Archives for July 2021

Did You Forget Something?

The Spanish philosopher George Santayana (Jorge Agustín Nicolás Ruiz de Santayana y Borrás) observed that those who cannot remember the past are condemned to repeat it. As it cheers recent decisions from the Supreme Court and multiple federal circuit courts of appeals, the credit and collection industry certainly proves him right.

[article_ad]

Let’s take a minute to discuss the past. Do you remember the Class Action Fairness Act of 2005 (“CAFA”)? CAFA was a law championed by the business community to make it easier to pull class actions into federal court. Why? Let’s look at the congressional findings.

Congress found that “class action lawsuits are an important and valuable part of the legal system when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.” After decades of defending class actions across the country and of teaching consumer protection law I agree, both from a practical perspective and from an academic one. Class actions create efficiencies that can actually benefit defendants. You don’t believe me? Just ask Door Dash, which received a $12 million bill from AAA when its drivers individually filed mass arbitration demands, effectively punishing the company for its class action waivers.

The important thing to remember, though, is that Congress also found that over the decade preceding the enactment of CAFA, there had been numerous abuses of the class action process that had adversely affected interstate commerce and undermined public respect for our judicial system. Particularly relevant to the present is Congress’ finding in 2005 that:

Abuses in class actions undermine the national judicial system, the free flow of interstate commerce, and the concept of diversity jurisdiction as intended by the framers of the United States Constitution, in that State and local courts are—

• keeping cases of national importance out of Federal court;

• sometimes acting in ways that demonstrate bias against out- of-State defendants; and

• making judgments that impose their view of the law on other States and bind the rights of the residents of those

Please allow me to translate. Being stuck in state courts can be really bad if you are a class action defendant, especially if you are a big, out-of-state business like a bank, debt buyer, collection agency or law firm.

Congress declared that the purpose of CAFA was:

• assure fair and prompt recoveries for class members with legitimate claims;
• restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction; and
• benefit society by encouraging innovation and lowering consumer

Let’s recap. A mere sixteen years ago, the business community understood quite clearly that a federal court was far more likely to provide an even-handed, unbiased judicial forum than a local state court in which judges were likely to favor voters, contributors, and friends in the community. The business forces that supported CAFA argued that there was a need to increase access to federal courts in class and mass litigation in order to get out of what the American Tort Reform Association refers to as “judicial hellholes.” If you have had the opportunity to defend class actions just about anywhere in California or in places such as Madison County or St. Clair County, Illinois, you probably understand already why it can be really bad to be stuck in state court.

Federal court practice is not always a fun experience either, and there are certainly problems (like judges making up their own procedures) that Congress needs to address. But the odds of getting fair hearings at the trial court and appellate level certainly increase when the judges before whom you appear are not dependent upon large campaign donors or appointed by those who are dependent on such donors. CAFA provided additional opportunities to pull cases out of state courts through the process of removal to federal court.

What is the point of this bit of history? In 2005, the business community understood quite clearly why it wanted to get out of state courts and why federal courts were the solution to languishing in “judicial hellholes.” But then, the business community forgot the lessons of the past.

Flash forward a little over a decade after CAFA to 2016, when the Supreme Court decided Spokeo, Inc. v. Robins. If you talked to me about that case while it was pending before the high court, you know that I was very concerned that the business community was backing the wrong horse. I pointed out to multiple clients and colleagues that the legal position urged by Spokeo, Inc. was actually bad for businesses. I urged clients and colleagues not to fall for the trap of believing that which your adversary opposes must be good for you.

In Spokeo, the Supreme Court reiterated the need for a plaintiff to have standing to sue in federal court. A plaintiff who has not suffered a concrete, particularized, injury-in-fact does not present the “case or controversy” that is necessary for a federal court to have subject matter jurisdiction under Article III of the Constitution. Following the Spokeo decision, motions to dismiss for lack of subject matter jurisdiction became the favorite toy of the defense bar. Most such motions were denied, but since they were profitable for defense firms and clients loved the idea of trying to get cases tossed out of court, the motions continued.

The trend of largely unsuccessful Spokeo-based motions took a sudden turn in 2020. Although there had certainly been successful outcomes for defendants invoking Spokeo, 2020 was a big year for defendants (or so they thought). First, the Eleventh Circuit Court of Appeals held that the statutory damages provided for in the Fair Debt Collection Practices Act (“FDCPA”) did not eliminate the requirement that a plaintiff have an actual injury in order to have standing to sue in federal court. Next came a series of decisions from the Seventh Circuit Court of Appeals that mandated the dismissal of FDCPA cases because the plaintiffs failed to demonstrate the standing mandated by Spokeo. The Sixth Circuit got on the bandwagon, as have multiple district courts across the country. The business community cheered. My team cringed.

