Archives for March 2023

Utah Gov. Spencer Cox on March 23 signed into law Senate Bill 127, which amends the state’s data breach notification statutes.  The amendments go into effect May 2, 2023.

The amendments include:

– Creation of the Utah Cyber Center, which will partner with various other state agencies and will, in part:

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• develop a statewide strategic cybersecurity plan for executive branch agencies and other governmental entities;
• identify, analyze, and mitigate cyber threats and vulnerabilities;
• coordinate cybersecurity resilience planning;
• provide cybersecurity incident response capabilities;
• recommend to the division standards to increase the cyber resilience of executive branch agencies;
• promote cybersecurity best practices;
• share cyber threat intelligence with governmental entities.

– A requirement that if any person who owns or licenses computerized data that includes personal information concerning a Utah resident becomes aware of a breach of system security and the investigation reveals that the misuse of personal information relating to 500 or more Utah residents has occurred or is reasonably likely to occur, the breach notification must be provided to the Attorney General and the Utah Cyber Center, in addition to the residents affected.

– A requirement that if the breach relates to 1,000 or more Utah residents, the notification must additionally be provided to each consumer reporting agency.

– A provision that information submitted to the Attorney General and the Utah Cyber Center related to a breach is presumed to be confidential and protected and can only be disclosed if necessary to prevent imminent and substantial harm, or the information is anonymized or aggregated in such a way that prevents disclosure of a trade secret.

The California Department of Financial Protection and Innovation (DFPI) continues to tweak its proposed complaints and inquiries regulation. The newest iteration includes an update requiring those covered under the act (which includes debt collectors) to designate an officer to be ultimately accountable for the effective operation and governance of the complaint process, but does not specify what “ultimately accountable” means. Comments must be submitted to the DFPI by April 7, 2023.

Background

In 2022, the California Department of Financial Protection and Innovation (DFPI) proposed regulations establishing consumer complaint-filing processes and procedures for complaint investigation, response, reporting, and tracking. Many industry groups and other stakeholders, including the CRC, commented on the proposal.

The California DFPI updated the proposal in December 2022 and clarified several key points. California listened to industry feedback and the update even appeared to adopt all of the CRC’s comments (authored by  Legal Advisory Board, Joann Needleman of Clark Hill, Brit Suttel of Barron and Newburger, and Leslie Bender of Eversehds Sutherland).

The Newest Modification

On March 23, 2023, the California DFPI announced its second modification to its proposal. Many of the updates were minor formatting updates and innocuous clarifications, but there were a few substantive changes, including: 

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• a matter at issue in litigation is only exempted from being considered a “complaint” under the proposal if the person lodging the complaint filed the lawsuit. (see Section 1071(1)(H); page 2)

• Disclosures regarding the Complaint process and procedure need only be submitted to consumers who reside in California (see Section 1072(b)(1); page 4)

• Website disclosures must be provided in a font at least as large as the largest text on the page. (see Section 1072(b)(2); page 5)

• That covered entities shall have a live representative available to accept oral complaints at least twenty (20) hours a week, between 8 a.m. to 8 p.m. Pacific time (See Section 1072(c)(3); Page 6)

The most significant substantive change may create personal liability for certain officers of the covered entity, including debt collectors. See Section 1072(f); page 7 which now states:

“The covered person shall designate an officer to monitor the complaint process who shall be ultimately accountable for the effective operation and governance of the complaint process. The officer and any of the officer’s designees shall have the authority to change, amend, or rescind the acts, omissions, decisions, conditions, or policies of the covered person or service provider related to the financial product or service that is the subject of a complaint and to forgive or extinguish any debt, charge, or obligation of a consumer.” (emphasis added)

The proposal does not define “ultimately accountable” or provide any other insight into what that phrase might mean.

Comment Process

Interested stakeholders must submit comments addressing proposed updates by April 7, 2023. Comments may be sent by either of the following methods:

• Via e-mail to: regulations@dfpi.ca.gov with a copy to David.Bae@dfpi.ca.gov. Identify the comments as “PRO 03-21” in the subject line.

