Archives for July 2023

SCRANTON, Pa.– Abrahamsen Gindin LLC (AG Law), a multi-state creditors’ rights firm, is pleased to announce the formation of a new commercial debt collection group to operate as AG Commercial Law, LLC (“AGC”).    The new group will be led by Lloyd S. Markind, Esq., together with Jerred P. Roth, Esq., long-time commercial collection attorneys in the states of Pennsylvania, New Jersey, West Virginia, and Kentucky.

AGC will also enable AG Law to expand its list of coverage states to include West Virginia and Kentucky, with its current states of New York, New Jersey, Pennsylvania, Delaware, Maryland, and Washington, D.C.

AG Law principals, Joshua Gindin and David Schlee, are excited about the opportunity to expand the Firm’s commercial services while broadening its coverage for consumer collections.  “We are excited to bring Markind and Roth on board as their presence will enable the Firm to better serve its existing clients and create the possibility of adding new clients as well” Gindin said.

Schlee concurred. “These are exciting times for AG Law and AGC.  The combined operation brings a whole new dimension to our overall business strategy and helps solidify our vision for the Firm. We are looking forward to the challenge” he said.

Contact:

Evan
Forster

EForster@ag-lawllc.com

(631)
393-9406

On July 10, the West Virginia attorney general, along with 26 other states, filed an amicus brief in support of respondents in Consumer Financial Protection Bureau v. Community Financial Services Association of America, arguing that the CFPB’s funding structure violates the Constitution and that by operating outside the ordinary appropriations process states are often left “out in the cold.” In their brief, the states urged the U.S. Supreme Court to uphold the U.S. Court of Appeals for the Fifth Circuit’s decision in which it found that the Bureau’s “perpetual self-directed, double-insulated funding structure” violated the Constitution’s Appropriations Clause (covered by InfoBytes here and a firm article here). The 5th Circuit’s decision also vacated the agency’s Payday Lending Rule on the premise that it was promulgated at a time when the Bureau was receiving unconstitutional funding.

Arguing that the Bureau is operating beyond the boundaries established by the Constitution, the states maintained that the current funding mechanism limits Congress’s ability to oversee the agency. “Even if the CFPB has done some good—and some would even dispute that premise—it wouldn’t matter,” the states said, warning that “sidelining Congress can greenlight an agency to wreak havoc,” especially if the “agency wields broad regulatory and enforcement powers over the entire U.S. financial system, acts under the control of a single powerful figure, and lacks other protections from meaningful oversight.”

The appropriations process plays a crucial role in enabling states to influence agency actions indirectly, the states maintained, explaining that when an agency initiates a new enforcement initiative or significant rulemaking endeavor, it is required to publicly outline its projected work in order to secure the necessary funding to carry it out. “Disclosure on the front end of the appropriations process can empower affected parties—including the [s]tates—to take quick, responsive actions beyond lobbying their representatives (up to suing to stop illegal action, if need be).” In contrast, the Bureau’s insulation from this process has allowed it to hide its actions from public view, the states wrote. As an example, the Bureau has repeatedly declined to interpret or provide further clarity on how the provisions governing unfair, deceptive, or abusive acts or practices work.

The brief also highlighted examples of when Congress used funding cuts through the appropriations process to curtail agencies’ powers. Additionally, unlike the challenges of amending authorizing statutes, appropriations bills must be passed by Congress each year to avoid a government shutdown, which can be “a painful pill to swallow for the sake of standing up for an agency’s policy choice,” the states noted, adding that “[b]ecause appropriations involves both oversight committees and appropriations committees, agencies may have ‘less flexibility to ally themselves with executive branch officials or interest groups.’”

The states also urged the Court to “ignore doomsaying” about the consequences of finding the funding structure unconstitutional. Should the Court agree to invalidate the funding structure, Congress can pass a proper appropriations bill for the Bureau, the states explained, adding that “a rebuke from this Court would no doubt grease the sticky wheels of the legislative process and move them a bit faster.” Moreover, states could also fill any gaps should Congress somehow pare back the CFPB’s funding, the brief stressed.