Before I explain, let me be clear: We use these decisions. We attack jurisdiction, when it is appropriate. The Seventh Circuit cases even suggest that it is our duty to do so. But that does not mean that we can ignore the consequences that are certain to follow.

When a case is dismissed from a federal court for lack of Article III standing, that is not a decision “on the merits,” and the defendant has not “won.” The plaintiff may be able to re-file in state court, depending on the state’s own standing jurisprudence. Admittedly, that does not happen often in our consumer cases. However, in light of all of the recent cases finding that plaintiffs lacked Article III standing, many plaintiffs’ attorneys are now filing suit in state court, sometimes in the “judicial hellholes” that led to the passage of CAFA. (Some other plaintiffs’ attorneys are skipping courts altogether and filing arbitration claims.) In a relatively recent trend, when defendants remove cases to federal courts, plaintiffs are moving to remand the cases back to state court, arguing that their claims do not give rise to Article III jurisdiction. And they are winning those motions.

On June 25, the Supreme Court issued its decision in TransUnion LLC v. Ramirez. The Court held that it is insufficient for the class representative to have Article III standing. Instead, every member of the class must also possess such standing for their class claims to proceed in federal court. Law360 quoted TransUnion’s attorney on the implications of the case: “It also will improve American businesses’ ability to serve their customers and workers efficiently, with reduced litigation burden.” Many businesses seem to agree. But will it?

TransUnion v. Ramirez does not eliminate the right to sue. It did not strike down the Fair Credit Reporting Act (“FCRA”). It did not hold that the plaintiff class failed to allege violations of the FCRA. What it did was deny access to federal courts to plaintiffs and class members who cannot demonstrate the particularized, concrete, injury-in-fact that is required for Article III standing.

However, cases under the FDCPA “may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction.” The FCRA contains identical language and similar jurisdiction provisions are in the Truth in Lending Act, the Equal Credit Opportunity Act, the Electronic Fund Transfers Act, and the Real Estate Settlement Procedures Act. A suit under any of those statutes may be brought in a state court that has jurisdiction over the amount in controversy.

The recent line of Article III cases does not let defendants defeat the claims under these statutes. Instead, the cases empower plaintiffs to sue in state courts and to keep their cases there. If ever the phrase “out of the frying pan and into the fire” had meaning, it seems to have it here. The business community has succeeded in getting itself out of the federal courts that it once knew it preferred and stuck in the “judicial hellholes” it wanted to escape.

My team and I are not the only lawyers with a sense of history and of impact. Justice Clarence Thomas recognized the anti-business impact of the majority decision in TransUnion. Joined by the unlikely trio of Justices Breyer, Sotomayor, and Kagan, he wrote, at footnote 9 in his dissent:

Today’s decision might actually be a pyrrhic victory for TransUnion. The Court does not prohibit Congress from creating statutory rights for consumers; it simply holds that federal courts lack jurisdiction to hear some of these cases. That combination may leave state courts—which “are not bound by the limitations of a case or controversy or other federal rules of justiciability even when they address issues of federal law,” ASARCO Inc. v. Kadish, 490 U. S. 605, 617, 109 S. Ct. 2037, 104 L. Ed. 2d 696 (1989)—as the sole forum for such cases, with defendants

unable to seek removal to federal court. See also Bennett, The Paradox of Exclusive State-Court Jurisdiction Over Federal Claims, 105 Minn. L. Rev. 1211 (2021). By declaring that federal courts lack jurisdiction, the Court has thus ensured that state courts will exercise exclusive jurisdiction over these sorts of class actions.

The old saying goes that he who laughs last, laughs best. As the business community cheers the recent line of Article III decisions that consign it to the “judicial hellholes” that it sought to avoid with CAFA, Santayana’s ghost is probably laughing.

RICHMOND, Va. — Spring Oaks Capital, LLC has achieved the important technical and operational milestone of having 100% of its outbound calls scheduled by machine learning models. Harnessing the power of its data to deliver optimal customer experiences and results across all engagement channels in a compliant fashion is core to Spring Oaks Capital’s strategy. Some customers prefer engaging directly with its team over the phone, therefore Spring Oaks Capital believes it’s important to be as proficient over this channel as they are over digital channels.

Spring Oaks Capital has been working toward this important milestone in a deliberate way by using a test-and-learn approach over the course of a year. They systematically increased the percentage of machine learning model-driven calling with well over half being scheduled in this way since the beginning of 2021 in their buildup to 100%. Their efforts have driven a significant improvement in their efficiency and have established a true differentiator for Spring Oaks Capital.

“This milestone is a great example of how we can pass on value to sellers and credit issuers,” explains Tim Stapleford, President and CEO of Spring Oaks Capital. “For nearly two years we have made significant investments in compliance, operations, and technology to create efficiencies that enable us to bid more competitively on portfolios. This is the commercial equivalent of passing on savings to consumers. By driving more effective and efficient operational models we can afford to maximize our competitiveness when acquiring credit portfolios.”

