Archives for January 2022

On January 13, 2022, the CFPB released a bulletin to remind debt collectors of their obligations under the No Surprises Act, which protects consumers from certain unexpected medical bills. The bulletin reminds companies that if they attempt to collect on prohibited debts, they face potential liability under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). 

The No Surprises Act protects participants, beneficiaries, and enrollees in group health plans and group and individual health insurance coverage from surprise medical bills associated with certain emergency services, non-emergency services from non-participating providers, and air ambulance services. It also requires certain healthcare facilities to disclose Federal and State patent protections against balance billing and includes protections for uninsured (or self-pay) individuals. 

“Too many Americans have been shocked by surprise medical bills and forced to pay up through credit report coercion,” said CFPB Director Rohit Chopra. “Our action today should serve as a reminder not to collect on or furnish credit reporting information about invalid medical debt.”

“The No Surprises Act is the most critical consumer protection law since the Affordable Care Act,” said Health and Human Services (HHS) Secretary Xavier Becerra. “After years of bipartisan effort, we are finally providing hardworking Americans with the federal guardrails needed to shield them from surprise medical bills. We are taking patients out of the middle of the food fight between insurers and providers and ensuring they aren’t met with eye-popping, bankruptcy-inducing medical bills. This is the right thing to do, and it supports President Biden’s vision of creating a more transparent, competitive and fair health care system.”

The bulletin includes the following reminders to debt collectors, information furnishers, and credit bureaus: 

• Attempting to collect a debt stemming from a charge that exceeds the amount permitted by the No Surprises Act, would violate the FDCPA’s prohibition of misrepresenting the character, amount, or legal status of any debt. In addition, debt collectors are also prohibited from using unfair or unconscionable means to collect or attempt to collect any debt, including the collection of any amount unless such amount is expressly authorized by the agreement creating the debt or permitted by law. Courts have emphasized that collecting an amount that exceeds what is owed would violate the prohibition on unfair or unconscionable debt collection practices.

• Many debt collectors furnish information about unpaid medical debts to credit bureaus. Furnishers must have reasonable written policies and procedures regarding the accuracy and integrity of consumer information provided to credit bureaus. Credit bureaus preparing a consumer report must follow reasonable procedures to assure the maximum possible accuracy of information contained in the consumer report. Both credit bureaus and furnishers must conduct reasonable and timely investigations of consumer disputes to verify the accuracy of consumer information.

• For furnishers and credit bureaus, the accuracy and dispute obligations imposed by federal consumer financial protection law apply with respect to debts stemming from charges that exceed the amount permitted by the No Surprises Act.

The No Surprises Act can be found here, on page 1577. 

On December 31, 2021, New York Governor Hochul signed into law S5724-A which
reduces the annual rate of interest on judgments arising out of a consumer debt
where the defendant is a natural person from 9% to 2%.  The laws take
effect 120 days from the Governor’s signature, which is April 30, 2022.

For purposes of the rate limitation, the new law defines
“consumer debt” as “any obligation or alleged obligation of any natural person
to pay money arising out of a transaction in which the money, property,
insurance or services which are the subject of the transaction are primarily
for personal, family or household purposes, whether or not such obligation has
been reduced to judgment, including, but not limited to, a consumer credit
transaction, as defined in subdivision (f) of section one hundred five of this
chapter.”

The definition of “consumer credit transaction” in Section
105(f) is “a transaction wherein credit is extended to an individual and the
money, property, or service which is the subject of the transaction is
primarily for personal, family or household purposes.”

Most notably, the reduced rate will apply not only to judgments
entered on or after the new law’s effective date but will also apply to any
portion of a judgment entered before the effective date that is unpaid as of
the effective date.

The U.S. Court of Appeals for the 11th Circuit has scheduled the oral argument for the rehearing en banc in Hunstein vs. Preferred Collection & Management Services, Inc. for February 22, 2022 (en banc means the full panel of 11th Circuit Judges will hear the matter).  The order setting oral argument follows the November 23, 2021 Order in which the Court instructed counsel to focus their briefs on one issue: Does Mr. Hunstein have Article III standing to bring this lawsuit?