Several amicus briefs were also filed this week in support of CFSA, including an amici curiae brief filed by the U.S. Chamber of Commerce and several banking associations and an amici curiae brief filed by 132 members of Congress, including 99 representatives and 33 senators, which urged the Court to uphold the 5th Circuit’s decision.

SAN JOSE, Calif — The County of Santa Clara in California has officially launched the implementation of their new Cloud Collections Financial Ecosystem, “CSS IMPACT! HD™ 2.0” for its California Public Assistance Program called “Statewide Automated Welfare System” or “CALSAWS”.  CSS, Inc., a leader in innovation that continuously pioneers advanced solutions, is the exclusive provider of enterprise-grade financial ecosystems and omnichannel contact engagement solutions that cater to all verticals of the financial industry. 

Santa Clara County, known as “the Silicon Valley,” is a prominent destination for global technology companies. With a strong focus on innovation and digital transformation, the County consistently leads the way in adopting advanced digital tools to provide exceptional service to its residents. 

The County continuously aims to transform modern governance using cloud technologies and smart AI-enabled services. The vision is to provide smart, mobile, transparent, and engaging public services that encourage increased constituent participation and foster trust with our citizens. This transformative vision is outlined in the County’s strategic plan mission statement, which focuses on collaboration to support the goal of an enhanced experience and better services to its citizens.

“We are incredibly proud to have been selected by the prestigious County of Santa Clara to carry out this important project. Through the implementation of our cutting-edge “NextGen” HD 2.0 Collections Ecosystem, the County will be able to unify and simplify its outdated systems, giving users the power to streamline processes and improve efficiency, effectiveness, and transparency. Ultimately, this will lead to increased revenues for the County.” said Carl Briganti, President and CEO of CSS, Inc.

CSS’s financial cloud architecture offers a cost-effective solution for acquiring NextGen cloud technology and intuitive agile fintech to fully automate fundamental day to day processes. Major metropolitan municipalities such as The City of San Francisco, California, the great State of Utah, Norfolk, Virginia, and now Santa Clara County, can restructure their processes and benefit from a streamlined workforce. By utilizing CSS’s Cloud Financial Ecosystem platform, these municipalities can automate essential tasks, allowing them to prioritize revenue management and customer care.

About the County of Santa Clara

The County of Santa Clara is located at the southern end of the San Francisco Bay and encompasses 1,312 square miles. World-known as “the Silicon Valley”, the County of Santa Clara is a major employment hub in the technology sector providing more than a quarter of all jobs in the Bay Area with one of the highest median family incomes in the country. Home to a population of nearly 2 million from a wide diversity of cultures, backgrounds, and talents, the County continues to attract people from all over the world.

For more information on the County of Santa Clara, visit https://home.sccgov.org/home

About CSS

CSS, Inc. is a leading provider of complete enterprise-level Financial Ecosystems for the financial services industry. Our diverse range of solutions caters to all verticals and allows businesses to modernize their revenue and payment management systems by consolidating them into a single, unified enterprise-level cloud-based financial ecosystem with a wide range of fully integrated merchant services. This comprehensive solution unifies all areas of the enterprise, ensuring the highest level of financial transparency.

As pioneers in the industry, CSS prides itself on continuously introducing an innovative line of products such as the revolutionary COLLECTOR IQ+ & IMPACT IQ+. This powerful application seamlessly integrates Ai and Machine Learning into the debt-recovery workflows, providing both system administrators and agents with an intuitive and powerful set of dynamic tools for an unparalleled experience. Discover the future of financial management with CSS.

For more information, download our brochure at http://brochure.cssimpact.com or visit us http://www.cssimpact.com or call 877.277.4621 

FAIRFIELD, N.J. — Vertican Technologies, a global leader in the legal collections software industry, is excited to announce its corporate rebranding and the launch of its newly designed website, set to go live in the coming months.

As part of the rebranding initiative, Vertican has revamped its product logos to streamline their look and create a cohesive visual identity across all its offerings. The company’s new logos, which will be introduced across all its products in the coming weeks, reflect its commitment to innovation, modernization, and staying ahead of industry trends.

