Archives for May 2021

On May 10, 2021, not only did the District Court in the Southern District of California grant summary judgment in favor of the defendant debt collector, it did so on its own motion. Yes- you read that right- the court entered a judgment in favor of the debt collector where the debt collector had not even asked for it to do so.

In the case of Pearson v. Apria HealthCare Group, Et al. (3:19-cv-02400 S.D. CA), a consumer alleged the defendant debt collector violated the Fair Debt Collection Practices Act (FDCPA) and the Rosenthal Fair Debt Collection Practices Act (RFDCPA).  According to the undisputed facts, the entirety of the case centered around three calls that the consumer did not answer. The consumer did not learn that the calls came from a collection agency until she called the number back, and asked for all calls to stop. The debt collector honored the consumer’s request and did not make any additional calls or collection attempts. Based on these undisputed facts, the consumer moved for summary judgment on the FDCPA claims.

In reaching its conclusion, the court analyzed the word “communication” as it is defined in the FDCPA. In case anyone needs a refresher (and hasn’t been obsessing over this word since April 21^st when the Hunstein decision came out), the FDCPA defines ‘communication’ as “the conveying of information regarding a debt directly or indirectly to any person through any medium.”  In holding that unanswered calls are not a communication, the court noted that no “information regarding a debt” was conveyed directly or indirectly to the consumer by her receipt of unanswered calls.   Interestingly, in discussing the FDCPA generally and the harms it was meant to prevent, the court noted that the FDCPA was not designed to deter mere information gathering or message delivery. Also of note- the consumer claimed, and the debt collector disputed that the calls were made before 8 am; however, the court deemed that such dispute was irrelevant.

In another interesting twist to this case, although it was the consumer who filed the motion for summary judgment, and the debt collector did not file a cross-motion on the FDCPA claims, the court on its own motion, granted summary judgment in favor of the debt collector on all three FDCPA claims filed by the consumer.   The court found that the facts were undisputed, and since the consumer had a full and fair opportunity to prove her case and failed to do so, it was appropriate to grant summary judgment in favor of the debt collector.

insideARM Perspective:

This decision, of course, does not mean that debt collectors can make as many calls to consumers as they wish as long as they hang up.  Reg F, anyone? That said, anyone who has spent any time in the litigation department of an accounts receivable entity knows that consumer attorneys have filed lawsuits for far less.  For that reason, decisions like this are good to note and keep on hand; you never know when you need a quick way to combat a frivolous case.

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Did you know over 50% of cases relevant to the industry actually have positive outcomes?  If you want insight into all of the relevant cases with the ability to search by compliance topic, give our Case Law Tracker a spin.  Our weekly roundup will help you see at a glance both the positive and the negative decisions in a given week, and our search tool can help you easily filter positive and negative results by topic.

TAMPA, Fla. — ProVest, an industry leader in serving legal process, is celebrating its 30^th anniversary. In 1991 Scott Strady founded the firm with the vision to create a nationwide network of agents, down to the county level, to manage the entire process of service for law firms and banking clients.

“Prior to ProVest, law firms primarily worked directly with countless private process servers, small agencies, sheriffs, and the various clerks and courts. It was cumbersome, time-consuming, and expensive to manage internally,” Strady said. “We are grateful to our early clients, many of whom are still with us, who trusted us to manage their service of process needs, beginning with Florida where we covered all 67 counties. In 2003, one of our blue-chip clients invited us to open an office in Illinois to serve its Midwest clients – from there our capabilities and reach expanded across the country.”

According to CEO James Ward, “This milestone is a testament to our knowledgeable and tenured team. While technology is an important and growing part of the industry, our strong relationships – from our clients to our agents in the field, enables us to solve problems and to efficiently manage millions of files while ensuring respectful due process for defendants.”

Ward said, “Scott’s entrepreneurial drive, team spirit, a focus on exceptional customer service, and relationships are the foundation of our company. We are grateful to our mortgage foreclosure and creditors rights clients for putting their trust in ProVest for 30 years. We look forward to supporting their growth and ours.”

