Archives for August 2023

When it comes to reaching consumers, it’s no secret that email has surpassed phone calls as the preferred method of communication. In fact, 59.5% of consumers prefer email as their first choice for communication.

But just because your business sends emails to consumers doesn’t mean that your messages make it to their inbox. And if that email never reaches the intended recipient, it doesn’t matter what that customer’s preferred method of communication may be.

There are more factors than you may realize that go into whether or not your email reaches the consumer’s inbox, so let’s look at the hidden anatomy of email and the factors that influence where your emails end up.

What’s the Difference Between Mail Servers, Mailbox Providers, ISPs, and ESPs?

Before we look at what happens when you hit “send” on that email, it’s important to identify some of the key components that operate behind the scenes to get your message from point A to point B.

• Mail Server: A mail server (also known as a mail transfer agent or MTA) is an application that receives incoming email from the sender and forwards outgoing messages for delivery to the recipient.

• Mailbox Provider: A mailbox provider provides email hosting and implements email servers to send, receive, accept, and store email for the recipient.

• ISPs: Internet Service Providers (ISPs) provide internet. Although ISPs can provide email services, separate ESPs are often used for business email operations—but ISPs play a major role in email delivery and landing in the recipient’s inbox.

• ESPs: Email service providers (ESPs) are a service that enables businesses to send emails and email campaigns to a list of subscribers.

How Does Email Actually Work?

When you hit the “send” button, your ESP sends the email to the recipient’s mail server through various protocols such as SMTP (Simple Mail Transfer Protocol). The delivery process involves establishing a connection with the recipient’s mail server, transferring the email content, and receiving a response indicating whether the email was accepted or rejected by the mailbox provider.

Several key factors play into whether an email gets tagged in spam or junk or filtered into “social” or “promotion” categories.

• Mailbox providers and anti-spam filters make inbox placement decisions based on a 30-day rolling history of sender reputation metrics

• Inbox placement is based on the subscriber’s interaction, regardless of your business model

• All types of emails are subject to the same filtering, regardless of content

Why are ISPs So Selective?

The ISPs are selective on what emails get accepted and which actually reach the inbox. But there are three key initiatives ISPs consider:

To protect email account owners from:

• Spam
• Scams
• Poor experience

To protect and prioritize company resources:

• Limited email engines i.e. mail servers
• Limited bandwidth
• Limited personnel or internal expertise

To continue driving revenue:

• Lower email interaction reduces ad impressions and revenue
• Too many emails can lead to account abandonment from subscribers

Best Practices to Get Your Emails Delivered

Understanding the different components of email, how it actually works, and the selective filters in place to protect consumers are all important to a successful email program. Now let’s look at several best practices to follow:

• Build and maintain a positive sender reputation with ISPs and ESPs
• Ensure good email list hygiene
• Send to actively engaged subscribers
• Maintain consistent volume and cadence (avoid spikes)
• Avoid spammy subject lines
• Develop valuable content that would engage subscribers

While many of these best practices may seem like no-brainers, achieving them can take more skill and effort than most businesses expect. Each of these contribute to email delivery rates and more importantly, deliverability to recipients’ inboxes—key drivers towards consumer engagement and your bottom line.

In remarks delivered on August 15, 2023 at a roundtable convened by the White House on protecting Americans from harmful data broker practices, CFPB Director Chopra announced that the CFPB plans to propose a rule under the Fair Credit Reporting Act (FCRA) to address the practices of data brokers.  In connection with Director Chopra’s announcement, the CFPB issued FAQs about its rulemaking plans.  Both Director Chopra’s remarks and the FAQs highlight the use of data collected by data brokers to feed artificial intelligence used to make decisions about consumers.

In his remarks, Director Chopra indicated that in September 2023, in advance of convening a SBREFA panel, the CFPB plans to publish an outline of proposals and alternatives under consideration for a proposed rule.  The FAQs advise small businesses interested in participating as a panelist to contact the CFPB within the next week.  Director Chopra also indicated that the CFPB plans to issue a proposed rule in 2024.

In March 2023, the CFPB issued a request for information (RFI) about business models that collect and sell consumer data, such as data brokers, data aggregators, and platforms.  While neither Director Chopra nor the FAQs clearly indicate what is meant by the term “data broker,” the CFPB used the term “data broker” in the RFI to describe businesses that “collect, aggregate, sell, resell, license, or otherwise share consumers’ personal information with other parties.”  It indicated that the term encompassed companies that act as first-party data brokers and interact directly with consumers as well as third-party data brokers with whom consumers do not have a direct relationship.  

