly’ From Consumer.

But the relationship between the credit repair industry and the collection industry has not always been simpatico.  Debt collectors are the recipients of tens of millions of dispute letters from credit repair organizations annually; often perceived as frivolous and unsubstantiated.  Collectors themselves have taken action against credit repair organizations to stop this untoward behavior:

• Debt Collector Accuses Lexington Law of Destroying Evidence in Lawsuit on Credit Dispute Letters

• Judge Cancels $2.5M Jury Verdict Against Lexington Law, Instead Grants Judgment for the CRO

Yet, in the end, both industries pursue their stated purposes of helping consumers overcome financial challenges.  Will this new trade association change public perception?  Will lawmakers be persuaded to pass laws favorable to the credit repair industry?  Will regulators take a kinder, more gentle approach to regulating the credit repair industry?  The impact of this new association on the public, consumers, lawmakers and regulators remains to be seen.  There may be more in common between the collection industry and the credit repair industry than either is willing to admit. 

MUNCIE, Ind. – Ontario Systems, a leading provider of enterprise software that automates complex workflows, accelerates revenue recovery and simplifies the payment process for healthcare, accounts receivable management (ARM) and government clients, today announced its acquisition of Pairity, a cutting-edge provider of artificial intelligence (AI) and machine-learning capabilities that allow collection teams to maximize revenue recovery by uncovering new data insights at scale.

Pairity’s advanced AI technology extracts and surfaces actionable patterns, allowing collectors to continually adapt their contact strategies. With this integrated functionality, Ontario Systems’ collection platforms will help clients significantly enhance productivity and collection results.

“Pairity shares Ontario’s commitment to creating intelligent workflow solutions that streamline the collections process and accelerate payments,” said Ontario Systems CEO Tim O’Brien. “Pairity’s technology strengthens our ability to drive value for our clients and provides another foundation from which we can continue to innovate.”

Recognized as the most innovative product at the 2019 CollectTech conference, Pairity allows users to continuously identify accounts with the highest probability of successful collection. Collectors in turn require fewer phone calls to realize value, increasing efficiency and revenue.

“We greatly look forward to joining Ontario,” said Greg Allen, CEO of Pairity. “Their proven track record of success in delivering enterprise workflow, collection, and payment solutions is the perfect platform on which to expand the reach of Pairity’s innovative approach to collections.”

This acquisition follows Ontario Systems’ acquisition of SwervePay in May 2020 as part of Ontario Systems’ growth and SaaS-transformation strategies designed to deliver faster innovation and increasing business value to thousands of clients nationwide.

About Ontario Systems

Ontario Systems is a premier provider of enterprise technologies that streamline and accelerate revenue recovery for clients in the healthcare, government, and accounts receivable management (ARM) markets. Through process automation and modern communication and payment tools, Ontario Systems helps its clients generate more revenue at reduced cost and engage patients, constituents, and consumers compliantly and effectively. With offices in Indiana, Massachusetts, New Mexico, and Washington state and employees across the country, Ontario Systems helps 600+ hospital networks—including 5 of the 15 largest systems in the U.S.—optimize cash collections and provide a seamless patient financial experience. Ontario Systems also serves 8 of the 10 largest ARM companies in addition to state and municipal governments nationwide.

About Pairity

Founded on the belief that advanced technology could more effectively address consumer debt for all stakeholders, Pairity offers leading artificial intelligence and machine-learning solutions that assist 40+ companies to manage over $40B of debt more effectively. Pairity’s solutions shed light into their over 10 million unique consumers by learning, organizing, and scoring behavior that drives workflow strategy more efficiently. Pairity reduces friction in the collections process by harnessing their intelligence to boost productivity and revenue-generating activities.
To learn more about Ontario Systems, visit www.ontariosystems.com

ROCKVILLE, Md. – Greenberg Advisors (GA), an M&A specialist in Accounts Receivable Management (ARM) industry transactions, announces the release of its year-end 2020 M&A Update (Read it here). This report includes data and analysis of trends that GA has observed in the market, based on its completion of many transactions in 2020 and its decades of experience in advising in such transactions.