About ProVest LLC

Founded in 1991, in Tampa, Florida, ProVest plays a critical role by ensuring that defendants in a legal action have been properly served process, thus helping to protect their constitutional rights. ProVest specializes in managing the service of process related to creditors’ rights and mortgage defaults. ProVest annually serves millions of documents for the U.S.’s most notable law firms, financial institutions and insurance companies. Learn more at provest.com.

 

As the result of an investigation sparked by a consumer complaint, the Maryland Office of the Commissioner of Financial Regulation (Commissioner) has alleged a Missouri state-chartered bank and its fintech partners violated various Maryland licensing and credit-related statutes. The case is Salazar v. Fortiva Financial, LLC, Atlanticus Services Corporation, and the Bank of Missouri s/b/m Mid-America Bank & Trust Company.  

The investigation:

Upon receiving a complaint from a consumer regarding the Bank, the Commissioner conducted an investigation which showed the consumer, a Maryland resident, obtained a “Fortiva Consumer Loan” in the amount of $5,000 (less a $99 fee) with an annual percentage rate of 35.98% payable over 48 months. The Bank originated the personal loan, and the payments to be made by the consumer totaled $9,308.16.

During the investigation, the Commissioner discovered that neither the Bank, Fortiva, or Atlanticus were Maryland corporations, and none held Maryland licenses. The investigation showed that the Bank began offering and issuing personal loans to consumers in 2014 via direct solicitation and continues to offer retail credit financing products to Maryland consumers at over 150 retail locations in Maryland. According to the Bank’s numbers, over 7,000 credit accounts issued by the Bank to Maryland residents remain outstanding.    

The allegations:

The Charge Letter filed by the Commissioner alleges that the Bank of Missouri (Bank) issued loans to Maryland consumers, while Fortiva Financial, LLC (Fortiva) and its parent company Atlanticus Services Corporation (Atlanticus), each Georgia Corporations, processed credit applications relative to the loans and then serviced the loans for the Bank.   The Bank owned the loans throughout their life cycle and retained the creditor status, but Atlanticus/Fortiva handled all of the consumers’ interactions relative to the loans.   

The Commissioner has alleged these actions violated the following state laws:

• The Maryland Consumer Loan Law, by making consumer loans without being licensed.
• Maryland’s Credit Grantor Closed End Credit Provisions, for offering and/or making installment loans in Maryland without being licensed.
• Maryland’s Credit Grantor Revolving Credit Provisions, making a loan or extension of credit without being licensed.
• The Maryland Credit Service Businesses Act, by assisting Maryland consumers in obtaining an extension of credit by accepting and processing credit applications for credit owned and/or offered by a third-party
• The Maryland Collection Agency Licensing Act, soliciting and/or collecting a consumer claim on behalf of another without a license.

Violations of these statutes can result in hefty fines. For each violation occurring before October 1, 2018, the Commissioner may impose a penalty of up to $1,000.00 for the first violation and up to $5,000.00 for each subsequent violation. For each violation occurring on or after October 1, 2018, the Commissioner may impose a penalty of up to $10,000.00 for the first violation and up to $25,000.00 for subsequent violations.

The Bank denies it violated the statutes and removed the matter to federal court, arguing that since it is a federally chartered institution, the state law claims are preempted by the Federal Deposit Insurance Act. 

insideARM Perspective:

It seems like there is a whole new world emerging as financial service companies and fintech companies, in particular, try to meet the needs of consumers. Fintech companies may have the ability to meet consumers’ technological needs better than traditional banks, but do they get to take advantage of the benefits given to federally chartered banks? Do federally chartered banks retain their exemption from state law when they have little to no interaction with the consumer?  The state of Maryland at least says no. It’s an interesting question, and we’ll see what the federal court decides in this case. That said, accounts receivable entities would be well advised to watch this case and inquire about their fintech clients’ licensing status.

SACRAMENTO, Calif. — After a nationwide search, the California Department of Financial Protection and Innovation (DFPI) announced today it has hired Christina Tetreault to lead the new Office of Financial Technology and Innovation, which will provide a national model for fostering responsible innovation by offering early guidance to entrepreneurs developing financial products and services in California. 