• Via postal mail addressed to: Department of Financial Protection and Innovation, Attn: Araceli Dyson, 2101 Arena Blvd., Sacramento, CA 95834.

insideARM Perspective

Though most of the updated proposal adds language to clarify points already included in the proposal, including a phrase that may create personal liability is troublesome. The DFPI already has the ability to enforce the rules without creating personal liability. The proposal does not specify why personal accountability is necessary to effectuate the purpose of the rule. 

The proposal says an officer must be ultimately accountable for the “effective operation and governance of the complaint process” but fails to establish any threshold or definition of what will be and will not be effective. Hopefully, including this language is merely a poor choice of words by the DFPI, and they will clarify it. If not, if the DFPI does indeed intend to create personal liability for officers of covered entities, they need to establish clear standards.

ROCHESTER, N.Y. — ConServe is pleased to announce that effective on March 3, 2023, Pamela Baird, ConServe’s General Counsel, became the new owner of ConServe and will serve as the company’s Chief Executive Officer.

Pam has been with ConServe for more than 15 years and is an accomplished attorney, fully armed with the experience, knowledge, and commitment to drive ongoing success and growth.  She remains committed to ConServe’s established Mission, Vision, and Values, as well as ConServe’s long history of doing the right thing, at the right time, in the right way.  As a result of her enterprise-wide advice, guidance, and assistance, ConServe has thrived while enhancing its stellar reputation in both the collection industry and in our community.  Pam looks forward to leveraging her experience to deliver even greater value to our Clients and their Consumers.

ConServe’s Founder and Former CEO, Mark Davitt, will remain an active board member to help ensure the company’s growth-oriented strategies remain on track.  Mark founded ConServe in 1985 and grew the business into a multi-million-dollar company.  His employees were his most valuable asset, and he believed all their work should demonstrate character, integrity and respect as they strived to help people manage their financial obligations in a way that preserves their dignity and self-respect. Leading by example was the foundation upon which the other successes are supported: valuable colleague, trusted advisor, good neighbor, and corporate citizen.  

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With this change of ownership, the official company name has changed from Continental Service Group, Inc., d/b/a ConServe to Continental Service Group, LLC d/b/a ConServe.  At this time, ConServe’s Clients, employees and business partners will experience no other immediate changes.  

About ConServe

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients.  Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands.  For over 37 years, they have partnered with their Clients to provide unmatched customer service while simultaneously helping them achieve their accounts receivable management goals.  Visit us online at: www.conserve-arm.com  

Last week, the CFPB created a stir when it announced a Consent Order (Order) with Portfolio Recovery Associates (PRA), one of the nation’s largest debt collectors and debt buyers. The 39-page Order is comprehensive. It imposes collection activity requirements not found in the Fair Debt Collection Practices Act (FDCPA) and litigation requirements typically left up to state law. It also provides insight into the CFPB’s mindset regarding collection activity, credit reporting, and what we might see proposed as rulemaking.

Here are the top 3 things ARM industry participants should know:

1. The Consent Order stems from the 2015 Consent Order between the CFPB and PRA. 

The Order is primarily based on alleged violations of a 2015 consent order between the CFPB and PRA (2015 Order). 

The 2015 Order alleged PRA (1) collected on unsubstantiated debt, (2) filed misleading affidavits in debt-collection actions, (3) misrepresented that it intended to prove debts if consumers contested them, and (4) misrepresented that the company had legally enforceable claims to debts outside of the applicable statutes of limitations. 

Though PRA did not admit to any of the CFPB’s allegations in the 2015 Order, it agreed to refrain from taking the following actions over a five-year period:

• Collecting debts without a reasonable basis
• Threatening or filing collection lawsuits without an intent to prove the debt
• Filing false or misleading affidavits in debt-collection actions
• Making false or misleading representations, and
• Collecting or suing on debt that is outside the statute of limitations. 