Selected takeaways from the annual 2020 M&A Update for ARM:

• 62% of sellers were founders
• $670 million in transaction value traded hands
• Many deals for $50+ million were completed although there was less activity overall
• New buyer trends emerged
• Private equity firms with ARM experience re-entered the industry with platform acquisitions
• Updated valuation guidance

Brian Greenberg noted, “With so many challenges this past year, we’re glad that many firms have rebounded, or begun to rebound, and that some have even come out stronger by improving their operations. As we look ahead, strong valuations, pent-up demand, and readily available capital should all contribute to a very active 2021.”

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GA is proud to have helped many clients achieve their M&A goals in 2020, having advised in the sales of Arcadia Recovery Bureau and Praxis Healthcare Solutions to strategic buyers and the acquisition of Hunter Warfield’s Commercial Collection division.

Contact Brian Greenberg or any member of the GA team to discuss your interests in confidence.

About Greenberg Advisors

Greenberg Advisors, LLC is an independent investment bank providing world-class M&A and strategic advisory solutions to Business Services and Technology companies in the Accounts Receivable Management (ARM), Revenue Cycle Management (RCM), Healthcare Information Technology (HCIT), and Business Process Outsourcing (BPO) sectors.

Focused on these sectors for nearly 25 years, the firm’s professionals offer a comprehensive, yet highly specialized perspective from which to advise clients, which has resulted in the completion of over 135 M&A, capital raising, valuation, and strategic advisory engagements. These client successes reflect Greenberg’s distinct client-first approach, deep sector expertise, objective point of view, and work ethic.

On 15 February, Washington State finalized its permanent work from home rules for the collection industry. They are effective immediately, and require collection agencies licensed in Washington to take certain actions.

You can read the Washington Work From Home rule here: AMENDATORY SECTION (Amending WSR 01-11-132, filed 5/22/01, effective 6/22/01)

There are several areas that collection agencies licensed in Washington State should focus on listen below. Following the list, I’ll share some additional information shared with insideARM by Kevin Underwood, an attorney at Linebarger Goggan Blair & Sampson, LLP; as well as a member of Rulemaking Committee created under the Washington State Collection Agency Board.

1) Keeping a list of all employees who are authorized to work from home.

2) Keeping a list of all company equipment in the homes (or other virtual office space) of WFH employees.

3) Remote Work Agreements, which include (taken directly from the regulation):

(a) While working remotely, the employee must agree to maintain confidentiality of consumer data, must maintain all collection agency data electronically and may not print hard copies or otherwise repro-duce copies of collection agency data.
(b) The employee must read and agree to comply with the licen-see’s IT security policy and any updates.
(c) Employee must agree to maintain the safety and security of licensee’s equipment at all times as more particularly described by the licensee.
(d) An employee must review a description of the specific type of collection work the employee or class of employee is allowed to perform while working from their virtual office.
(e) The employee must agree not to disclose or convey to the con-sumer that the employee is working from a virtual office or that the virtual office is a place of business.
(f) An employee must be advised that the employee’s collection agency activities are subject to review and calls to and from the virtual office will be monitored and recorded.

4) Virtual office requirements, which include (taken directly from the regulation):

(a) It must have full connectivity with the licensee’s business office systems including computer networks and phone system and must provide the licensee the same level of oversight and monitoring ca-pacity as if the employee were performing their activities in the business office.
(b) It must have the capability to record calls made to and from the virtual office and to monitor virtual office calls in real time.
(c) It must be located within the United States and, within one hundred miles of the licensee’s business office.
(d) It must be in a private location where the employee can main-tain consumer confidentiality during the performance of their collec-tion activities.
(e) It must meet all security requirements of this section and contain the equipment necessary to conduct the licensee’s work safely and efficiently.
(f) Each employee shall be connected to the business office via a virtual office that requires unique credentialing for access by each employee.
(g) No more than one employee may work from a virtual office from the same physical location, except that cohabitating employees may each maintain a virtual office from their shared residence.
(h) Employees may not print or store physical records in the em-ployee’s virtual office.