The announcement finalizes hiring for the most critical positions needed to stand up major offices and divisions to carry out the California Consumer Financial Protection Law (CCFPL), which took effect Jan. 1. In the next few months, Tetreault will work to establish regular ‘office hours’ for fintech innovators and stakeholders and plans to host listening sessions to gather feedback on how the San Francisco-based office can provide support and guidance to emerging businesses that will spur job creation and safeguard consumers.  

Earlier this year, the DFPI announced the hiring of Suzanne Martindale, a veteran consumer advocate and key architect of the new law, to lead the Consumer Financial Protection Division. The new division will be responsible for regulating previously unregulated financial services providers and debt collectors and establishing a market monitoring and research arm to keep up with industry trends. The division will also conduct targeted outreach to underserved communities throughout the state.

The Department this month also announced the hiring of Brian Gould to lead the newly created Office of the Ombuds, which will provide an impartial review of complaints and resolutions with a goal to improve and streamline department operations.

“We are creating a national model in California that will better protect consumers, help innovators and entrepreneurs understand our expectations, and support the creation of responsible financial products,” said DFPI Commissioner Manuel P. Alvarez. “The leadership and expertise each of these individuals brings will help us execute the ambitious responsibilities we have under the new law.” 

Tetreault joins the DFPI after most recently serving as Manager of Financial Policy for Consumer Reports. An attorney with expertise in emerging financial technologies and financial data use, her expertise will play a critical role in the creation of this office.

Martindale most recently served as Senior Policy Counsel and Western States Legislative Manager at Consumer Reports, where she worked for more than a decade on state and federal policy regarding banking and consumer credit. She is a lecturer in Student Loan Law at the University of California, Berkeley School of Law, and was a pro bono attorney at the East Bay Community Law Center’s Consumer Justice Clinic from 2015 to 2018.

Gould has a record in strategic planning and launching new programs within state government, most recently in the Office of State Treasurer, where he worked with stakeholders from across the state to institute the CalSavers program.

A priority of Gov. Gavin Newsom, the Consumer Financial Protection Law has given the department broad new enforcement and oversight powers, and additional resources to foster financial technology innovation, reach vulnerable populations, and conduct independent investigations into complaints against the DFPI.

The DFPI licenses and regulates state-chartered banks and credit unions, commodities and investment advisers, money transmitters, mortgage servicers, the offer and sale of securities and franchises, broker-dealers, nonbank installment lenders, payday lenders, student-lending servicers, escrow companies, Property Assessed Clean Energy (PACE) program administrators, debt collectors, rent-to-own contractors, credit repair companies, consumer credit reporting agencies, debt-relief companies, and more.

Last week, we explained the Comprehensive Debt Collection Improvement Act (CDCIA).  To recap, the CDCIA is actually 8 separate bills relative to debt collection and covers the following topics:   

• Amends TILA to restrict the use of confessions of judgment for small business owners.
• Amends the FDCPA to prohibit debt collectors from threatening a servicemember.
• Amends TILA to require the discharge of private student loans in the case of permanent disability of the borrower.
• Bars entities from collecting medical debt or reporting it to a consumer reporting agency without giving a consumer notice about their rights under the FDCPA and the FCRA.
• Amends the FDCPA to prohibit a debt collector from contacting a consumer by email or text message without a consumer’s consent to be contacted electronically.
• Expands the definition of debt covered under the FDCPA to include money owed to a state or local government; municipal utility bills, tolls, traffic tickets, and court debts are subject to the FDCPA. It would also extend FDCPA protections related to a debt owed to a federal agency and limit the fees debt collectors can charge.
• Updates monetary penalties for inflation, including class action limits, and clarifies that courts can award injunctive relief, as well as add protections for consumers affected by national disasters.
• Amends the FDCPA to clarify that the statute covers non-judicial foreclosure proceedings.

As expected, on Thursday, March 13, 2021, the CDCIA passed in a 215- 207 vote.   Consumer groups are celebrating the vote, and after the vote passed, House Financial Services Chairwoman Maxine Waters had this to say:

During the pandemic crisis, which has harmed all of our communities, debt collectors have earned record profits. Their tactics are often abusive and predatory. Many debt collectors harass consumers with frequent phone calls, make threats, and provide misleading information to consumers. The debt collection industry is also plagued by poor record-keeping, resulting in many consumers being harassed for debts that they do not owe. Debt collection is among the top issues that the Consumer Financial Protection Bureau receives the most complaints about from consumers, and those complaints have risen since 2019.

