Archives for September 2021

On
September 20, 2021, the CFPB issued a press
release announcing it filed suit against a California-based software
company, Credit Repair Cloud (Cloud), and its owner, Daniel Rosen, for allegedly
assisting illegal credit repair businesses. The CFPB alleges that Cloud and Mr.
Rosen violated the Telemarketing Sale Rule (TSR) and the Consumer Financial
Protection Act of 2010 (CFPA) by providing substantial assistance, including training,
materials, and software to credit-repair companies that use telemarketing to
reach consumers and charge unlawful advance fees. 

The TSR prohibits
credit-repair businesses that telemarket their service from requesting or
receiving any fee until they have provided the consumer with a credit report that
is over six months old and shows the desired results. The CFPA prohibits any covered person from offering
or providing a consumer a financial product or service that does not conform to
federal consumer financial law.

Against this
backdrop, based on advertising materials, Cloud’s
website, Mr. Rosen’s podcast, and social media accounts maintained by Cloud and
Mr. Rosen, among other allegations, the lawsuit alleges that Cloud: 

• Offers an all-in-one solution to start and run a credit repair business, on the basis that only a computer, phone, and the software are needed.

• Provides over 100 template-dispute letters that the software automatically pre-populates with consumer information and templates for Cloud clients to supply to consumers.

• Provides training on starting and running a credit repair business, including telemarketing, sales scripts, template marketing materials, and template websites.

• Lays out steps for disputing negative items on credit reports and encouraging charging consumers a monthly fee.

• Provides information to users via social media and hosting an annual credit repair conference.

• Encourages the use of telemarking to sell credit repair services and provided sales scripts for these calls.

• Encourages and advises users to charge consumers at enrollment with subsequent monthly fees, including an FAQ that states charging fees upfront is how all credit repair companies get paid.

• Provides a billing platform that allows users to charge an upfront fee and encourages users to sign up for this platform.

The CFPB seeks relief for harmed consumers from the defendants,
disgorgement of their unjust gains, an injunction to stop their (allegedly) illegal
conduct, and civil penalties. Per Acting Director David Uejio, “Credit Repair Cloud and
Rosen have been breaking the law. They are actively assisting credit-repair
businesses in violating federal consumer protection laws. They facilitated and
encouraged credit-repair businesses to charge illegal advance fees, causing
broader consumer harm in the marketplace. The CFPB will not tolerate companies
facilitating and profiting from other companies’ violations of federal consumer
protection laws.”

insideARM
Perspective:

Although many
in the accounts receivable management industry know how harmful some credit
repair companies can be for consumers, it still might be a shock that the CFPB
chose to pursue a software company for violations of the TSA and CFPA. After all, software companies typically provide
a platform, and the end-user typically decides how to use it. 

It’s
important to note here that most of the allegations from the CFPB’s complaint
came from publicly available resources: Cloud’s website, Mr. Rosen’s podcast,
and a Facebook page on which Mr. Rosen provides advice and frequently comments.
If the allegations are true, the CFPB’s complaint indicates Cloud is no typical
software company, nor is Mr. Rosen a typical software company owner.  Instead, the allegations suggest that Cloud
and Mr. Rosen actively trained and encouraged their clients to violate consumer
protection laws. 

It
seems that instead of pursuing the credit repair companies using Cloud’s software (at least for now), the CFPB is going after what it perceives is the root of the problem- the software company.  Time will tell whether the CFPB will use this approach in other areas.

MCLEAN, Va. — Numeracle™ Inc.
(“Numeracle”), the pioneer of Verified Identity™ for communications, today
announced the collaborative success of a partner initiative with Avantive
Solutions (“Avantive”) to enhance the customer engagement and performance of
outbound business calls utilizing Verified Calls by Google.

Numeracle’s Entity Identity
Management™ (“EIM”) platform enables service and technology platform providers,
business process outsourcing (“BPO”) organizations, and contact centers to
manage brand identity on behalf of enterprise clients for the purpose of
business communications. This platform is also used to manage approval of
branded Rich Call Data (“RCD”) assets associated with customer communications,
such as brand name, brand logo, and call reason for the purpose of extending
these assets to branded calling services, such as Verified Calls by Google.

“Millions of consumers are called by
businesses every day, but most of us don’t have the confidence to answer unless
we recognize the caller,” said John Shirley, Partnerships Development –
Business Communications, Google. “Verified Calls by Google aims to solve the
problem of missed business calls and lack of consumer trust by showing the
caller’s name, brand logo, and reason for calling, plus a verification symbol,
confirming the identity of the caller in real-time.”