A Brief History:

In 2019, the Middle District of Florida dismissed Mr. Hunstein’s case for the failure to state a claim. On Appeal, the Eleventh Circuit held that transmitting data to a mail vendor is an unauthorized third-party disclosure.  In May 2021, the debt collector defendant, Preferred Collection & Management Services, Inc (Preferred), filed a petition for rehearing en banc. In late May and June 2021, parties with an interest in the outcome, including the Consumer Relations Consortium, filed amicus briefs to ensure all the legal issues surrounding the case were presented to the Eleventh Circuit. 

Later in June 2021, the Supreme Court issued its order in TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2204 (2021), which held “no concrete harm, no standing”.  Preferred immediately filed a notice of supplemental authority arguing that the Transunion opinion supported Preferred’s request for rehearing en banc.  In October 2021, the three-judge panel which issued the April 2021 Hunstein opinion issued a substitute opinion to take the place of its original opinion.  

Although the substitute opinion reached the same result, one of the three judges broke from the other two and included a scathing dissent. On November 17, 2021 the Eleventh Circuit Court of Appeals sua sponte vacated its opinion in Hunstein and set the matter for rehearing en banc (sua sponte means on its own, without prompting). 

insideARM Perspective

This case seems to have touched just about every aspect of the ARM industry. It’s has provided a boon to consumer attorneys, while offering no real additional protection for consumers. Whether a ruling on the standing issue will change any of the issues remains to be seen. At the very least, the case is moving along and maybe that means there is some relief on the horizon… or maybe not.  We’ll continue to provide updates as we have them. 

Despite the national
and global events that took center stage in 2021, the upward trend in data
privacy legislation at the state level continued and with the addition of the
amendments to the Safeguards Rule, 2022 brings new compliance challenges for
many businesses and financial institutions.

According
to the National Conference of State Legislatures, “[a]t least
38 states introduced more than 160 consumer privacy-related bills in 2021
(compared to 30 states in 2020 and
25 in 2019).”

[article_ad]

Many
of these bills were limited in scope, relating to, for example, biometric,
genetic and geolocation data, data brokers, internet service providers, and
more.

Comprehensive Consumer Data Privacy
Legislation – By the Numbers

The
following chart shows 23 states that introduced a total of 34 comprehensive
consumer data privacy bills in 2021.  This is legislation that restricts
the use of personal information and conveys certain rights to consumers,
similar to what is found in the California Consumer Privacy Act (CCPA) and the
EU’s General Data Protection Regulation.

Some of the key provisions that are commonly tracked include consumer rights, exemptions and exclusions from coverage, contractual and security standards, and whether there is a private right of action.  The following chart shows the prevalence of those provisions in the 2021 legislation.

A detailed spreadsheet showing the provisions that were included in specific bills can be found here.

New State Privacy Laws – Virginia and Colorado.

The Virginia Consumer Data Protection Act was signed into law on March 2, 2021, and not long after, on July 6, the Colorado Privacy Act became law.  They become effective Jan. 1, 2023, and July 1, 2023, respectively.

Although there are some differences worth attention, these laws are strikingly similar and include:

• Right to access
• Right to correct
• Right to delete
• Right to obtain
• Right to opt-out of processing
• Right to appeal a refused request
• Opt-in requirement for processing sensitive data
• Requirements for contracts between controllers and processors
• Risk assessments for processing certain data
• Entity-level Gramm-Leach-Bliley Act exemption
• No private right of action

There are limitations that apply to consumers’ rights as well as exceptions to complying with their requests, and these laws are generally perceived as industry friendly.

Gramm-Leach Bliley Act Safeguards Rule

The Federal Trade Commission issued a final rule that amends the Safeguards Rule (the “Rule”), effective Jan. 10, 2022. 

The Rule places requirements on “financial institutions” regarding information security programs and the use of customer information and is applicable to debt collectors and certain debt buyers, among others. The amended rule notably expands the “financial institution” definition and many businesses will now find themselves subject to it.

The amendments include:

1. Detailed requirements for an information security program;
2. New requirements for accountability, such as designation of a single “Qualified Individual”;
3. An exemption from written risk assessments, incident response plans and annual reporting for certain small businesses;
4. An expansion of the definition of “financial institution”; and
5. New definitions and examples.