Her full comments can be found here. 

In opposition to the bill, the House Financial Services Committee’s top RepublicanRep. Patrick McHenry [R-N.C.], stated the bill “will hurt small businesses, increase risk to the financial system, and drive up the cost of credit for all borrowers.”  Excerpts from Representative McHenry’s speech can be found here. 

What happens next? 

Now that the house has passed the bill, it’s off to the Senate. Whether it will have any traction there remains to be seen. Several accounts receivable industry groups continue to voice their opposition to the Bill.  We will keep you updated with any developments. 

Let’s be honest – having an accessible digital customer portal is non-negotiable for collections in 2021. When a customer gets an initial communication from you, whether it’s a letter or a phone call, they will almost certainly Google you. Many of them will look for your online customer portal, and what they see will impact their willingness to pay. You definitely don’t want your online bill pay portal to turn away motivated consumers.

What’s more, your self-service portal is a low-effort channel and lower-effort equals lower cost. You don’t want that self-pay channel to frustrate customers and push them to other, more expensive channels if you don’t have to. Per Gartner Research, low-effort interactions result in lower costs across financial services. “Overall, a low-effort interaction costs 37% less than a high-effort interaction. Low-effort experiences reduce costs by decreasing up to 40% of repeat calls, 50% of escalations and 54% of channel switching.”

Want to make sure your customer portal functions as well as it should? Here are four key items to consider.

Want more collections strategy insight like this? Sign up for the iA Strategy & Tech Newsletter.

1. The Bare Necessities

At a minimum, customers must be able to make a payment easily through your web-based portal. After all, most will be inclined to do so. Around 67% of consumers prefer making payments online. But the minimum really isn’t enough anymore. As banking continues to go digital, customers will expect robust online bill pay. That is, they will want the ability to fully service their accounts online. This includes access to account details, like payment histories and documentation, and the ability to view payment options. And by payment options, I don’t just mean single payments via ACH or credit card. Customers want the ability to negotiate a payment plan that works for them. When you build a digital customer portal, it makes sense for you to give them this ability; if customers who fit within the “rules” can create a payment plan for themselves online, and that frees up your agents to deal with more unique cases.

2. Friends in (Mobile) Places

A growing number of consumers pay their bills on their smartphones. Not only does your self-pay portal need to be robust and user friendly on a desktop, but it has to be accessible and easy to use on mobile devices. There have been some debates about creating mobile apps for collections, and while the ROI on building an app is largely unknown, your portal should feel like an app. When you’re testing your portal, test on a variety of mobile devices. Beware out-of-control scrolling, too many buttons, tiny text, or awkwardly spaced sections. In fact, if you are building or adapting a customer portal, consider designing it around mobile use.

3. Judging a Website by Its UX

We know; you shouldn’t judge a book by its cover. But, bottom line, mobile friendliness and robust payment options mean essentially nothing if the customer doesn’t trust your portal. If it looks like a LiveJournal from 2003, you’re in trouble. Customers will not engage in financial transactions on a site that does not look clean and professional. Make sure to consider color scheme and font (not to mention ADA compliance…). Also, make sure the site is not cluttered and that it is clear to users how they should use the portal. Brand consistency is also a key to customer comfort, so your portal should use the same logos and color schemes as all of your other customer communications.

4. Find the Pain

If your portal confuses or frustrates a decent number of customers, you have a big problem. You want to make the portal as intuitive and easy-to-use as possible. UX designers refer to these frustrating elements “failure patterns,” and it is in your interest to test for them and resolve them. Alex Kreger of UX Design Agency recommends testing and mapping out the process for consumers so you can find the user pain points. “The ‘failure mapping’ process involves conducting UX audits of a financial institution’s existing products and services, as well as similar solutions on the market, to find possible user pain points,” he says. “If failure mapping is integrated in the user journey map, the institution will get a view of user experience problems that generate pain points. It will help to identify possible problems and create solutions for them before ruining the product’s reputation.”