Spring Oaks Capital’s consumer-centric mentality and industry expertise was combined with its data and model-driven culture to establish the unique processes and technical capabilities required to make this possible. Their operations leadership and analysts are closely involved with the ongoing development of their machine learning models and experiments. Their technology platform supports continuous evolution to ensure they maximize resource utilization by contacting the right customers at the right time. As they worked toward this milestone, they kept the customer and employee experience top-of-mind.

They achieved this by implementing a fully automated, secure, and compliant real-time data platform in the cloud to serve as the foundation for our machine learning models. They’ve invested in the automation and tooling required by data scientists and engineers to build and deploy new machine learning model-driven experiments responsibly and rapidly.

These investments build upon the same mechanisms they use for the deployment of all the software in their environment. They use a combination of traditional and deep learning models in production. They are constantly improving existing models and exploring and deploying new types of machine learning model architectures to improve performance. They can also build these model-driven campaigns on different customer segments due to the flexibility of Their data environment.

Spring Oaks Capital believes in focusing on this important channel and is proud of achieving this milestone. More broadly, their ability to manage and utilize their data, and rapidly deploy increasingly effective machine learning models to engage their customers how and when they prefer sets Spring Oaks Capital apart.

About the author

Paul Hurlocker is the Chief Technology Officer at Spring Oaks Capital. Previously, Paul served as the head of Capital One’s Center for Machine Learning, an in-house consultancy and center of excellence for machine learning product delivery, innovation, education, research and development, and partnership across the business. Paul joined Capital One through the acquisition of Notch, a machine learning consulting firm that Paul founded in 2014. Prior to founding Notch and serving as its Chief Executive Officer until its 2018 acquisition by Capital One, Paul served in senior software development roles at Red Hat, Affinion, Plan- G, and other leading technology firms. Paul received his Master’s in Data Science from Northwestern University.

About Spring Oaks Capital, LLC

Spring Oaks Capital is a national financial technology company, focused on the acquisition of credit portfolios. The Company subscribes to an employee and consumer-centric operating philosophy that creates high-value jobs, a significant performance lift, and the highest standards of compliance. Spring Oaks’ business strategy is rooted in innovative data-driven technology to maximize collection results and a contact platform that offers multi-channel options to meet each consumer’s communication preference. Spring Oaks has the management vision and experience to nurture a culture and DNA that is unique in the space. The executive team maintains deep experience end-to-end across the consumer finance lifecycle with some of the largest global banks and innovative FinTech platforms. To learn more about Spring Oaks and our revolutionary FinTech platform, please visit www.springoakscapital.com.

MCLEAN, Va. — Numeracle announced today another key milestone in protecting consumers from illegal robocalls while making Caller ID even more trusted. In a recent history-making successful collaboration amongst industry leaders, T-Mobile and Partners Completed the First-Ever Wireless Call with Rich Call Data.

In support of empowering T-Mobile subscribers with more trusted information to be used in identifying wanted calls, technology companies, messaging industry stakeholders and voice service providers including First Orion, CTIA, Everbridge, iconectiv, NetNumber, Numeracle, and Twilio completed what is believed to be the first ever mobile call to combine authenticated Caller ID and Rich Call Data (RCD), powered by the STIR/SHAKEN framework and protocols, terminating on the T-Mobile wireless network.

In this collaboration, onboarding for the enterprise began via the Numeracle Entity Identity Management™ Platform. Numeracle completed entity vetting and validation to establish the Verified Identity™ status of the brand. Verified Identity was established via a compliance-based, know your customer (KYC) and customer due diligence process used to validate the business identity and calling competency in support of the STIR/SHAKEN call authentication framework.

The Numeracle platform was also utilized to collect, receive brand approval of, and associate RCD elements such as caller name and logo to the Verified Identity’s phone numbers for enhanced display to the end user. 

For a quick intro to RCD, how it enables mobile users to know exactly who is calling and why, and how it differs from traditional Caller ID (CNAM) technology check out our video: “Utilizing RCD Technology to Display Verified Brand Identity.”‍

“The ability to deliver RCD to mobile devices is a key tool in the battle against scammers as it increases consumer trust in knowing who is calling them and why. This proof-of-concept shows that by working together as an industry we can make sure that legal, critical, and wanted calls are delivered with a high level of consumer confidence.” – Abdul Saad, CTO of T-Mobile

A tremendous amount of effort across the proof of concept participants went into defining the roles across the group, architecting the validation processes and touch points, implementing the technology via multiple integrations, and successfully demonstrating the end-to-end proof of concept. As the verified call traveled across technology participants to terminate on a T-Mobile handset, the enhanced display demonstrated was thanks to First Orion’s RCD technology.