To utilize RCD technology to improve
live connect rate and call back metrics associated with a well-known
business-to-consumer brand, Avantive Solutions completed integration with Verified
Calls through Numeracle’s EIM platform and monitored key performance indicators
(“KPIs”) for a period of 120 days across called parties using Google Pixel and
eligible Android devices.

“We’re extremely impressed by the
results we’ve seen within the initial launch period,” said Frank Pettinato,
CEO, Avantive Solutions. “Across reachable devices, we recorded a 26% increase
in conversation rate, increased call backs, increased sales efficiencies, and
an overall decrease in cost per sale by 15%. The presentation of the brand name
and logo also improved customer experience and loyalty metrics, demonstrating
the addition of branding set the call up for greater success.”

“We recognize consumer choice
defines the preferred applications and devices used by consumers to
communicate,” said Anis Jaffer, Chief Product Officer, Numeracle. “By
integrating Verified Calls into our EIM platform, we are eager to continue the
momentum led by Avantive Solutions to deliver this leading-edge technology to
more brands as well as extend additional Google products, such as Verified SMS
and RCS Business Messaging, via one unified platform.”

For more information on Verified
Calls visit: https://www.numeracle.com/verified-calls-by-google. To learn how to leverage Verified Calls to
enhance your customer campaigns, contact Numeracle at https://numeracle.com/contact
or Avantive Solutions at https://avantivesolutions.com/contact-us.

About Avantive Solutions

Avantive Solutions,
founded in 1988, is a Purpose-Driven global technology and business services
company specializing in innovative customer engagement, strategic sales and
robust digital marketing solutions. The Company’s Omni-Touch™ platform provides
actionable insights through a proprietary stack of cloud-based analytics,
machine learning and artificial intelligence technology. Avantive Solutions
partners with world-respected brands including Fortune 100 companies in the
fast-growing tech and communications, financial services and healthcare
industries. To learn more about how Avantive Solutions is bringing purpose to
customer experience, go to avantivesolutions.com.

About Numeracle

Numeracle’s Entity
Identity Management™ (EIM) and Verified Identity™ platform empower the delivery
of legal, wanted communications. By working with technology providers,
carriers, device manufacturers, analytics companies, and others, we provide
visibility, control, and management across the major stakeholders influencing
communications delivery to give businesses control over their brand’s identity.
Core competencies include prevention and management of improper blocking and
labeling, KYC-based entity verification and credentialing for STIR/SHAKEN, and
branded communications through rich call data (RCD). To learn more, visit www.numeracle.com.

MADISON,
Wis. — State is pleased to announce Sameer Maini as its Chief Information
Officer. He joins the company’s Executive Team with the goal of increasing
recoveries and patient satisfaction for State’s clients through technology
initiatives designed to improve and modernize the patient financial experience.

“It’s not
every day you find a talented IT leader with industry knowledge, experience and
success. Sameer offers a 20-year proven track record with high-growth ARM
organizations,” said Tim Haag, State’s president. “His vision for the future of
healthcare receivables aligns with my vision and the entire State leadership
team. I am truly excited to collaborate with him to provide even greater
service to our clients.”

With more
than 20 years of IT leadership experience with high-growth ARM organizations,
Maini has previously led efforts to leverage Ai/Machine Learning, including
building a world-class application enabling digital consumer communication. His
expertise also includes managing a large IT infrastructure and improving
internal IT-related processes and systems. He will collaborate closely with
Chief Technology Officer Jim Warner and the other members of the State team, as
well as its client base of more than 400 leading healthcare providers
nationwide.

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“I am
looking forward to further developing State’s technology to create an even
better patient experience and drive improved recoveries,” said Maini. “State is
already achieving tremendous growth and success. I believe that together we can
build upon its strengths to create an even better platform to serve our
nation’s healthcare providers.”

Maini
resides with his family in the Seattle area.

About State
State improves the
financial picture for healthcare providers by delivering increased financial
results while ensuring a positive patient experience. Rooted in a tradition of
ethics, integrity and innovation since 1949, State uses data analytics to drive
performance and speech analytics with ongoing training to ensure patient
satisfaction. A family-owned company now in its third generation of leadership,
State assists healthcare organizations with services spanning the complete
revenue cycle including Pre-Service Financial Clearance, Early Out Self-Pay
Resolution, Insurance Follow-Up and Bad Debt Collection. To learn more visit: www.statecollectionservice.com.