Bonus listening: Find out how NCB’s self-service web-based portal allows consumers to make payments on their own terms and to set their preferences of when and how they want to be communicated with, including opting-in to receiving emails and texts. Hear more about it on the Credit Ecosystem to Go podcast.

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Erin Kerr is the Director of Content at insideARM and the chair of iA Strategy & Tech – a conference for collections strategy executives. She is a seasoned receivables management professional, with recent experience in digital strategy and a passion for crafting digital solutions for a better customer experience.

LITTLE CANADA, Minn. — Since the April 21 Hunstein v. Preferred Collection & Mgmt. Servs. ruling, the Print & Mail Coalition (the  “Coalition”) has received questions from many of its clients across the accounts receivable management  (ARM) industry. Below are responses to some of the most frequently asked questions. The responses should not be taken as legal advice.  

How is the Print & Mail Coalition supporting me? 

As critical suppliers to the industry, the Coalition is coming together as a powerful, united voice to identify of the impact the ruling. We will then file an amicus brief to ensure the Coalition’s perspective and legal arguments support the ARM industry. Additionally, the Coalition is staying in close contact with the industry associations to coordinate the amicus brief arguments, thereby ensuring that each brief presented to the court is unique and effective.  

In light of the ruling, what should I be doing? 

There are several things to do:  

• Talk to an attorney who specializes in the ARM industry and who is familiar with  the Hunstein case; 
• Understand the ruling and the impact to your business; 
• Stay abreast of the support offered from ACA, RMAI, and The iA Institute; and • Review your insurance policies to identify your individual and class action claim deductibles and the details of your coverage. 

What is the financial impact of a Hunstein copycat lawsuit? 

A copycat class action lawsuit under the Fair Debt Collection Practices Act (FDCPA) sets a damages cap that is equal to the lesser of 1% of the specific agency’s net worth or $500,000. Consult your counsel for a clear understanding of the FDCPA class cap and its application to your agency. 

What should I do if I receive a claim? 

If you receive a claim: 

• Contact your attorney; 
• Inform both ACA International and RMAI via email at the following addresses;
• ACA: Colin Winkler – winkler@acainternational.org
• RMAI: David Reid – dreid@rmaintl.org

• Contact your insurance company, confirm that the counsel the company assigns to you is an  FDCPA defense attorney, and/or understand your right to be involved in choosing counsel.

Why are May 12 and May 25 significant dates? 

May 12 was the original deadline for the defendant agency to file a petition for a rehearing. However,  on May 6, the defendant made a request to extend the Petition for Rehearing en banc deadline. The court granted the request, and the new deadline is May 25. 

What happens once the defendant files the Petition for a Rehearing en banc?  Once the defendant files for a rehearing, the Coalition, and any other interested non-party, has seven days to file an amicus brief. 

What is an amicus brief? 

Amicus brief means “friend of the court.” These types of briefs are filed when a non-party to an action petitions the court to file a brief related to the lawsuit. The non-party generally has a strong interest in the subject matter and provides related education and/or commentary that may not have been fully considered in the initial hearing. The Coalition, as well as the industry associations, meet the criteria for filing an amicus brief.  

What is the purpose of the Coalition’s amicus brief? 

The purpose of the Coalition’s amicus brief is to educate the court regarding our role in the collection process. The brief will include appropriate and unique legal arguments for the court’s consideration that may not have been addressed during the original hearing. 

What happens after the Coalition files the amicus brief? 

There is no specified date or timeline for the court to hear the defendant’s petition or review the amicus briefs.  

If the 11th Circuit Court grants the rehearing, what happens to any pending or future copycat lawsuits? 

In layman’s terms, if the 11th Circuit Court grants the rehearing, it could be expected that a “stay” would be granted and that all copycat cases in the 11th District’s lower courts would be put on hold.  

What happens if the request for rehearing is denied or the opinion is upheld upon rehearing? 

While the Coalition is hopeful our amicus brief (along with those filed by other groups) will have a  positive impact on the court’s reconsideration of the legal issues involved in the lawsuit and the defendant’s motion to dismiss, we understand that this entire legal process may be lengthy. If denied,  there are additional legal avenues available to the defendant in the case and non-parties if there is a  subsequent appeal. The Coalition vows to work together to explore other legal avenues that may alter the ruling or mitigate its impact. Throughout the process, the Coalition will continue to develop and promote ideas that support the valuable print and mailing functions for the ARM industry. 