The 2023 announcement alleges that PRA violated several requirements of the 2015 Order and, additionally, the Fair Credit Reporting Act (FCRA) by:

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• Making representations about unsubstantiated debts, 
• Threatening to take legal action without offering or possessing the required documentation
• Misrepresenting that it would provide certain documents within 30 days
• Collecting time-barred debt without required disclosures
• Initiating “dozens” of lawsuits on time-barred debt
• Failing to inform consumers about investigation outcomes
• Failing to resolve disputes timely
• Conducting unreasonable investigations in response to fraud and identity theft allegations

2. No finding of wrongdoing, but PRA agreed to a compliance plan.

The 2023 Order did not establish that PRA committed the acts alleged by the CFPB. Instead, this was a stipulated agreement where PRA did not admit wrongdoing but agreed to take and refrain from taking specific actions. 

In addition to $24 million in fines and penalties, PRA agreed to prohibitions and affirmative requirements relative to debt collection and credit reporting, summarized as follows:

• Prohibitions: Debt Collection Activity. Among other prohibitions, the Order prohibits PRA from collecting debt where it does not have certain documents related to the account, specific chain of title documents, and reps and warranties from the debt seller. Further, PRA cannot engage in any collections activity on time-barred debt through litigation, arbitration, or other legal collections. 

• Affirmative Requirements: Debt Collection. PRA must provide documents within 30 days of a consumer’s request at no cost (unless documents have been sent within the previous year). Letters sent to a subset of consumers must disclose the consumer’s right to dispute in certain instances and include a statement that PRA will send documents to the consumer within 30 days of their request. Specific subsets of accounts will need to be reviewed for balance adjustments based on account-level documentation.

• Prohibitions: Dispute Resolution Activity.  PRA agreed not to resolve credit disputes based solely on (a) possession of document reflecting the name and claimed amount, (b) the failure of the consumer to provide a fraud affidavit, police report, or other documents evidencing fraud, or (c)  that the consumer made a past payment on the debt.

• Affirmative Requirements: Dispute Resolution Activity. Within five business days of determining that a dispute does not include sufficient information, PRA must provide the consumer with a frivolous or irrelevant determination notice that complies with Regulation V. 

The compliance plan portion of the Order requires PRA to train employees, develop procedures, and conduct auditing and monthly monitoring to ensure compliance. 

3. Impact on PRA’s Law Firms and Service Providers 

PRA’s compliance plan includes granular details and requirements for PRA’s collection law firms and service providers.  Additionally, the plan requires PRA to obtain a written contract with its law firms and service providers to imposes the following requirements:

• Specific performance responsibilities and duty to maintain internal controls
• Duty to provide adequate training on compliance with the Order
• A duty to alert PRA when consumers submit certain types of disputes or defenses
• Allows PRA authority to conduct periodic reviews of the law firm or service providers controls
• The right for PRA to terminate the contract if these terms are not adhered to.

PRA’s Response: 

On March 23, 2023, PRA released a statement regarding the agreement with the CFPB. PRA noted that the impacted consumers represent less than one-tenth of 1% of PRA’s active accounts, and the Order is not expected to impact the company’s financial condition or results of operations. 

PRA Group, Inc.’s President and Chief Executive Officer Kevin Stevenson said, “Our company was founded on the principles of treating customers with fairness and respect, and we have prided ourselves in upholding these values for more than 27 years. Although we have admitted to no wrongdoing as part of the resolution, and we continue to disagree with the CFPB’s characterization of our conduct, we are pleased to have this matter resolved and behind us, allowing us to return our full attention to our impactful work with consumers, promoting their journey toward financial recovery.”

Read the CFPB’s press release here.

Read the entire Consent Order here.

Read PRA’s complete statement here.

insideARM Perspective

The CFPB’s press release regarding the Consent Order provides insight into its agenda.