The existing rule requires covered entities to perform a risk assessment and then develop and implement safeguards to address identified risks. The amended rule adds that risk assessments 1) must include specific criteria and 2) that the risk assessment must be in writing. As for safeguards, the amended rule will require the safeguards “address access controls, data inventory and classification, encryption, secure development practices, authentication, information disposal procedures, change management, testing, and incident response.”

While employee training and vendor oversight is part of the existing rule, the amended rule takes these to the next level. Covered entities are now required to have “mechanisms designed to ensure that such training and oversight are effective.”

Full compliance is required by Jan. 10, 2022. 

What’s in store for 2022?

• Federal legislation continues to be in play, but there are no frontrunners among the various bills introduced thus far.
• Numerous states have legislation that did not pass this year but will carry over to 2022, and some of the bills are a significant departure from what currently exists and would not be considered “industry friendly.”
• In the absence of a federal law that preempts state privacy laws, it is likely some of those state measures will be enacted.
• The newly established California Privacy Protection Agency will engage in rulemaking related to the California Privacy Rights Act of 2020, which amends the CCPA.

ST. LOUIS, Mo. — Credit Control, LLC (“Credit Control”) is proud to announce that Phil Thomas
has joined the company as Vice President – Sales. He joins an established team
of industry experts specializing in consultative sales & business
development and will be a key part of the Credit Control team’s focus on expanding its national presence as industry leaders in the collections and recovery industry.

Phil comes to the role with over 25 years of
experience including 16 years of senior sales positions at some of the most
well-known agencies within the industry and 10 years as the Recovery Vendor
Manager at AT&T overseeing their agency network.

“Credit Control was recommended to me by
multiple creditors, clients, agency owners, and CEOs. The company’s reputation
for performance & innovation was well-known and working at a values-driven
company matched my long-term goals,” said Mr. Thomas. “As I learned more about
Credit Control, my decision to join their team was an easy choice.”

“We are thrilled to welcome Phil to the
Credit Control Sales Team,” stated Rick Saffer, President & CEO.
“His experience & reputation within the industry is a great match for
our company and his long-term relationships will have an immediate impact on our
continued growth.”

Phil will be based out of our corporate
headquarters in St. Louis, MO, and can be reached directly at 503-704-2179 or
via email, pthomas@credit-control.com.

About Credit
Control, LLC

Headquartered in St. Louis, MO, Credit Control, LLC is a recognized leader in
collections and recovery solutions. Since 1989, Credit Control has
served a wide variety of blue-chip clients through its four nationwide
locations and a team of over 600 employees. The company is founded on its core
values of providing strong customer service and exceptional recovery results
for our clients; developing an employee culture that is built on trust,
accountability, and clear communication; and creating solutions that utilize
the latest technology.

Credit Control’s recovery approach blends traditional collections
with omni-channel communications in a fully compliant & customer-centric
culture. The company maintains ISO/IEC 27001 certification,
audited SSAE-18 SOC 1 Type 2 and SOC 2 Type 1 reports, Level 2
PCI-DSS compliance, and secured systems. The company has received numerous
awards for performance, compliance, and innovation from many of the largest
creditors in the world and has been recognized as back-to-back winners of
InsideARM’s Best Places to Work in Collections.

As an Equal Opportunity Employer, Credit Control is committed
to fostering, cultivating, and preserving a culture of diversity, equity, and
inclusion. Credit Control’s mission is to become the preferred supplier to
industry leaders by providing the highest level of quality, compliance, and
innovation while delivering top tier performance in a positive employee work
environment.

MADISON, Wis. —  In the spirit of
the season, State Collection Service (State) continued its annual holiday
tradition of Adopt-a-Family by donating $7,100 to assist families in their
communities.

In past years, State’s team has collected
gifts to donate but with most team members currently working remote, State
shifted to an online fundraiser. The generosity of State’s team members was
matched by the company to enable donations to be made to:

House of Mercy – Beloit, WI
DAIS – Madison, WI
Hope House – Milwaukee, WI
St. Peter’s Catholic Church – Geneva, IL
Feeding America – Remote Staff

“I am proud of the generosity of our team and
grateful we are able to help families in need, especially after such a
difficult year,” said Tim Haag, State’s president. “Our team strives to make a
difference in the lives of our clients and their patients every day. This is
another example of our team’s compassionate spirit and desire to help others in
our communities.”

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.