 

LOS ANGELES, Calif. —  Creditors Adjustment Bureau (CAB), a Los Angeles based commercial collection agency and law firm, is pleased to announce that Melanie Morcelle has joined the firm as Executive Vice President in charge of strategic business growth and client success programs.

Morcelle brings almost 30 years of leadership experience in the credit and collections industry. Most recently she served as a strategic executive business consultant implementing an agile methodology for several commercial collection entities. She is a recognized leader, presenter, and author in the global receivables management industry. Morcelle specializes in strategic expansion and key innovative solutions for Fortune 500 companies worldwide.

Brian Mitteldorf, CAB CEO, is very excited and honored to have Morcelle join the team. “Melanie’s industry experience and expertise will be a strong asset in helping us achieve our business goals this year and in the years to come,” Mitteldorf said.

“She has a proven record of driving strategic growth, and her result-driven style will undoubtedly enhance the CAB brand in the marketplace. We’re thrilled that our continued growth has enabled us to hire someone of Melanie’s caliber,” he added.

About Creditors Adjustment Bureau

Creditors Adjustment Bureau (CAB) has been partnering with companies to increase cash flow and reduce bad debt since 1954. CAB specializes in global receivables management, serving as both collection agency and law firm. This unique combination enables maximum recovery while ensuring exceptional customer service and retention. 

Contact:

Melanie Morcelle

Executive Vice President

Mobile: 716-207-5207

Office: 818-990-4800

melanie.morcelle@cabcollects.com | www.cabcollects.com

I’m sorry, the what?

Oh good. You’re here.

Today we’re going to talk about Maxine Waters’s Comprehensive Debt Collection Improvement Act (CDCIA) (H.R.2547).

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Oh, is this Reg F?

No. This is not Reg F. And it’s not from the CFPB. It…’s a lot of things. Eight things. So we’ll start at the beginning and work our way to the end.

Background

Back in March of 2020, House Financial Services Chairwoman Maxine Waters shared a 6-page plan. This plan, aimed at helping consumers who were just beginning to quarantine, many of whom found themselves out of work and with no expected income, sought monthly payments as well as suspension of nearly all consumer and small business debt payments, supported by reimbursements to creditors through the Federal Reserve.

Wait, did that happen?

No. Or at least not all of it. Lots of consumer protections were put in place during the (continuing, don’t forget) pandemic, including rent and mortgage protections. But Waters’s 6-page plan was not fully implemented.

Instead, it provided the backbone of what is now H.R. 2547, Comprehensive Debt Collection Improvement Act.

And that’s not Regulation F?

Right, it is not. In fact, there are pieces of the CDCIA that don’t entirely align with Regulation F; and Regulation F isn’t mentioned in the text of the CDCIA. Lots of talk about amending the FDCPA here and there; but there’s no clear link between this proposed bill and the CFPB — except in the places where the proposed bill explicitly tells the Director (of the CFPB) the things they’d need to do.

Essentially, what the CDCIA does is take 8 proposed consumer protection bills and consolidate them into one comprehensive consumer protection bill. The affected existing bills are:

HR 2540, the “Small Business Fairness Lending Act” (Velazquez)

Introduced by: RepNydia Velazquez (D-NY)

What it would do: Amend the Truth in Lending Act (TILA) to restrict the use of confessions of judgment for small business owners, extending the protections that currently exist in consumer lending.

What it would become as part of HR 2547: Title I — Small Business Lending Fairness Act

HR 1491, the “Fair Debt Collection Practices for Servicemembers Act” (Dean)

Introduced by: Rep Madeleine Dean (D-PA)

What it would do: Amend the FDCPA to prohibit debt collectors from threatening a servicemembers.

What it would become as part of HR 2547: Title II — Fair Debt Collection Practices for Servicemembers Act

HR 2498, the “Private Loan Disability Discharge Act” (Dean)

Introduced by: Rep Madeleine Dean (PA)

What it would do: Amends TILA to require the discharge of private student loans in the case of permanent disability of the borrower.