First, in the headline of its press release about the Consent Order, the CFPB called PRA a “repeat offender.” The CFPB has already announced it intends to create a registry of “repeat offenders.” As with the current Order, the proposed rule does not include an actual finding of wrongdoing is not a prerequisite for the classification as a “repeat offender.” Instead, the proposal incorporates a guilty-as-alleged standard. The comment period for the proposed registry is March 31, 2023. All stakeholders in the ARM industry are encouraged to comment. 

Second, the Consent Order sheds light on what CFPB thinks debt collectors should have in their possession before collections and initiation of legal proceedings, regardless of what the law says. The FDCPA does not include a debt-substantiation requirement for collectors. State law typically dictates the documents a plaintiff in a legal proceeding must produce to be successful on those claims. This Consent Order does both. It imposes a substantiation requirement on PRA and dictates what PRA must possess before engaging in legal collections. If the CFPB had the power to rewrite the FDCPA, it’s a safe bet we’d see these requirements included.  

Finally, the statute of limitations applicable to any one account is not as cut and dry as the bureau makes it seem. Statutes of limitation can be affected by a myriad of factors, including state law where the consumer lives, choice of law provisions in contracts, and case law. 

Despite the vast number of accounts held by PRA, which is undoubtedly at least in the millions, the CFPB’s press release cited “dozens”(!) of lawsuits initiated on time-barred debts throughout a five-year period. Notably, the CFPB fails to mention whether any of these cases plausibly fell within another statute of limitations. As Legal Advisory Board member Joann Needleman and Ari Derman noted here, the CFPB demands perfection.

Those in the ARM industry should take note of the CFPB’s positions here, particularly when assessing risk tolerance. The areas of gray, for example, when two potential statutes of limitations might apply, are getting narrower, and the potential exposure for getting it wrong may go beyond the confines of an individual case. 

RICHMOND, Va. — Bill Gosling Outsourcing recently partnered with Rahab’s Daughters and employed 100+ call center agents to provide relief to human trafficking victims in the Ontario region. Working alongside the Mississauga Nerve Centre, Bill Gosling agents in Canada (London and Newmarket) and Costa Rica (San Jose) provided 900+ hours of support, answering a 24/7 helpline for victims/informants and coordinating with local shelters to find beds for rescued victims. Thirty-five human beings were rescued from trafficking via these efforts. 

Bill Gosling Outsourcing is a global contact center headquartered in Newmarket, Ontario, and Rahab’s Daughters is an Illinois-based organization focused on combating human trafficking in the US. Rahab’s Daughters has affected profound and far-reaching impact, and, since 2015, they have rescued more than 1000 women and children from human trafficking. 

With shared core values strongly bonding both organizations, the management team of Bill Gosling Outsourcing, led by Natasha Singh (SVP of Operations), met with Rahab’s Daughters and created a plan of action to get involved. Through their expertise, Rahab’s Daughters identified that within the weeks surrounding the Super Bowl (one of the most significant annual events in the United States), around 10,000 women and children suffer from human trafficking – and that’s where Bill Gosling jumped in to assist. 

Bill Gosling Outsourcing was vocal in sharing this initiative with their client base, which resulted in generous client donations to support the 100+ volunteers with their work. The partnership with Rahab’s Daughters led to the following achievements:

• A total of 660 incoming calls were answered
• A total of 29,772 outgoing calls were made
• 35 rescues were facilitated (10 children and 25 adults)
• 200 makeup bags, 150 homeless bags, 600 “You are treasured” cards, and 500 tissue packets were donated

Sadly, there is still so much work to be done to combat human trafficking, and Bill Gosling is committing to support this initiative in the future. As Bill Gosling’s Natasha Singh notes, “There is even more planning and organizing to do with the Super Bowl in Las Vegas next year. Rahab’s Daughters will continue to face new challenges on the ground, and they need our help more than ever,” 

About Bill Gosling Outsourcing

Bill Gosling Outsourcing is an organization that goes beyond day-to-day business routines and looks for opportunities to make an impact in the community, with the intention of making lives better one connection at a time. 