The Sixth Circuit recently reversed a trial court’s dismissal of
a putative class action lawsuit alleging violations of the federal Telephone
Consumer Protection Act, 47 U.S.C. § 227(b) (TCPA).

The
trial court dismissed the case on the basis that amendments to the TCPA in 2015
rendered the entire Act unconstitutional until the Supreme Court of the United
States severed the 2015 amendments in Barr v. Am. Ass’n of Pol.
Consultants, Inc., 140 S. Ct. 2335 (2020) (AAPC). 
This would have made any alleged TCPA violation not actionable from the date of
the amendments in 2015 until the SCOTUS severed the unconstitutional provisions
in 2020.

In
reversing the trial court’s ruling, the Sixth Circuit held that AAPC applied
retroactively, and the TCPA was not invalidated by the 2015 unconstitutional
amendments and before the date of the AAPC ruling. 
In addition, the Sixth Circuit rejected the defendant’s First Amendment
arguments based on the retroactive application of AAPC.

A
copy of the opinion in Lindenbaum v. Realgy, LLC is
available at:  Link to Opinion.

As
you may recall, the TCPA prohibits many automated calls to cell phones and
landlines.  In 2015, Congress amended the TCPA to allow robocalls if they
were made “solely to collect a debt owed to or guaranteed by the United
States.” 47 U.S.C. § 227(b)(1)(A)(iii), (b)(1)(B).

However,
the Supreme Court of the United States held in Barr v. Am. Ass’n of Pol.
Consultants, Inc. (AAPC), 140 S. Ct. 2335 (2020), that “adding the
exemption for government-debt robocalls would cause impermissible content
discrimination” in violation of the First Amendment to the United States
Constitution, and that “the exception was severable from the rest of the
restriction, leaving the general prohibition intact.” 

The
plaintiff here received alleged non-consensual automated calls from the
defendant in late 2019 and early 2020, and filed a putative class action
lawsuit in federal court under the TCPA.  The defendant moved to dismiss
for lack of subject matter jurisdiction.  The trial court granted the
defendant’s motion.

The
trial court held that “severability is a remedy that operates only
prospectively,” and that the amended TCPA “was unconstitutional and therefore
void for the period the exception was on the books” from 2015 to 2020. 
Therefore, the trial court held, the TCPA “could not provide a basis for
federal-question jurisdiction.”

The
plaintiff appealed, and the United States intervened in support of the
plaintiff to defend the TCPA.

On
appeal, the Sixth Circuit first noted that the motion to dismiss for lack of
subject matter jurisdiction should have been treated as a motion to dismiss for
failure to state a claim.  The Sixth Circuit explained that a trial court
has jurisdiction when “the right of the petitioners to recover under their
complaint will be sustained if the Constitution and laws of the United States
are given one construction and will be defeated if they are given another.”
Here, if the plaintiff’s “arguments about the continuing vitality of the [TCPA]
from 2015 to 2020 are correct, she is entitled to relief.”

The
Sixth Circuit then addressed the defendant’s arguments.

The
defendant first argued that “severability is a remedy that fixes an
unconstitutional statute, such that it can only apply prospectively.” 
Because the SCOTUS ruling in AAPC severed the
unconstitutional 2015 amendment from the TCPA, the defendant argued that the
amended TCPA was wholly unconstitutional from the date of the amendments in
2015 until the SCOTUS severed the unconstitutional provisions in 2020.

The
Sixth Circuit disagreed, holding that the SCOTUS in AAPC “recognized
only that the Constitution had ‘automatically displace[d]’ the
government-debt-collector exception from the start, then interpreted what the
statute has always meant in its absence,” and that the SCOTUS’ “legal
determination applies retroactively.”

The
Court explained that, in order “to say what the law is,” courts “must exercise
the negative power to disregard an unconstitutional enactment.” Then, “[a]fter
disregarding unconstitutional enactments, we then determine what (if anything)
the statute means in their absence — what is now called ‘severability’
analysis.”  However, the Sixth Circuit continued, “those steps are all
part of explaining what the statute has meant continuously since the date when
it became law and applying that meaning to the parties before us.”

Relevant
here, the Sixth Circuit noted that “the Constitution itself displaces unconstitutional
enactments: a legislative act contrary to the constitution is not law at
all.”  Because the 2015 amendments were unconstitutional, and therefore
“not law at all”, the Court concluded that the remainder of the TCPA stayed in
full force as if the 2015 amendments were never enacted.

The
defendant also argued that “if it can be held liable for the period from 2015
to 2020, but government-debt collectors who lacked fair notice of the
unlawfulness of their actions cannot, it would recreate the same First
Amendment violation the Court recognized in AAPC.”