“Imagine a future where all phone calls will be delivered with RCD providing complete transparency and protection in every call for every consumer, enhancing the way businesses connect with their customers. Working with T-Mobile and other industry leaders to deliver this first-ever mobile call with RCD and authenticated Caller ID is an important step in making Enhanced Caller Identity a reality.” – Jeff Stalnaker, President and Founder of First Orion

Addressing the growing problem of lack of trust in answering unknown calls, or missed opportunities to connect due to call blocking or negative labeling across the wireless network, Numeracle was thrilled to collaborate across this group of technology providers on an actionable solution to make it more difficult for bad actors to access the network, and more effortless for trusted brands to connect with called parties.

“Extending an instantly recognizable, branded presence for enterprises verified through Numeracle’s Entity Identity Management platform is a tremendous step forward in returning trust to incoming calls. We look forward to continuing the success demonstrated within this proof of concept in returning control of brand presentation to the enterprise and improving ease of identity management within this complex ecosystem.” – Rebekah Johnson, Founder & CEO of Numeracle

For more details on the history-making call completed on T-Mobile’s voice network using First Orion technology, interfacing with Everbridge, NetNumber, Numeracle, and Twilio, check out the news release: https://www.t-mobile.com/news/business/t-mobile-and-partners-complete-first-ever-wireless-call-with-rich-call-data

To learn how to enhance your Verified Calling Identity via the RCD technologies made available through our branding partner network, check out our branded calling landing page, or contact Numeracle today.

On July 13, 2021, in a purported effort to protect consumers when Washington D.C.’s emergency covid protections expire, the D.C. Council approved a comprehensive debt collection bill to amend D.C. Code Section 28-3814 (Bill).  At the current juncture, the Bill is awaiting the D.C. mayor’s signature. 

If the Mayor chooses to sign it, it will go into effect immediately. Although it will only be effective temporarily as an emergency bill, it certainly has the potential to become a permanent piece of legislation. The Bill appears to cover far more than covid related items, and per the city council’s press release, the Bill is designed to update D.C.’s 50-year-old collection law.

Who it Covers:

The Bill defines “debt collection” as “any action, conduct or practice in connection with the collection of claims that are owed or due, or are alleged to be owed or due, to a seller or lender by a consumer.” Note that since the definition is not limited to debts owed to another person or entity, original creditors will be engaging in “debt collection” by attempting to collect their own debts.

The Bill defines “debt collector” as “a person engaging directly or indirectly in debt collection… .”  Reading these definitions together, all provisions in the Bill that address “debt collection” will apply to original creditors and traditional debt collection agencies.  The Bill also applies to debt buyers, which are considered “debt collectors” for all purposes within the Bill.

New Requirements:

Among other requirements, the Bill

• restricts phone calls to no more than three calls per 7 days to the consumer or any member of the consumer’s family or household (Note that this restriction is per consumer, not per account).

• Before collecting or attempting to collect a debt, the debt collector must have complete and authenticated documentation that the debt collector is the owner of the debt and the following documents:
  • The name of the original creditor and the current creditor or owner of the debt;
  • The debtor’s last account number with the original creditor;
  • A copy of the signed contract, application, or other documents that provide evidence of the consumer’s liability and the terms of the contract/account;
  • The date the debt was incurred;
  • The date and amount of the last payment;
  • An itemized accounting of the amount claimed to be owed, including principal interest, fees, charges, and whether the charges were imposed by the original creditor, a debt collector, or a subsequent owner of the debt; and
  • For credit card accounts, the itemized accounting shall include the last twenty-four months of statements.

• All of the above items must be provided to the consumer in writing within five days of the initial communication, and the debt collector shall cease all collection of the debt until it provides this information.

• For payment arrangements, the debt collector must provide a written copy of the arrangement or payment schedule to the consumer within seven days, and a consumer need not make a payment until this has been provided.

• Before commencing a legal action, the debt collector must undertake a reasonable investigation to verify the consumer’s current address for service of process.

• Any lawsuit to collect must include the signed contract, application, or other documents that provide evidence of the consumer liability and must include specific allegations.

• Before the entry of a default judgment, the collector must file
  • certain authenticated business records with the court,
  • a copy of the assignment establishing it is the owner of the debt,
  • each assignment if the debt has changed hands multiple times (if applicable),
  • for purchased debt, something showing the original account number tied to the consumer’s name.

• If a debt buyer fails to provide the above items, the action will be dismissed with prejudice

Provisions Related to Damages

• Punitive damages may be awarded for any willful violations

• A debt buyer that violates the new requirements will be liable to the consumer for the following:
  • Actual damages
  • Costs and reasonable attorney fees
  • punitive damages
  • if the consumer is an individual, an additional penalty in an amount not less than $500.00 per violation and not to exceed $4,000 per violation.