It also included firms that specialize in preparing employment background screening reports and credit reports.  In describing the activities of data brokers, the CFPB stated that they “collect information from public and private sources for purposes including marketing and advertising, building and refining proprietary algorithms, credit and insurance underwriting, consumer-authorized data porting, fraud detection, criminal background checks, identity verification, and people search databases.”

The FAQs indicate that the CFPB received “more than 7,000 responses” to the RFI and describe some of the issues raised in response to the RFI.  Among the issues raised are the impact of “data broker harms” on protected classes and vulnerable individuals and the sharing of data in ways that consumers do not expect.

Most significantly, the CFPB suggested in the RFI that many data brokers who act as “consumer reporting agencies” under the FCRA nevertheless disclaim FCRA coverage.  The CFPB stated:

“Many companies [that sell consumer data] whose business models rely on newer technologies and novel methods purport not to be covered by the FCRA.  These companies are sometimes labeled ‘data brokers,’ ‘data aggregators,’ or ‘platforms,’ but they all share a fundamental characteristic with consumer reporting agencies—they collect and sell personal data.”

As described by Director Chopra and the FAQs, the proposals under consideration would:

• Define a data broker that sells certain data as a “consumer reporting agency” under the FCRA.  A data broker’s sale of data regarding, for example, a consumer’s payment history, income, and criminal records would generally be treated as a “consumer report” under the FCRA because it is typically used for credit, employment, and certain other determinations.
• Clarify the extent to which “credit header data” constitutes a “consumer report” under the FCRA.  Such data is personally identifying information such as a consumer’s name, address, or social security number which is held by traditional consumer reporting agencies.

MENLO PARK, Calif — As summer heat rolled in, the team at Latitude by Genesys selected a thirst-quenching nonprofit to support. Focused singularly on bringing clean and safe water to people around the world, Charity: Water is busy hydrating people year-round through the support of generous individual and corporate donors.

“This is an issue I’m interested in and Charity: Water is an organization that I personally support as well,” said Latitude Sr. Director of Business Operations, Cris Bjelajac. “What better time to turn our attention to the need for a staple like clean water than at the hottest time of year? There are still areas of the world where clean and safe water is simply not available or logistically complicated to obtain. Between travel hazards of getting to a water source and contamination hazards of unsanitary water sources, something that is an absolute necessity is still too often considered a luxury. Charity: Water has developed a transparent and efficient system of isolating the issues and providing solutions to help solve the water crisis with transparency and focus.”

Man on a mission 

Charity: Water was founded by Scott Harrison, a former New York City nightclub promoter. Per the organization’s bio, “After a decade of indulging his darkest vices as a nightclub promoter, Scott declared spiritual, moral, and emotional bankruptcy. He spent two years on a hospital ship off the coast of Liberia, saw the effects of dirty water firsthand, and came back to New York City on a mission,” says the nonprofit’s website.

World water crisis 

According to a study published by Unicef and the World Health Organization, 771 million people in the world live without clean water, equating to nearly 1 in 10 people worldwide. As the Charity: Water website notes, “The majority live in isolated rural areas and spend hours every day walking to collect water for their family. Not only does walking for water keep children out of school or take up time that parents could be using to earn money, but the water often carries diseases that can make everyone sick. But access to clean water means education, income and health—especially for women and kids.”

The Latitude Perspective

Latitude by Genesys aligns its charitable giving with causes that matter to the team. As problem-solvers and innovators themselves, the ethos of the team leans toward charitable organizations that work transparently to address critical issues through efficient problem-solving and processes that make a real difference in improving people’s daily lives.

This video explainsthe journey of a donation to Charity: Water including specific ways the international teams implement clean water projects. To learn more or join us in support of this cause, visit charitywater.org for a one-time or recurring donation.

About Latitude by Genesys 

Latitude by Genesys® is a comprehensive debt collection and recovery solution for managing all pre- and post-charge-off accounts and workflow processes. It provides collectors and agents with the tools to manage the debt collection and recovery process and provides full functionality for the collector’s or agent’s desktop and deploys as a true zero-footprint, browser-based environment. Since 1996, Latitude’s focus has been to provide the most forward-thinking, attractive solution to the business needs of different people and companies in the accounts receivable management (ARM) space. Acquired by Genesys in 2016, Latitude is continually growing, innovating, and reshaping the technology expectations and customer experiences of ARM companies and their consumers.

On August 8, a unanimous panel of the Ninth Circuit issued a decision affirming a district court’s partial dismissal judgment entered in Trim v. Reward Zone USA LLC, holding that text messages did not use prerecorded voices under the Telephone Consumer Protection Act (TCPA) because they did not include audible components.