The
Sixth Circuit disagreed again, noting that “[w]hether a debt collector had fair
notice that it faced punishment for making robocalls turns on whether it
reasonably believed that the statute expressly permitted its conduct. That, in
turn, will likely depend in part on whether the debt collector used robocalls
to collect government debt or non-government debt.” 

Because
the defendant here was not collecting on government debt, which was the subject
of now unconstitutional 2015 amendments, the Sixth Circuit held that “applying
the speech-neutral fair-notice defense in the speech context does not transform
it into a speech restriction.”

Accordingly,
the Sixth Circuit reversed the trial court’s dismissal, and the case was
remanded for further proceedings.

District of Columbia — At an open Commission
meeting on September 15, 2021, the Federal Trade Commission voted to make
significant changes to enhance public participation in the agency’s rulemaking, a
significant step to increase public participation and accountability around the
work of the FTC.

The Commission
approved a series of changes to the FTC’s Rules of Practice designed to make it
easier for members of the public to petition the agency for new rules or
changes to existing rules that are administered by the FTC. The changes are a
key part of the work of opening the FTC’s regulatory processes to public input
and scrutiny. This is a departure from the previous practice, under which the
Commission had no obligation to respond to or otherwise address petitions for
agency action.

“Guarding against
insularity is a constant challenge for virtually all federal agencies, and
ensuring that the FTC is accessible even to those who lack well-heeled counsel
or personal connections is essential to our institutional credibility,” said
Chair Lina M. Khan. “Congress granted the FTC the power to issue rules,
equipping us with a vital tool to protect the public from harmful business
practices. Interested members of the public will be able to petition the FTC to
invoke its rulemaking and other authorities to advance its mission.” 

The updates to the
Rules of Practice make a number of changes designed to clarify the process of
submitting petitions to the FTC while also adding more opportunities for public
input and accountability in the Commission’s response to the petitions it
receives.

Among the changes are:

• More clarity for those seeking to file petitions
  related to rulemaking with regard to information that is required with
  submissions, as well as guidance on the data that can be helpful to the
  Commission in evaluation petitions.
• A new requirement that the Commission publish all
  petitions for rulemaking that it receives in the Federal Register and
  solicit public comment about those petitions.
• A new requirement that the Commission provide
  petitioners with a specific point of contact in the agency, and that the
  Commission provide a response to petitioners on its decision to either act
  on or deny the petition.

In addition to formal
rulemaking, the new changes will also apply to requests by certain parties for
special exemption from FTC rules, as well as petitions related to industry
guidance issued by the Commission.

The Commission vote to
approve the changes to the Rules of Practice and other related rules and to
publish the changes in the Federal Register was 4-1, with Commissioner
Christine S. Wilson voting no. Chair Khan issued a separate statement. Commissioner Rohit
Chopra also issued a separate statement.

The Federal Trade
Commission works to promote competition, and protect and educate consumers. You can learn more
about consumer topics and file a consumer
complaint online or by calling 1-877-FTC-HELP (382-4357). For
the latest news and resources, follow
the FTC on social media, subscribe
to press releases and read our blogs.

The press release can be found here. 

USAA is crushing it. And Aspect is on a roll.

The duo already
combined for what was one of the best Automatic Telephone Dialing Systems (ATDS) decision to date in Timms, but their latest win is
even better.

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How about the
first true victory for a predictive dialer post-Facebook on
full evidence and overcoming the force of a Snyder expert report, a well-made Footnote 7 (FN7) argument and a capacity
challenge?

(Isn’t it funny
how TCPAWorld denizens know exactly what
my rhetorical question signifies and everyone else thinks I’m speaking in code.
hahaha)

But there’s a
really important nuance to this case– USAA’s big win could be a big LOSS for
you, if you’re not careful.

Here we go.

In Grome v. Usaa Sav. Bank, 4:19-CV-3080,
2021 U.S. Dist. LEXIS 164255 (D. Ne. August 31, 2021) the Plaintiff alleged
USAA made unwanted calls to her cell phone to collect a credit card debt.

USAA moved for
summary judgment arguing that the system it used–the popular Aspect UIP with
ALM–was not an ATDS post-Facebook since
it did not use a Random and Sequential Number generator (R&SNG).

The Plaintiff
countered with an expert report by Randall Snyder–amazing he’s still around,
although he probably thinks the same thing about me–pointing out that the SQL
environment used by USAA can, in fact, generate random numbers. Plaintiff also
argued that the sequence of dialing is what matters–not whether phone numbers
are generated randomly–and argued that the “capacity” of the system is critical–not
how specific calls were placed.