Natasha Singh, SVP, Operations Natasha led the Rahab’s Daughters initiative from the Bill Gosling side. 1-647-267-0955, natasha.singh@billgosling.com

Or contact Joel MacCharles, SVP, Learning, Innovation, and Communications 1-416-737-7532, joel.maccharles@billgosling.com

https://www.billgosling.com

https://www.rahabsdaughters.org/

A three-judge panel of the U.S. Court of Appeals for the Second Circuit has unanimously ruled that the CFPB’s funding structure does not violate the Appropriations Clause of the U.S. Constitution.  In its decision, the panel expressly declined to follow the Fifth Circuit panel decision in Community Financial Services Association of America Ltd. v. CFPB that reached the opposite conclusion.  Last month, the U.S. Supreme Court granted the CFPB’s certiorari petition seeking review of the Fifth Circuit decision and agreed to hear the case next Term.

In CFPB v. Law Offices of Crystal Moroney, the federal district court granted the CFPB’s petition to enforce a civil investigative demand (CID) that it issued to Moroney prior to the U.S. Supreme Court’s decision in Seila Law holding that the limitation on the President’s ability to remove the CFPB Director only “for cause” was unconstitutional.  After that decision, then CFPB Director Kraninger ratified the issuance of the CID. 

On appeal to the Second Circuit, Moroney argued that the CID could not be enforced because (1) the CID was void when it was issued because the CFPB Director was unconstitutionally shielded from removal by the President, (2) the CFPB’s funding structure violates the Appropriations Clause, (3) Congress violated the nondelegation doctrine when it created the CFPB’s funding structure, and (4) the CID is unduly burdensome.  In an opinion written by Judge Richard Sullivan, appointed by President Trump, all of Moroney’s arguments were rejected by the Second Circuit panel.  The other two panel members were Senior Judge Amalya Kearse, appointed by President Carter, and Senior Judge John Walker, appointed by President George H. W. Bush.

CID not void when issued.  

In Collins v. Yellen, the Supreme Court held that an unconstitutional removal restriction does not invalidate agency action so long as the agency head was properly appointed.  Relying on Collins, the Second Circuit ruled that the CID was valid despite the unconstitutionality of the CFPA’s removal provision because Richard Cordray, the CFPB Director when the CID issued, was properly appointed.  In addition, relying on Justice Kagan’s separate opinion in Collins (in which Justice Breyer and Justice Sotomayor joined), the Second Circuit held that “to void an agency action due to unconstitutional removal protection, a party must show that the agency action would not have been taken but for the President’s inability to remove the agency head.” (emphasis included).  The Second Circuit found there was “nothing to suggest that the Director’s removal protection affected the issuance of the CID or the investigation into Moroney.”

No Appropriations Clause violation.  

The Second Circuit found no violation of the Appropriations Clause “[b]ecause the CFPB’s funding structure was authorized by Congress and bound by specific statutory provisions [in the Consumer Financial Protection Act (CFPA)].  In CFSA, the Fifth Circuit had concluded that Congress had ceded direct control over the CFPB’s budget by insulating it from annual or other limited appropriations and ceded indirect control by providing that the CFPB’s funding was to come from a source outside of the appropriations process, i.e. the Federal Reserve System.  The Fifth Circuit labeled this structure “a double insulation from Congress’s purse strings” that violated the separation of powers. 

The Second Circuit commented as an initial matter that it could not find any support for the Fifth Circuit’s conclusion in Supreme Court precedent.  It stated that “[t]o the contrary, the Court has consistently interpreted the Appropriations Clause to mean simply that ‘the payment of money from the Treasury must be authorized by a statute.’” (emphasis included, citation omitted).  The Second Circuit indicated that it was not aware of “any Supreme Court decision holding (or even suggesting) that the Appropriations Clause requires more than this ‘straightforward and explicit command.’” (citation omitted).

In addition, the Second Circuit stated that it “likewise find[s] no support for the Fifth Circuit’s reasoning in the Constitution’s text.”  That text provides that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”  The Second Circuit observed that “[n]othing in the Constitution, however, requires that agency appropriations be ‘time limited’ or that appropriated funds be drawn from a particular ‘source.’” 