“We are thrilled to unveil our new corporate branding and website redesign,” said Isaac Goldman, Chief Executive Officer. “This is a pivotal step forward for our company as we continue to evolve and adapt to the changing needs of our valued clients and industry. Vertican’s rebranding is indicative of our dedication to providing cutting-edge solutions and an enhanced user experience.”

Vertican has been serving the legal collections arena for three generations, maintaining continuous ownership and a reputation for innovation and distinction. The rebranding and website redesign demonstrate the company’s commitment to staying current in a dynamic business landscape and delivering exceptional products and services.

Vertican has been revolutionizing the transmission and standardization of data used to protect creditors’ rights and the systems used to enforce those rights. The company’s long history in the receivables technology space has positioned them in leading the mission to advance the industry standard to a more unified height. The Vertican family of products, including its recently acquired interest in Greentree Legal (GTL), produces the legal collections industry’s most powerful and innovative technology.

Stay tuned for the official launch of the new website, which promises to be visually engaging, user-friendly, and loaded with valuable resources for clients.

About Vertican Technologies

For more than 40 years, Vertican Technologies has been the receivables industry leader providing best-in-class technology, making operations more efficient, compliant, and profitable. As the pioneer in developing data standards, Vertican continues to advocate for universal data standards which will increase productivity and reduce errors in the legal collection industry. Vertican’s team of subject matter experts and innovators build comprehensive software packages that automate and streamline the collections cycle. Solutions include: vExchange®, Q-LawE, Collection-Master, vMedia, Greentree Legal, and legacy YGC Data Standard licensing. Visit www.vertican.com to learn more.

In a matter involving the bona fide error defense to claims asserted under the Fair Debt Collections Practices Act (FDCPA), an Indiana court of appeals reversed a trial court’s order granting summary judgment in favor of the defendant debt collector holding that the defense did not apply because the mistake at issue was not of fact but of law.

The decision in Rockey v. Med-1 Solutions, LLC involved an alleged violation of the FDCPA arising out of the defendant’s failure to stop communicating with the plaintiff regarding a disputed debt.

In August 2020, the defendant began sending collection letters for unpaid medical bills to the plaintiff at an address it received from the original creditor. However, the plaintiff no longer resided at that address. Rather, the property belonged to her ex-husband, who was also the plaintiff’s attorney. On January 12, 2021, the plaintiff sent the defendant a letter disputing the debt and refusing to pay. The plaintiff’s letter did not update her mailing address. Following receipt of the plaintiff’s letter, the defendant continued its collection attempts, sending her another letter on February 22, 2021 and leaving her three voicemail messages.

The plaintiff then filed a complaint alleging the defendant failed to stop communicating with her in violation of FDCPA § 1692c(c).

The defendant moved for summary judgment, asserting: (i) it was shielded from liability by the bona fide error defense under FDCPA § 1692k(c); and (ii) no violation of the FDCPA had occurred because the collection letter was sent to the plaintiff’s attorney. The defendant’s bona fide error defense was based on the assertion that it had misread the plaintiff’s letter and mistakenly treated it as a dispute and request for validation rather than a refusal to pay.

The trial court granted summary judgment in favor of the defendant, finding that the undisputed material facts established that any violation of the FDCPA was unintentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid the error.

On appeal, the court found that the defendant violated the FDCPA because the collection letter at issue was addressed to the plaintiff not her attorney and the defendant was unaware that the attorney resided at that address. The court also found that the error made by the defendant’s attorney in misconstruing the plaintiff’s dispute letter was a mistake of law in interpreting the letter rather than an error of fact such as sending the letter to an incorrect address. Consequently, the court held that the bona fide error defense did not apply and reversed the grant of summary judgment in favor of the defendant. The court nonetheless remanded the case to the trial court for consideration of the defendant’s assertion that the plaintiff lacked standing because she did not sustain a concrete and particularized injury.

Troutman Pepper’s Take:

This case serves as a reminder that a defendant can only take advantage of the FDCPA’s bona fide error defense when the error at issue is a mistake of fact rather than an erroneous legal interpretation.