In other words,
this was the grand enchilada for Aspect and USAA. And they ate the whole thing.
With green sauce.

First, the Court
found that the whole “SQL can generate numbers” thing was nonsense.

It’s undisputed that USAA Aspect UIP did
not use those commands.

And that’s about
the end of the needed analysis in the Court’s view.

Next, the Court
actually accepted the Plaintiff’s FN7 argument–really
important to catch this nuance folks–but found that even though a
system CAN be an ATDS if it uses an R&SNG to determine dialing sequence
USAA’s system did not do that: “it is undisputed that the Aspect UIP was not
using a random number generator to determine the order in which to pick phone
numbers.”

See that
critical finding? Plaintiff apparently made a FN7 argument–to a willing
listener–but couldn’t see the issue through with evidence that USAA was
actually using a R&SNG to determine dialing sequence. So this case is different from Hufnus–that
case held that only randomly generated numbers trip FN7–and don’t let anyone
tell you otherwise.

Rather than
focus on FN7 paydirt, Plaintiff retreated to the common argument we saw before Facebook. You can force feed random
numbers into Aspect. So it must be an ATDS.

*Yawn*

The Court had no
interest in this garbage argument: “[t]he Court is unwilling to adopt such an
expansive view of the statutory definition of the autodialer.”

To support its
interpretation of ATDS the Court took the “capacity” issue head on and held
that only present configured capacity
matters– not future capacity. So while Plaintiff argued (for some reason) that
the system could be configured to force generate random numbers to be dialed
the Court took a common sense view–USAA was not doing anything of the sort, so
it was not using an ATDS.

Again this is a
huge and great victory for Aspect and USAA but PLEASE PLEASE PLEASE do not miss
the FN7 angle here. This is the first case that actually seemingly accepts the
Plaintiff bar’s viewpoint on FN7. The Plaintiff here just didn’t see it through
and focused on the goofy “I can feed random numbers into the dialer” angle
instead. Had they come with evidence directly on dialing
sequence this case might have had a different outcome. So be
cautious, even while raising a glass of champagne in USAA/Aspect’s honor.

Also keep in
mind that different courts may take a different view of “capacity.” This case
was out of Nebraska. Not sure a court in California or Washington would come to
the same view. Again, be cautious. 

We’ll keep an
eye on this.

PITTSBURGH, Pa. — On September 1st, 2021, the City of
Pittsburgh Pennsylvania, Department of Finance, officially launched CSS IMPACT
Financial Cloud as their new Enterprise Business Tax Management Financial
Ecosystem. CSS, Inc., the developers of “IMPACT | HD 2.0” is the leading
provider of “NextGen” Cloud Financial & Debt Collection Ecosystems with a
focus on machine learning Artificial Intelligence, delivering Fintech “AI”
driven Business Process Automation solutions & frictionless Omni-Chanel
Digital Consumer Engagement systems.

“The City’s successful transition &
implementation of our new Enterprise Business Tax Management Ecosystem CSS “IMPACT
HD 2.0” now enables the city to automate multiple crucial business processes,
centralize & digitize all tax submissions increasing the City’s ability to
track unpaid taxes more efficiently. This entire project will translate into a
substantial increase in tax collection revenues, enabling the City’s resources
to focus on compliance enforcement while reducing time on billing activities.
We are proud of the work we have accomplished to bring this project live and
are excited for the future using the IMPACT HD 2.0 Financial Ecosystem,” said Nereida
Polanco, Department of Finance Operations Manager for the City of Pittsburgh.

“The City’s successful launch of CSS’s cloud-based Enterprise
Tax Management Financial Ecosystem speaks to the City’s uncompromising
commitment to their citizens by employing scalable new digital forward technologies,
such as CSS’s NextGen Financial
Ecosystem, to better serve their taxpayers. The City of Pittsburgh is rapidly
becoming recognized as one of the leading technology adopters in the nation for
today’s ever-changing digital world. We are extremely excited for this partnership & look forward to a
long-term relationship with the City of Pittsburgh,” said Carl A. Briganti,
President of CSS, Inc.

To learn more about how municipalities are leveraging
CSS’s Cloud Tax Management Financial Ecosystem, please visit taxecosystems.com
or download entire brochure at brochure.taxecosystems.com.

To learn more about how companies in the financial
services sector are leveraging CSS’s Cloud Financial Ecosystems, please visit financialecosystems.com
or download brochure.financialecosystems.com.