The Second Circuit stated further that it found no support for the Fifth Circuit’s reasoning in the Appropriation Clause’s history.  According to the Second Circuit, the CFPB’s funding was “[c]onsistent with the historical practices of English, colonial, and state governments that formed the basis of the Founders’ understanding of the appropriation’s process at the time of the Constitution’s enactment.”  Those practices required that the “purpose” of an appropriation, a “limit” on its amount, and the “fund” for its payment be specified by a previous law.  According to the Second Circuit, these practices were satisfied by the CFPA’s list of five “objectives” for the CFPB, its limit on funding to 12% of the Federal Reserve System’s total operating expenses as reported in 2009 (subject to adjustment for inflation) and its designation of the combined earnings of the Federal Reserve System as the funding source.

No violation of nondelegation doctrine.  

Moroney  argued that, even if the CFPB’s funding did not violate the Appropriations Clause, Congress violated the nondelegation doctrine in enacting the CFPA because it did not articulate an “intelligible principle” in circumscribing the President’s discretion in appropriating funds.  The Second Circuit concluded that the CFPB’s funding structure is proper under the nondelegation doctrine because in the CFPA “Congress has plainly provided an intelligible principle to guide the CFPB in setting and spending its budget.”  The Second Circuit pointed to (1) the statement in the CFPA that the CFPB’s budget is to be used to “pay the expenses of the [CFPB] in carrying out its duties and responsibilities, (2) the CFPB’s purpose as stated in the CFPA to “seek to implement, and where applicable, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive,” and (3) the CFPA’s list of five “objectives” and six “primary functions” for the CFPB. 

CID not unduly burdensome.  

The Second Circuit concluded that Moroney had not met her burden of showing that the CID was unreasonable. Among her arguments rejected by the Second Circuit were that that the CID was not issued for a proper purpose because it sought information implicating the practice of law and attorneys engaged in practice of law are excluded from the CFPB’s enforcement jurisdiction.  The Second Circuit found that the CID was issued for a legitimate purpose because the CID was only addressed to Moroney’s debt collection activities and possible violations of the FDCPA and FCRA.

Moroney might seek rehearing en banc in the Second Circuit or, instead, file a certiorari petition in the Supreme Court.  With the Supreme Court already having granted CFSA’s certiorari petition and issued a briefing schedule, Moroney may be more likely to opt to file a certiorari petition.  If filed, the CFPB is unlikely to oppose Moroney’s petition and the Supreme Court is likely to grant the petition and either consolidate it for argument with CFSA or hold it pending the outcome in CFSA.  

The Supreme Court did not grant CFSA’s cross-petition for certiorari which asked the Court to consider the alternative, non-constitutional grounds for vacating the CFPB’s payday lending rule that the Fifth Circuit rejected.  The Court also declined to consider the alternative grounds as antecedent questions added to the CFPB’s petition.  Nevertheless, some observers have suggested that the constitutional avoidance doctrine could still require the Supreme Court to first consider the alternative grounds before reaching the Appropriations Clause issue.  That doctrine provides that a court should avoid deciding a constitutional issue if there is another non-constitutional basis for resolving the case.  In that circumstance, the Second Circuit decision could provide a better vehicle for reaching the Appropriations Clause issue because Moroney’s non-constitutional arguments appear to be weaker than those of CFSA.

Other than the Fifth and Second Circuits, the D.C. Circuit is the only other circuit to have considered the constitutionality of the CFPB’s funding.  In its 2018 decision in PHH Funding v. CFPB, the en banc D.C. Circuit upheld the CFPB’s funding mechanism because it “fits within the tradition of independent financial regulators.”  However, unlike the Second Circuit decision which involved a direct challenge to the CFPB’s constitutionality based on its funding structure, PHH involved a challenge to the CFPB’s constitutionality based on the CFPB Director’s “for cause” removal protection in which the D.C. Circuit was asked to consider whether the the CFPB’s funding structure, when considered in combination with the Director’s “for cause” removal protection, created a separation of powers constitutional violation. 