LOS ANGELES, Calif. — Arrears Inc., a pioneer in the debt collection industry, is set to transform the landscape of debt recovery with the introduction of their AI-enabled solution, leveraging the advanced capabilities of OpenAI’s GPT-4 technology. The new offering employs the latest LLM technology, enabling more efficient, effective, and empathetic communication with debtors, thereby improving collection rates and fostering better customer relationships.

“By harnessing the power of sophisticated language learning models and combining it with our own data, we’re able to automate and personalize the debt collection process like never before,” said a Trent McKendrick, CEO at Arrears. “Our communications solution not only scales these interactions but also ensures they are conducted in a respectful and understanding manner.”

In addition, Arrears features an account summarizer that allows agents to quickly review interactions and debtor engagement. This tool empowers agents to make faster, more precise decisions and manage data in a meaningful way, further enhancing the efficiency of the debt collection process.

Arrears represents a significant leap forward in the application of Conversational AI to debt collection. The technology generates human-like, effective payment reminder messages based on key inputs such as the debtor’s name, the amount owed, the overdue date, and the desired tone of the message. These messages are then integrated into Arrears’s Conversational AI platform, which intelligently sends reminders to debtors at optimal times, initiating the debt collection process without the need for human intervention.

Arrears invites businesses to explore the potential of intelligent conversations and automation in revolutionizing their collection processes. With Arrears, businesses can significantly improve their collection rate and customer relationships.

For more information, visit www.arrears.com.

About Arrears Inc.
Arrears Inc. is a Los Angeles-based company committed to transforming the debt
collection industry. By leveraging advanced machine learning technologies,
Arrears provides innovative solutions designed to enhance collection rates
and customer relationships.

BARRIE, Canada — Dave Rae, CEO of Bill Gosling Outsourcing, is very excited to bring the planning and design to fruition for their new site in downtown Barrie, after a 20-year journey in Newmarket, Ontario. 

The new headquarters, designed to meet the requirements of a growing workforce as Bill Gosling Outsourcing continues to expand globally, was built to create a best-in-class workspace in downtown Barrie.  Featuring beautiful collaboration zones, open workspaces throughout, fitness, spa and a 3,000 square foot patio to promote collaboration and creativity.  “Our executive team all felt the importance of creating offices that would provide a great balance for work and fun in a really strong community within a block of the vibrant downtown area of Dunlop Street and the Kempenfelt Bay waterfront”, Rae said.  

“With our expanding global footprint, we needed a headquarters that could fully support our growth strategies,” offered Kenny Johnson, President of Bill Gosling Outsourcing. “Our new headquarters is the perfect combination of high tech flexibility and interpersonal collaboration. We are excited to get more involved in the community in Barrie, as well as provide career opportunities to the local workforce.”

About Bill Gosling Outsourcing

Founded in Canada in 1955, Bill Gosling Outsourcing (BGO) provides outsourcing services for clients throughout North America, India, and the UK. With the recent acquisition of MattsenKumar, an outsourcing company based in India, BGO has expanded operations into seven countries with over 5500staff worldwide. Bill Gosling’s services include Customer Service/Support, Accounts Receivable Management, Customer Sales and Acquisitions, Ecommerce, Consulting Professional Services, Technology Solutions, Risk and Fraud Operations, Business Insights and Business Process Outsourcing.  

In April 2023, the CFPB released a policy statement on abusive acts and practices (Policy) and invited comments from interested stakeholders. According to the Consumer Relations Consortium (CRC), the ambiguity and vague concepts in Policy will ultimately harm the consumers the CFPB purports to protect. In its comment, the CRC urged the CFPB to update the Policy to create greater clarity and consistency to avoid this unintended consequence.  

Legal Advisory Board members Jessica Klander of Bassford Remele, Aryeh Derman of Clark Hill, Justin Penn of Hinshaw and Culbertson, and Jedd Bellman of Orrick prepared the CRC’s June 30, 2023 comments and raised the following concerns:

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The Policy is too vague to be effective.