• In the case of a class action actual damages for each named plaintiff, plus court costs fees, and any other amount the court thinks is proper.

• If the plaintiff is the prevailing party in a debt collection action, then the plaintiff will be entitled to recover attorney fees if the contract or document evidencing indebtedness included a fee provision.

Other Changes and Notable Provisions:

• When the applicable statute of limitations expires, any subsequent payment will not extend the limitations period.

• A violation of the Fair Debt Collections Practices Act (FDCPA) will be considered a violation of the Bill.

• During a public health emergency and for 60 days after, there will be certain limitations on collections.

• The Bill does not apply to loans secured by real estate or direct motor vehicle installment loans.

The complete Bill can be found here.

insideARM Perspective:

Due to the classification of the Bill as an “emergency” measure, it required only one reading before going to the Mayor’s office for signature; there were no hearings on the Bill and no opportunity for comment. Regardless of however the D.C. Attorney General has described this Bill, with the ban on debt collection under the Covid Health emergency extended until at least October 8, 2021, it is unclear precisely what “emergency” this Bill was meant to correct. However, since it’s been two weeks since it was sent to the Mayor’s office and has not yet been signed, it seems maybe it wasn’t quite the same “emergency” for the D.C. Mayor.

That said, it is likely that the Bill will be signed, so accounts receivable entities collecting in D.C. should review the Bill in detail and ensure policies, procedures, training, and auditing are updated accordingly. Further, any time Bills like this surface, the accounts receivable industry should be concerned that other jurisdictions well copy these onerous provisions into proposed new legislation. Those who can put up a fight against this Bill are encouraged to do so.

ROCKVILLE, Md. — You’ve seen the winning demos, and now you get to see all of the demos that aired during the iA Strategy & Tech 2021 demo flights. No sales pitches or PowerPoints, and all under 8 minutes. And now, you have the same opportunity!  

1. Oliver CLX

Presented by Oliver Technology 

Oliver CLX transforms legal servicing by consolidating data, orchestrating collaboration, and accelerating litigation strategies on a cloud-based platform with unprecedented automation.  Oliver’s collections litigation platform provides complete oversight of your litigation process with built-in federal, state, local, and venue-specific laws, rules, and procedures. Simplifying litigation and increasing revenue with rigorous compliance.

2. Alvaria Compliance Hub

Presented by Alvaria (formerly Noble Systems)

Companies must abide by an increasingly complex number of compliance rules, and consumer preferences for their outbound outreach, and they need a single source where they can gather these rules and preferences so they can leverage them across all of their outreach channels so they can accomplish their outreach goals in an efficient and compliant manner. Avoid regulatory missteps and customer dissatisfaction using Alvaria’s Compliance Hub.

 [article_ad]

3. EXL PayMentor

Presented by EXL 

There are more ways than ever to contact customers. But which way is best for each? PayMentor by EXL helps you build effective and efficient contact strategies to get your consumers to the right outcome. PayMentor can help you reduce the days to pay on an account by allowing for customizable outreach campaigns.

4. Kredit

Presented by Kredit

Kredit provides a single digital interface that consumers can use to locate their accounts and message creditors, debt buyers, and collection agencies all in one place. By empowering consumers to initiate conversations, flexibly evaluate their repayment alternatives, and connect with resources that accelerate their decision-making ability, Kredit enables them to take the first steps in regaining financial control of their lives.

5. Symphony-AI

Presented by Katabat 

Symphony-AI is an easy-to-integrate virtual collector backed up by multi-channel campaign management. The virtual collector specializes in engagement with end customers and trying to encourage and help them to make payments. The two major goals are to enable customers to self-service and reduce payment friction while optimizing labor costs.

6. ProNotes

Presented by Prodigal

ProNotes looks to solve the challenges presented by agent wrap-up by listening to calls in real-time and summarizing the points of each conversation, like disclosures, customer hardships, and payment terms. Agents can then copy and paste the notes and submit them, saving time and increasing agent efficiency.

Who doesn’t like a good seesaw battle?

Just a few weeks ago we saw two cases that treated Facebook as if it were a non-issue–especially at the pleadings stage. 

But July 13, 2021, brought us the best post-Facebook decision yet. Quite the swing.

[article_ad]

In Barry v. Ally Fin., Case No. 20-12378, 2021 U.S. Dist. LEXIS 129573 (E.D. Mich.  July 13, 2021) the court granted a motion to dismiss a Telephone Consumer Protection Act (TCPA) Automatic Telephone Dialing System (ATDS) class action, finding that allegations of specifically-targeted calls necessarily prevent a finding of ATDS usage.

In Barry the Defendant allegedly called the Plaintiff looking to collect on her brother’s car loan. The Plaintiff argued that the Defendant had, nonetheless, used an ATDS because the system had the capacity to use an Random and Sequential Number Generator (R&SNG). She sought discovery on the subject and asked the court to deny the motion to dismiss on that basis.