Of course, the Supreme Court will have the final say on this matter.  

OLYMPIA, Wash.– The Washington State Collection Agency Board is seeking to fill vacant positions. 

Board Requirements: 

Two licensees actively engaged in the collection agency business for a minimum of five years in Washington state and two members of the general public. No board member shall be employed by or have any interest in, directly or indirectly, as owner, partner, officer, director, agent, stockholder, or attorney, any collection agency in which any other board member is employed by or has such an interest. In addition, no member shall hold any other elective or appointive state or federal office.

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How much of a time commitment is serving on the board?

Members serve 4-year terms, which are staggered so 1 appointment is made in each calendar year. The board meets at least 2 times a year. Meeting dates, times, and locations are decided by the board and administrative staff.

How are the Board Members appointed?

Washington State Collection Agency Board members consist of five members, one of whom is the director and the other four are appointed by the Governor. The director may delegate his or her duties as a board member to a designee from his or her department.

Are board members paid?

Board members are compensated for their time and are reimbursed for board-related travel expenses as allowed by state law.

Who is on the board?

The Washington Collection Agency Board is made up of 5 members:

The Chair- appointed by the Director of the Department of Licensing

4 members who are appointed by the Governor, including:

2 licensees, who: 

• Are a collection agency owners or executive employees and have been so for 5 years or longer.
• Are actively engaged in the collection agency business for the length of their term.

2 public members\

—-

Click this link to apply https://www.governor.wa.gov/boards-commissions/boards-commissions/apply-serve-board-or-commission

Link to current open positions https://www.governor.wa.gov/boards-commissions/boards-commissions/upcoming-appointment-opportunities

The Next Board Meeting Will be September 28, 2023, At 10:00AM

The public is welcome and encouraged to attend. Information regarding past and upcoming board meetings are available on the website.

An Illinois federal district court recently denied a creditor-defendant’s motion for summary judgment in a Fair Credit Reporting Act (FCRA) case brought by a consumer who questioned why his debt was being reported twice — as both a tradeline with the original creditor and as a tradeline with a third-party collection agency. The court’s opinion in Kyle Fickel vs. Clearwater Credit Union et al. is a warning about the credit reporting issues that can arise when lenders refer or assign debts to collections.

As background, the plaintiff in Fickel obtained a credit card from the defendant and fell behind on payments — prompting the defendant to refer the debt to a third-party collection agency. Thereafter, the plaintiff obtained a copy of his credit report and noticed the debt was listed twice. The first listing, or “tradeline,” was furnished by the defendant and described the debt as a revolving account in collections with a $10,145 balance. The second tradeline, furnished by a third-party collections agency, described the same debt as an open collections account, for which plaintiff owed over $12,000. The plaintiff submitted written dispute letters to the national credit reporting agencies (CRAs), describing the apparent double reporting:

“I have an account with Clearwater Credit Union with [account number] that I fell behind on. I notice they are reporting the debt on my credit report while Northwest Collectors [separate account number] is also reporting what I think is the same debt but for a different amount.

Who do I owe money to? I’m confused . . . . Why are both accounts reporting on my credit report? Are there interest or collection fees that I’m not aware of? I’ve been trying to repair my credit, this has me puzzled.”

The CRAs forwarded the dispute letters to the defendant along with Automated Consumer Dispute Verification Forms (ACDVs) containing an otherwise generic description of the dispute, save for the word “duplicate.”

During discovery, the defendant produced two corporate witnesses who testified that their standard procedure for investigating disputes was simply to verify that the information in the ACDV matched that in their internal systems. While the witnesses acknowledged that they knew the plaintiff’s dispute related to alleged “duplicate reporting,” their investigation of his dispute did not diverge from their standard procedure.