What it would become as part of HR 2547: Title III — Private Loan Disability Discharge Act

HR 2537, the “Consumer Protection for Medical Debt Collections Act” (Tlaib)

Introduced by: Rep Rashida Tlaib (D-MI)

What it would do: Bar entities from collecting medical debt or reporting it to a consumer reporting agency without giving a consumer notice about their rights under the FDCPA and the FCRA.

What it would become as part of HR 2547: Title IV — Consumer Protection for Medical Debt Collections Act

HR 1657, the “Ending Debt Collection Harassment Act” (Pressley)

Introduced by: Rep Ayanna Pressley (D-MA)

What it would do: Amend the FDCPA to prohibit a debt collector from contacting a consumer by email or text message without a consumer’s consent to be contacted electronically.

What it would become as part of HR 2547: Title V — Ending Debt Collection Harassment Act

HR 2572, the “Stop Debt Collection Abuse Act” (Cleaver)

Introduced by: Rep Emanuel Cleaver (D-MO)

What it would do: Expand the definition of debt covered under the FDCPA to include money owed to a state or local government; municipal utility bills, tolls, traffic tickets, and court debts are subject to the FDCPA. It would also extend FDCPA protections as it relates to debt owed to a federal agency, and limit the fees debt collectors can charge.

What it would become as part of HR 2547: Title VI — Stop Debt Collection Abuse Act

HR 2628, the “Debt Collection Practices Harmonization Act” (Meeks)

Introduced by: Rep Gregory Meeks (D-NY)

What it would do: Updates monetary penalties for inflation, including class action limits, and clarifies that courts can award injunctive relief, as well as add protections to consumers affected by national disasters.

What it would become as part of HR 2547: Title VII — Debt Collection Practices Harmonization Act

HR 2458, the “Non-Judicial Foreclosure Debt Collection Clarification Act” (Auchincloss)

Introduced by: Rep Jake Auchincloss (D-MA)

What it would do: Reverse Obduskey v. McCarthy and Holthus LLP by amending FDCPA to clarify that entities in non-judicial foreclosure proceedings are covered by the statute.

What it would become as part of HR 2547: Title VIII — Non-Judicial Foreclosure Debt Collection Clarification Act

You said something about “pieces not aligning with Reg F”?

Right. HR 1657, the “Ending Debt Collection Harassment Act,” if passed as part of the comprehensive CDCIA, would take away an agency’s ability to rely on consent captured by the creditor, or the immediately previous agency. Each handler of the debt would have to get their own consent.

Additionally, within the CDCIA itself (Title V, Section 502 (c)), there’s this:

(c) Protection Of Consumers From Unlimited Texts And Emails Used In Debt Collection.—Section 806 of the Fair Debt Collection Practices Act (15 U.S.C. 1692d) is amended by adding at the end the following new paragraph:

“(7) Contacting the consumer electronically (including by email or text message) without consent of the consumer to communicate via that method, after such consent has been withdrawn, or more frequently than the consumer consents to be contacted.”.

Regulation F provides a safe(ish) harbor for phone calls with its “7-in-7” rule. But it did not establish any safe harbors for the number of texts or emails. Some consumer reporting suggested that the CFPB was granting collection agencies unlimited license to text and email. It really didn’t. And Section 502 (c) doesn’t give any guardrails, either. Instead, it seems to affirm that agencies currently have the power to text and email unlimitedly (which they can’t), and that this rule will stop that practice (which isn’t happening).

[deep sigh]

I told you, it was a lot.

So, what should we do right now about this? Panic? Should we panic?

No. Don’t panic. But keep this on your radar — unlike any of us did with Hunstein.

The CDCIA passed through the House Financial Services Committee. Here are the steps a Committee idea has to go through in order to become a law. (I’ve struck out the ones that have happened.)

1. Someone has an idea.

2. A representative (in this case, Maxine Waters) sponsors the bill and it’s assigned to a committee for study.

3. Once studied, it’s decided if the proposed bill should move to the next step for voting. (This happened on 21 April 2021, where the HFSC not only passed all eight of the proposed bills, but Waters’s comprehensive CDCIA, too.)