The Court was not having it.

Unlike the gross Gross case, the Barry court determined that allegations of specifically-targeted calls necessarily terminate the ATDS inquiry. This is true because under the “clear holding” of Facebook it is the USE and not just the CAPACITY to use a R&SNG that matters:

In this case, Plaintiff does not dispute that Defendant’s autodialer system did not use a random or sequential number generator in connection with its calls to her (or to the purported class members). Rather, these calls were targeted at specific individuals in connection with specific accounts held by Defendant. That ends this case.

Booyah.

Absolutely wonderful.

And it gets better.

As to FN7, the Barry court adopts the Hufnus court’s analysis that FN7 only applies where the underlying list of numbers is, itself, generated randomly or sequentially:

Thus, the “preproduced list” of phone numbers referenced in the footnote was itself created through a random or sequential number generator….There has been no allegation that the pre-existing “stored” list of phone numbers in this case were “sequentially generated and stored.” Rather, Plaintiff pleads that the phone numbers called are specifically identified in connection with an account.

That’s just perfect.

So under Barry any targeted calls made using a predictive dialer are going to be treated as non-ATDS calls. And while that shouldn’t be an extraordinary outcome–I mean, that is pretty much what Facebook says after all–Barry is the first case to say it plain and simple.

I love plain and simple.

My hat is off to my friends over at Ally and their counsel. Nice win folks!

Putting Barry into the hopper, we can start to see ATDS jurisprudence take shape but it’s still too early to start making predictions about which courts are likely to approach Facebook in what way–especially at the pleadings stage. Still, every Defendant and caller should have Barry on the tip of their tongue when dealing with ATDS allegations.

Be sure to check the Facebook resource page for comprehensive coverage.

ROCKVILLE, Md.– At the iA Strategy and Tech Conference held July 13-15, 2021 The Estate Registry Presented by Phillips & Cohen Associates won best demo of the day 2 demo flights.

The Estate Registry offers three uniquely designed editions which, when combined, create a platform that accomplishes PCA’s mission of compassionately simplifying the complex process of probate estate management, Executor/administrator notification obligations and account resolution.

The Estate Registry’s “Notifier” solution will streamline and eliminate the potential cost and burden of this process for Estate Administrators (The Notifiers). TER’s Notifier offers a free, secure, online website that allows notifiers to enter all the decedent’s creditor information in one location and upload a death certificate, which will be sent to all known creditors on the notifier’s behalf. 

At the The “Notifier” can be co-branded by the Creditor and used as a bereavement tool. By sharing The Estate Registry with the next of kin of the deceased account holder, it will help to build a reputation as a compassionate organization with friends and family members in such a difficult time.

The Estate Registry’s “Creditor” solution will register, validate, and report the death to all known creditors on the notifier’s behalf.  In addition to removing time-consuming burdens from grieving family members, this solution enables creditors to organize their data in a more timely fashion, apply the appropriate strategy to each account, and assist Notifiers when they need it most.

Paul Fiumano, SVP , Global Data Services says of TER: “It’s been truly fulfilling to build The Estate Registry, I know in my heart it will make the lives of bereaved consumers easier at such a trying time.”

WILMONGTON, Del. — After years of behind-the-scenes development and over $1M invested, Phillips & Cohen Associates, Ltd., the globe’s leading deceased account care business, is thrilled to announce the expansion of its suite of services with the launch of the new proprietary platform, The Estate Registry (TER).

The Estate Registry, recently named one of the top two new tech solutions at the 2021 insideARM Strategy and Tech Conference, offers three uniquely designed editions which, when combined, create a platform that accomplishes PCA’s mission of compassionately simplifying the complex process of probate estate management, Executor/administrator notification obligations and account resolution.  PCA will launch TER’s Notifier, Creditor and Digital Lock Box editions in 2021:  Introduction to The Estate Registry

Identifying and notifying creditors of someone’s passing can be a daunting and burdensome task. The Estate Registry’s “Notifier” solution will streamline and eliminate the potential cost and burden of this process for Estate Administrators (The Notifiers). TER’s Notifier offers a free, secure, online website that allows notifiers to enter all the decedent’s creditor information in one location and upload a death certificate which will be sent to all known creditors on the notifier’s behalf.  The Notifier can be cobranded by the Creditor and used as a bereavement tool. By sharing The Estate Registry with the next of kin of the deceased account holder, it will help to build a reputation as a compassionate organization with friends and family members in such a difficult time.

The Estate Registry’s “Creditor” solution will register, validate, and report the death to all known creditors on the notifier’s behalf.  Specialists will follow each case and work with the notifier and creditors to ensure all steps in the process are completed for each account.  In addition to removing time-consuming burdens from grieving family members, this solution enables creditors to organize their data in a more timely fashion, apply the appropriate strategy to each account (whether a credit or debit balance), and assist Notifiers when they need it most.