The CRC began its comment by reminding the CFPB that debt collectors are often the most sophisticated person a consumer will speak to as they try to get their financial lives back on track. Though debt collectors represent their clients, they often assist consumers directly by serving as their primary liaison to the original creditor, gathering documents on their behalf, helping process disputes and hardship applications, and offering extended payment plans, settlements, etc.

To facilitate these types of communications, debt collectors must create and implement compliant policies and procedures. Clear laws create a path for debt collectors to ensure that all (and sometimes conflicting) applicable laws are followed. When laws or rules are unclear, debt collectors cannot draw solid lines for compliance. Ambiguous laws which cannot be followed with certainty deny consumers the opportunity to speak with anyone about their debt. 

As currently written, the lack of clarity and vague concepts in the Policy will make compliance with it exceedingly difficult and therefore make communications- including those that assist consumers- likewise exceedingly difficult.

The definition of ‘Material interference’ lacks sufficient clarity. 

In his prepared remarks, Director Chopra said the Policy “explains how companies are prohibited from manipulating people by ‘materially interfere[ing],’ or in other words obscuring, important features of a product or service.” However, the examples in the Policy regarding what constitutes a “material interference” are broad and unclear. They involve “digital” and “physical” interference, including buried disclosures, undisclosed pricing or costs, and overly complicated terms. No other examples are provided.

In its comment, the CRC opined that the language in the Policy is so vague and broad that it could potentially apply to any consumer interaction. Without clarification, definition, or a safe harbor provision for good faith compliance with laws, the overbreadth of this language will necessarily create compliance uncertainty, additional litigation, and inconsistency among jurisdictions regarding its meaning. 

Ultimately, this portion of the Policy will prevent communications with consumers and prevent them from getting their financial lives back on track. Consequently, the CRC urged the CFPB to address its concerns expressly rather than vaguely, provide additional definition and clarity, and add safe harbor provisions to the Policy.  

The concept of “Unreasonable Advantage” should be tied to an objectively reasonable industry standard. 

The Policy suggests that abusive conduct occurs when one takes “unreasonable advantage” of consumers and suggests that taking “unreasonable advantage” can come in three ways:

• The consumer’s lack of understanding. 
• The inability of the consumer to protect their own interest
• Reasonable reliance by a consumer that a covered entity [debt collector] is acting in the consumer’s interest.

The Policy does not set forth objective standards debt collectors can follow. Instead, the standard is subjective and indicates:

• The consumer’s lack of understanding is sufficient to demonstrate abusive conduct, regardless of how it arose. This may be true regardless of any act or omission of the debt collector or whether that lack of understanding by the consumer was reasonable.

• There is a higher risk for abusive conduct where consumers cannot exercise meaningful choice when interacting with or choosing a particular entity. The Policy Statement does not include examples of how a consumer could have achieved a different outcome had they participated in selecting a downstream vendor.

• The definition of “reasonable reliance” is open-ended. Though the Policy provides two examples, it also mentions that “[t]here are a number of ways to establish reasonable reliance” and cautions that the scenarios provided are not exhaustive.

Though the CRC fully supports consumer financial education and the mission to empower consumers by giving them the tools to make well-informed financial decisions, the scope of what could constitute taking “unreasonable advantage” of a consumer is so subjective and uncertain that the CFPB will leave the industry, especially the numerous good actors paralyzed concerning how to communicate with consumers and stay compliant. 

In its comment, the CRC urged the CFPB to change its proposed Policy to create clear guidance and reasonable objective standards. Debt collectors engage in inbound and outbound phone calls, emails, and other communications with limited knowledge of a consumer’s financial background or competency. Without sufficiently describing the standards the CFPB desires to set forth or the specific conduct it seeks to derail, debt collectors cannot be sure what additional information or disclosures are needed when communicating with consumers. When debt collectors don’t have the guidance to create clear internal procedures, consumer communications are stifled, ultimately to the consumer’s detriment. 

The CRC’s full comment can be found here. 

About the Consumer Relations Consortium 

The Consumer Relations Consortium (CRC) is an organization comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC’s collaborative and candid approach is unique in the market.  CRC is managed by The iA Institute.