Following discovery, the defendant moved for summary judgment, arguing that there was no triable issue of fact showing that its reporting was inaccurate or that its investigation was unreasonable in violation of § 1681s-2(b) of the FCRA. The district court disagreed. In a five-page opinion denying summary judgment, the court noted the absence of governing Seventh Circuit authority on the issue of whether double-reporting is a FCRA violation. The court, however, concluded that a factual issue existed as “to whether the double reporting of [the plaintiff’s] debt with [the defendant] left a misleading impression that he had two separate debts, totaling $22,000 instead of a single debt of approximately $10,000.” The court further found that reasonable minds could differ as to whether the defendants’ investigation was reasonable despite knowing the plaintiff’s dispute concerned “duplicate” reporting.

Troutman’s Take:

The reasonableness of the post-dispute investigation was questionable in Fickel where the defendant was on notice regarding the nature of the dispute. This case also raises questions about the defendant’s front-end procedures for ensuring that accounts referred to collections are consistently and accurately reported. Lenders and collections agencies would be well-advised to delineate reporting responsibilities — i.e., who will be reporting the debt, for how long, and under what circumstances — whenever negotiating purchase agreements to mitigate FCRA exposure tied to inconsistent and/or duplicate reporting.

PHOENIX, Ariz. — Superlative RM is proud to announce that they have been named Agency of the Year by Crown Asset Management for the third consecutive year. As a small business, the team has worked hard to build a top-tier technology-driven operation and to reach the highest standards of quality for the consumers they serve on behalf of major reputable clients such as Crown Asset Management (CAM). 

“To have kept this title three years in a row is a milestone and something we do not take lightly. The award represents our commitment to what we call “The Superlative Way!” and our core values: creating a WOW factor with every consumer we contact, do it right from A to Z, and collaborate at every opportunity. Thank you, Crown Asset Management, for partnering with us and naming us your Agency of the Year once again. We are all in this together!” said Jerry Terrill, Founder and President of Superlative RM.

Crown Asset Management (CAM) Award Winners are selected from their reputable network of outsourced collection agencies and law firms. One collection agency and one law firm receive CAM’s highly regarded annual recognition for their business practices and commitment to the integrity of our industry. The awards honor outstanding achievements based on strong compliance metrics, procedural compliance, and overall performance throughout the year. 

“Superlative began its partnership with Crown in 2014 and has continually maintained exceptional compliance and service levels. Their depth of knowledge, industry experience, and quality of service continues to set them apart and provide the basis for additional growth. Superlative RM has achieved the Agency of the Year honor three years in a row. Thank you for your hard work and dedication! We are grateful for the partnership and look forward to continuing to grow together,” said Brian Williams, CEO of Crown Asset Management. 

About Crown Asset Management

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

About Superlative RM

Superlative RM is an accounts receivable management company that assists our clients by contacting consumers to resolve outstanding account balances. We are nationally licensed and work diligently to follow all current state and federal guidelines. We bridge the gap between creditors and consumers by innovating user-friendly, digital account resolution options.

March 15 was the deadline for the New York State Department of Financial Services to publish its proposed amendments to its debt collection rule. It didn’t and so they have expired. While the latest version of the proposed amendments has expired, you can bet on DFS releasing an updated version in the coming months.

DFS is certainly aware that the New York City Department of Consumer and Worker Protection proposed to substantially overhaul its debt collection rule last year and did so well after DFS released its first proposal. The two rules don’t always align, and stakeholders raised the issue with both agencies.

On top of that, New York state Sen. Kevin Thomas has introduced legislation to expand the scope of New York’s Consumer Credit Fairness Act to cover all consumer debt, not just the “consumer credit transactions” to which it now applies. If the bill becomes law, it would have made irrelevant certain of  DFS’ proposed amendments.  

We should expect the new DFS proposal to address the several comments it received. And it makes sense that the agency let the proposed rule amendments expire. By doing so it can digest DCWP’s rule (if it publishes one) and incorporate the expansion of the NYCCFA, should Sen. Thomas’ bill become law.