To further simplify the notification process, TER’s Digital Lock Box (DLB) takes a proactive approach in organizing estate data by securely aggregating, digitally storing, and creating a centralized repository of a will holder’s creditor account information and passwords. This easy setup all takes place during the estate and will planning process, so at the unfortunate time of passing, the estate administrator’s responsibility of identifying and notifying the decedent’s creditors is simple and stress-free.  The DLB automatically populates the Notifier edition of TER.  Then, TER’s Creditor edition will provide the creditor with all the data points needed for their estate management team to expedite the resolution of the estate of the account holder who has passed.

Matthew Phillips, Co-Chairman/CEO commented, “Our 25 years’ experience in handling deceased accounts gives us a unique insight into the challenges faced by individuals in identifying and notifying creditors and dealing with the end of life administration of a loved one at a time when they are grieving.  And positions us as the The Estate Registry and Digital Lock Box are exciting innovations designed to address these complexities and improve the consumer experience at this most delicate of times.”

Adam S. Cohen, Co-Chairman/CEO added, “PCA’s global reputation has been built on helping people deal with end of life account administration in a compassionate manner and we see The Estate Registry Notifier, Creditor & Digital Lock Box as natural extensions of our services.  In this increasingly digitalized world, well built, and secure technology can simplify distressingly repetitive processes and we believe that this is every family’s prerogative.”

Paul Fiumano, SVP, Global Data Services stated, “It’s been truly fulfilling to build The Estate Registry, I know in my heart it will make the lives of bereaved consumers easier at such a trying time. I’m equally proud that while TER will prove to significantly streamline the estate resolution process for creditors, they can also demonstrate a new level of care and understanding with the decedent account holder’s love ones by utilizing TER as part of a compassionate bereavement strategy.”

About Phillips & Cohen Associates, Ltd.

Phillips & Cohen Associates, Ltd. is a specialty receivable management company providing customized services to creditors in a variety of unique market segments.  Phillips & Cohen Associates, Ltd is domestically headquartered in Wilmington, DE, with additional offices in Colorado and Florida as well as international offices in the UK, Canada, Spain, Germany and Australia.  For more information about Phillips & Cohen Associates visit www.phillips-cohen.com. PCA provides Equal Employment Opportunity for all individuals regardless of race, color, religion, gender, age, national origin, disability, marital status, sexual orientation, veteran status, genetic information and any other basis protected by federal, state or local laws.

ROCKVILLE, Md. —  At the iA Strategy and tech Conference which took place July 13-15 2021, DebtNext Platform Presented by DebtNext Software won best demo of the day 1 demo flight, and BEST IN SHOW.

The DebtNext platform is built to help you enforce the highest level of compliance and enhance your recoveries, interact with data vendors, and provide reporting on everything you need to know. DebtNext added new functionality in their platform to allow for compliance with the new CFPB requirements within Regulation F. 

 [article_ad]

Regulation F requires that the balance due be clearly defined from the itemization date, which is recognizable by the consumer. The balance must reflect principal, interest, fees, payments, and credits, and must be outlined for the consumer to review on the initial collection letter. DebtNext’s platform is configured to allow for proper calculation and storage of the consumer’s itemized balance, all through the collection lifecycle, and allows you to communicate that information to the consumer in a clear and concise manner.

Consumers have also taken control of how and when they are contacted. DebtNext’s communication consent management tool offers you the opportunity to track and manage preference at any medium level, including phone, text, email, social media, and written. Consent can be captured and updated in multiple ways, including via a third-party vendor, and can be passed down through the lifecycle of the account. 

These additions to the DebtNext platform allows for easy compliance with Regulation F and ensures a consumer-friendly environment for collections.

Paul Goske, President, DebtNext Software, says:

“We are extremely excited about being selected as the Best Demo at the iA Strategy & Tech Conference. It was as much a compliment to our clients and industry partners as it was to our team.  We rely heavily on their input and insight when we’re making enhancements to the DebtNext Platform.  Obviously, the CFPB regulatory changes are in the forefront of a changing landscape within the receivables management industry, and we feel as though our offerings put our clients in a very strong position to remain compliant in their recovery efforts.”

Almost immediately after the 11^th Circuit Court of Appeals published its decision in Hunstein vs. Preferred Collection & Management Services, Inc, 994 F.3d 1341 (11th Cir. 2021), opportunistic attorneys began filing copy-cat cases nationwide. Suddenly, overnight, the well-known and long-accepted practice of sending data to a letter vendor for printing morphed from a non-issue into the most egregious of consumer harms. Certain wily attorneys collectively gasped, clutched their pearls, and started serial filing lawsuits to right this newly discovered wrong.