About the Legal Advisory Board

The Legal Advisory Board (LAB) is an exclusive membership group of outside counsel with expertise in the accounts receivable industry who have each pledged their time and resources to support the mission of the CRC. The LAB is limited to ten law firms and is comprised of fourteen total attorneys. The 2023 members can be found here. Throughout the year, the LAB serves as a legal resource to the CRC membership and assists in fulfilling the mission of promoting forward-thinking approaches to the issues raised by regulatory policy and technology innovation in the accounts receivable industry.

NASHVILLE, Tenn. —  McGlinchey Stafford is pleased to announce the addition of Will Wojcik as a Member (Partner) and Cole Hodge as Associate to its Nashville office. Bolstering the firm’s prominent Litigation practice, these two attorneys are part of a larger expansion initiative within the firm and in Nashville. McGlinchey has hired 31 new attorneys, including 28 litigators, from January to the end of June, 2023.

“We are pleased to welcome Will and Cole to McGlinchey’s growing team here in Nashville,” said Shaun Ramey, managing member of the Nashville office and co-chair of the Financial Services Litigation team, where Cole practices. “Their diverse practices complement our local services well, and their in-depth knowledge of the commercial, real estate, and financial services markets will be a great asset to our clients nationwide.” In February, McGlinchey’s Nashville team moved into new space in the AT&T Building (also known as “The Batman Building”).

Will joins McGlinchey’s Enterprise Litigation and Investigations group. His practice spans litigation in the context of construction defect, real estate, contract, and zoning disputes, as well as advice and counsel on corporate, transactional, governance, and tax matters. Most recently practicing with Kay Griffin, PLLC, Will has experience prosecuting and defending claims in state, federal, and administrative courts, and has tried numerous jury and non-jury cases in Tennessee. With particular experience relating to collegiate entities, Will has also unique experience related to investigations and First Amendment issues.

In 2014, Will received his J.D. from Vanderbilt University Law School and in 2022 was ranked as a Mid-South Super Lawyers Rising Star in Business Litigation. He is currently pursuing an LL.M. in Tax from New York University, with an anticipated graduation in 2024.

“Many of my clients are national in scope. Joining McGlinchey will allow me to not only expand my own practice capabilities, but will also open the door to additional services I can offer longstanding clients,” Will said. “Expanding those opportunities was a very compelling draw for me, and the fact that I genuinely liked and enjoyed speaking with everyone I met at McGlinchey was a big bonus.”

Cole joins the Financial Services Litigation team, representing banks, loan servicers, mortgagees, and auto and manufactured housing lenders, and others in various disputes in state and federal courts. With a broader background in civil litigation, he also assists clients with contract, fraud, and shareholder disputes and in arbitrations and administrative proceedings. A native of Nashville, Cole received his J.D. from The University of Tennessee College of Law in 2021 and is admitted to practice in Tennessee. 

With offices downtown and in Music Row, McGlinchey’s six Nashville-affiliated attorneys represent financial services clients in regulatory compliance and litigation, entertainment clients in intellectual property and corporate matters, real estate entities in property and ownership disputes, and many others in various commercial litigation matters. Nashville is also home to a growing number of McGlinchey’s administrative team members. 

AboutMcglinchey

McGlinchey Stafford is a premier midsized business law firm offering services in nearly 30 practice areas through a highly integrated national platform. McGlinchey attorneys leverage bold innovation, diverse talent, and leading-edge technology across our powerful network to serve clients at the local, regional, and national level. With 160 attorneys licensed in 33 states, McGlinchey operates from 17 offices nationwide. The firm currently has 18 attorneys and 9 practice areas recognized in Chambers U.S.A. 2023 and Chambers FinTech 2023, and 53 attorneys recognized by Best Lawyers, 40 attorneys recognized in various Super Lawyers rankings, 49 practice areas recognized by Best Law Firms, and was named a “Top Performer” by the Leadership Council for Legal Diversity (LCLD) since 2018. To learn more, visit www.mcglinchey.com.