5) Employee requirements to work from home (taken from the regulation):

(a) To become eligible to work from a virtual office, the employ-ee must have completed a training program at the licensee’s business office, which covers topics including compliance, privacy, confiden-tiality, monitoring and security, and other issues that apply particu-larly to working remotely from a virtual office.
(b) In addition, an employee must complete a minimum of forty-five days of direct oversight and mentoring in the licensee’s business office prior to working from a virtual office. This requirement may be waived by the board under emergency circumstances that the board has determined makes it impossible to perform.
(c) Once an employee begins to work from a virtual office, they must be subject to the same levels of communication, management, over-sight and monitoring via telecommunications and computer monitoring as they would if working in the business office.
(d) While working remotely the employee must comply with all ap-plicable laws and regulations as outlined in chapters 19.16 and 18.235 RCW and chapter 308-29 WAC.

6) IT Security Policy requirements (taken from the regulation):

(a) Virtual office access to the collection agency’s secure sys-tem must be through the use of a virtual private network “VPN” or oth-er system that requires usernames and passwords, frequent password changes, authorization, multifactor authentication, data encryption, and/or account lockout implementation.
(b) The immediate installation or implementation of any system updates or repairs in order to keep information and devices secure.
(c) The provision of safe and secure storage with expandable ca-pacity for all electronic data including consumer and licensee data.
(d) Virtual offices must contain computers and/or other electron-ic devices that have secure computer configurations and reasonable se-curity measures such as updated antivirus software and firewalls.
(e) Access to licensee’s systems must occur on company-issued computers and electronic devices whose use is restricted to authorized employees while working at their virtual office, and an employee’s use of devices must be limited to employment related activities on behalf of licensee.
(f) Consumer data is accessed securely through the use of encryp-tion or other secure transmission sources.
(g) An action plan has been developed and communicated with rele-vant employees on how to handle a data breach arising from remote ac-cess devices in accordance with applicable laws, which shall include any required disclosures of such breach.
(h) A disaster recovery plan has been developed and communicated with relevant employees on how to respond to emergencies (e.g., fire, natural disaster, etc.) that have the potential to impact the use and storage of licensee’s data.
(i) The secure and timely disposal of licensee’s data as required by applicable laws and contractual requirements.
(j) An annual internal or external risk assessment is performed on the collection agency’s protection of licensee’s data from reasona-bly foreseeable internal or external risks. Based on the results of the annual risk assessment, the collection agency shall make adjust-ments to its data security policy if warranted.
(k) The licensee can stop the virtual office’s connectivity with the network and remotely disable or wipe company issued computers and electronic devices that contain or have access to licensee’s informa-tion and data when an employee no longer has an employment relation-ship with the company.

The main disrupter is the training requirements in Washington’s Work From Home regulations. According to Underwood, the original proposal was worse. The original proposal did not allow any collection agency to have work-from-home agents. Under this new regulation, for an employee to be eligible to work from home. they need to have 45 days on “in house” (in the physical office) oversight.

This would apply for anyone hired during the pandemic at a collection agency licensed in Washington State. Or, at least, that’s the intent. The regulation doesn’t make this explicit. Underwood, however, suggests that employees who were employed at least 45 days before the date of Washington’s pandemic state of emergency would be considered to have fulfilled the “45 days of oversight” requirement.

This regulation is in effect as of 15 February 2021 — so if you haven’t already established this protocol for your Washington license, it is highly recommended that this task move a little higher up on your priority list. Washington State licensee audits will be paying close attention to these new work from home rules.

Show Notes: 

A financial services system must work for everyone. But how is that goal achieved? In 1968, President Johnson formed the National Commission on Consumer Finance (NCCF) which later issued a report in 1972 with recommendations of ways to change and improve a growing consumer financial services industry. Over fifty years later, the Consumer Financial Protection Bureau (CFPB) formed a Task Force on Federal Consumer Financial Law.

The Task Force was charged with putting together a report which would offer recommendations to meaningfully improve consumer protections and the financial marketplace.

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Todd Zywicki, Chair of the CFPB’s Task Force and Professor of Law at George Mason University stops by Clark Hill’s Credit Eco to Go to discuss the Task Force’s report and recommendations. The core themes of the report: inclusion (credit access), education, research, and regulatory coordination, are not surprisingly the same themes discussed by the NCCF many decades ago. Todd tells us that members of the Task Force hope this report can bring about an important dialogue around consumer financial services, the role of credit and the appropriate regulatory framework.  

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Funk Game Loop by Kevin MacLeodLink: https://incompetech.filmmusic.io/song/3787-funk-game-loopLicense: http://creativecommons.org/licenses/by/4.0/