[article_ad]

Well- it seems the Eastern District of New York (EDNY) has had enough. On July 23, 2021, Judge Gary Brown in the EDNY issued a memorandum and order dismissing six Hunstein copy-cat cases. Like all Hunstein copy-cat cases, the lawsuits alleged debt collectors violated the Fair Debt Collections Practices Act (FDCPA) by providing data to mailing vendors.

The July 23rd order begins by including a robust recitation of cases wherein the EDNY addressed abuses of the FDCPA.  In fact, over three full pages of the barely fourteen-page order were dedicated to discussing cases that held in one form or another that the FDCPA was “abused and perverted into money-making vehicles for individuals and lawyers.”  Although the order did not state the six dismissed cases were necessarily abusive, the implication is clear.

Upon concluding its recitation of the abusive FDCPA filings in the EDNY, the memorandum next turned to recent developments in the law: specifically the Supreme Court’s recent ruling in TransUnion v. Ramirez, 594 U.S. ____ (2021).

Background: The TransUnion Decision:

In Transunion, the class of potential plaintiffs alleged, among other causes of action, that TransUnion violated the Fair Credit Reporting Act (FCRA) by failing to follow reasonable procedures, which ultimately resulted in the addition of alerts to credit files that erroneously labeled consumers as potential terrorists. While all potential class members had the terrorist label included in their credit files, many could not demonstrate that the inaccurate information (i.e., the terrorist alert) in their credit files was distributed to a third party.

Ultimately, the Supreme Court held that though credit report inaccuracies may be a procedural violation of the FCRA, the consumers who could not demonstrate the inaccurate information was shared with a third party lacked standing to maintain their claims in federal court. In reaching this conclusion, the Court reasoned that regardless of the potential for future harm, “bare procedural violations, divorced from any concrete harm…do[] not suffice for Article III standing.” 

Additionally, in footnote 6 of the TransUnion decision, the Court rejected the consumer’s theory that TransUnion “published” information internally and to vendors, explicitly stating, American courts “have [not] necessarily recognized disclosures to printing vendors as actionable publications.” 

Applicability of the TransUnion Decision to the EDNY Cases:

In his analysis, Judge Brown noted that while instructive, Hunstein (an 11^th Circuit Court of Appeals case) is not binding on the EDNY. Further illustrating his position on the matter, before turning to the facts of the EDNY cases, he stated unequivocally, “the Supreme Court’s decision in TransUnion casts significant doubt on the viability of Hunstein.”

The analysis and ultimate dismissal of the EDNY cases had three main components. First, Judge Brown found that on its face, footnote 6 of the TransUnion decision appears dispositive of the mail vendor cause of action advanced by the EDNY plaintiffs. Second, the EDNY plaintiffs alleged only potential future harm caused by the mailing vendor. Since the Supreme Court was clear that the risk of future harm is insufficient for standing, the EDNY plaintiffs’ claims were likewise insufficient.

Third, the facts of the EDNY cases distinguish them from cases in which a plaintiff can plausibly demonstrate an injury-in-fact sufficient for Article III standing.  Specifically, unlike the spurious false information provided to third parties (erroneously branding class members as terrorists), the EDNY cases involve debts between $25.00 and $482.28. Per Judge Brown,

“the attempts to analogize [these cases] to the harms alleged to a traditional tort simply fail. For example, using the defamation analysis applied in TransUnion, it seems untenable that the possible non-payment of a relatively small invoice could constitute ‘a defamatory statement that would subject plaintiffs to hatred, contempt, or ridicule’, particularly when such information is shared only with a mailing vendor.” 

Finally, the [EDNY] plaintiffs could not invoke the common law tort of intentional infliction of emotional distress “because simply mailing a collection letter, even if erroneous, is a far cry from ‘extreme and outrageous conduct.” 

The complete memorandum and order can be found here. 

insideARM Perspective:

When the Transunion opinion was published, counsel for the defendant in Hunstein immediately notified the 11^th Circuit of the decision and its potential impact on Hunstein. Rumor has it that some of the more opportunistic consumer attorneys scoffed, claiming that nothing in the TransUnion opinion would affect Hunstein. This order from the EDNY, particularly its reliance on footnote 6 of the TransUnion decision, signals otherwise. Although this memorandum and order might not change the post-Hunstein landscape overnight, it may provide a basis to continue to persuade other courts (particularly those outside the 11^th Circuit) that the Hunstein court misapplied the law.

Another note of caution: be careful what you wish for. Dismissal from a federal court for lack of Article III standing doesn’t mean it can’t be filed in state court. Time will tell if that’s where these cases go. It seems the only way to truly be rid of the nonsensical decision that we know as Hunstein will be if the 11^th Circuit Court of Appeals grants the debt collector’s petition for rehearing en banc.