4. If the committee passes it (which it did: 30-23, generally along party lines), the bill is put on the calendar for a full vote by the House of Representatives. It only needs a simply majority (218 out of 435) to pass on to the Senate. We do not know the date of the House vote yet.

5. In the Senate, the bill is discussed, debated, and possibly amended, and finally voted on. Again, it only needs a simple majority: 51 out of 100.

6. If it passes the Senate, it’s referred back to a committee of House and Senate members to iron out the wrinkles.

7. It’s then returns to the House and Senate for one final approval.

8. The President has 10 days to sign or veto the proposed bill.

But here’s the thing.

Oh no.

Any of these proposed bills could make it to the finish line. Rep Waters’s CDCIA may not survive, but one of the 8 bills that make up the full CDCIA could.

So we should panic?

No. But: be vigiliant. And we’ll be vigilant, too. Reach out with any questions! (And if you’re not a Research Assistant member, I’ll likely try to sell you on becoming a Research Assistant member. But I’ll still answer your question.)

FRANKLIN, Mass. — Interactions, one of the world’s largest standalone conversational artificial intelligence (AI) companies, today announced that Aargon Agency, a leading accounts receivable management (ARM) company that works with major hospital systems and medical offices, is deploying an Interactions Virtual Collection Agent (VCA) to drive revenue recovery while streamlining the customer and agent experience.

Aargon offers state-of-the-art technology along with proven debt recovery services such as first-party, early-out pre-collection, and medical billing. To continue enhancing the collections experience for both customers and agents, Aargon needed an automated solution that could accelerate the digital transformation of its contact center. The VCA will allow Aargon customers to efficiently self-manage their accounts when preferred, and give live agents the opportunity to focus on accounts that require human engagement.

“Aargon was founded on cutting-edge technology 25 years ago, and our partnership with Interactions represents the evolution of that founding philosophy, as well as the continued growth of our digital collection process,” said Duane Christy, Founder and CEO of Aargon Agency. “We believe that Interactions understands the specific needs of the ARM industry and our clients; their VCA is best-in-class and will give customers and patients the ability to resolve their accounts on their terms.”

Interactions VCA blends conversational AI with real-time human understanding to behave like a company’s best agent, at scale. By seamlessly integrating into current technology ecosystems, the VCA consistently delivers a personalized experience across channels. Driven by its sophisticated proprietary technology, the VCA is uniquely positioned to increase revenue recovery at a reduced operational cost, while powering conversational, judgment-free transactions for consumers.

“In the past year, we’ve seen the demand for efficient, yet compassionate, collections transactions skyrocket,” said Mike Iacobucci, CEO of Interactions. “By deploying the VCA in both inbound and outbound voice applications, Aargon Agency is evolving its digital footprint and staying at the forefront of innovation in collections. We’re excited to help drive the next generation of Aargon’s exceptional customer experience.”

To learn more about the variety of benefits that Interactions Virtual Collection Agent brings to ARM agencies, please visit www.interactions.com/industries/collections/.

About Interactions

Interactions provides Intelligent Virtual Assistants that seamlessly assimilate conversational AI and human understanding to enable businesses to engage with their customers in highly productive and satisfying conversations. With flexible products and solutions designed to meet the growing demand for unified, omnichannel customer care, Interactions is delivering unprecedented improvements in the customer experience and significant cost savings for some of the largest brands in the world. Founded in 2004, Interactions is headquartered in Franklin, Massachusetts with additional offices worldwide. For more information, visit www.interactions.com.

About Aargon Agency

Established in 1996, Aargon Agency Inc., has become a national leader in debt recovery with vast experience providing collection services to major utility companies and healthcare providers nationwide. We are a nationally licensed debt collection agency headquartered in Las Vegas, Nevada with four offices in Hawaii, Colorado, Florida and Missouri. Aargon Agency, Inc. offers comprehensive debt collection agency services nationwide including first party, early-out collection & billing services. Our strengths are based on innovative, resourceful and aggressive debt collection practices that are continuously developed using the latest technology. From high-capacity, networked call centers in all US time zones to the most highly trained debt collectors, maximizing the recovery of debt is our primary mission.