In Reward Zone, the plaintiff brought a class action against the defendant alleging, in part, that she received at least three mass marketing text messages which utilized “prerecorded voice[s]” in violation of TCPA, 47 U.S.C. § 227. The first text message stated: “Hiya Lucine, you are a valuable customer. In these tough times, let us [] reimburse [you] for your shopping needs.” The text then provided a link to the defendant’s promotional website. 

The plaintiff was never a customer of the defendant and never provided her cell number to it or its lead vendor. The plaintiff argued that, because one definition of “voice” in Meriam Webster’s dictionary is “an instrument or medium of expression,” the automatic messages sent to her (which were drafted before being sent), constituted “prerecorded voice[s].” The district court granted the defendant’s motion to dismiss as to this count. The plaintiff then filed an unopposed motion to certify the issue for appeal, which the district court granted.

Under the TCPA it is unlawful to “make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service.” The Ninth Circuit found that, “Congress clearly intended ‘voice’ in 47 U.S.C. § 227(b)(1)(A) to encompass only audible sounds, because the ordinary meaning of voice and the statutory context of the TCPA establish that voice refers to an audible sound.”

The plaintiff also argued that binding Federal Communications Commission (FCC) rules preclude a finding that the definition of voice requires an audible component, because the Ninth Circuit has deferred to the FCC’s interpretation that a text message is a call under the TCPA. Thus, because the FCC has determined that a text message is a call, it must have a voice. The court of appeals dismissed this argument finding, if a statute “is unambiguous, we do not defer to the agency’s interpretation.”

Notably, in a separate appeal as to the first cause of action, the court of appeals, relying on its decision in Borden v. eFinancial, LLC, summarily affirmed the dismissal of the plaintiff’s claim that the technology used by the defendant was an automated telephone dialing system (ATDS) because it did not generate telephone numbers using a random or sequential number generator.

Those of us who have witnessed the frustration of consumers who have paid money to a debt settlement company only to find out their debt hasn’t actually been paid down may have wondered how the consumer got there. Were they tricked? Or did they understand what they were signing up for? A party to one of these agreements recently shared the complete process and unredacted debt settlement agreement with me. The fine print was shocking. Though this can only be directly tied to one debt settlement company, I suspect this agreement is not unique. 

The 80-year-old consumer who entered into the agreement contacted the Debt Settlement Company (DSC) in the spring of 2023 after seeing an advertisement claiming the DSC could negotiate down his debts by 35%. To him, this seemed like a great deal! Within a few days, the DSC got the elderly consumer’s signature by sending a mobile notary to meet him locally.

Though vague bullet points regarding the terms of the agreement were provided to him at signing along with more promises of reduced debt, he did not have the time at signing to read the fine print of the agreement. They say the devil is in the details, and this agreement is no exception.  The fine print set up an arrangement entirely different than the verbal representations and bullet points provided to the elderly consumer. 

The Agreement

Though the DSC promised attorney representation and reductions of at least 35% of his debt, here’s what the consumer actually signed up for:

The program is expensive, charges upfront fees, and puts consumers in a worse financial position than where they started

The agreement I reviewed showed that the Consumer’s total debt was over $110,000.00. The DSC was going to charge: 

• An upfront retainer fee of $995.00
• Monthly Legal Administration fee -$99.00 
• Service costs of 19% of total debt – (= Greater than $20,000.00); 
• a $10.95 banking fee, Which wasn’t disclosed until the payment schedule sheet of the contract; and 
• other fees may also apply

The DSC contract required the consumer to pay more than $1,300/mo. to meet these amounts.

Though the DSC set a target settlement at 35% off of the Consumer’s debt, doing the math, at best, the retainer fee + monthly fees + service costs + monthly cost of maintaining the account means that their clients end up perhaps only slightly ahead of paying 100% of their debts. At worst, if the DSC keeps them in the program longer than the estimated amount of time, the consumer could ultimately pay more. 

The DSC will not attempt to settle debts right away

Further compounding the financial burden on the consumer, auto-drafting is required, yet the DSC will hold funds and not reach out to creditors until 25% of the balance is deposited in the bank account the DSC manages. Late fees and other charges will continue to accrue during this time. If the consumer terminates the agreement, the DSC will take funds it “earned” before returning anything to the client. Consumers are responsible for fees regardless of early settlement. 

By holding funds and not communicating with creditors, the DSC forces charge-offs.  Buried in the fine print, charged-off debts are considered approved settlements; DSC can settle however they want. 

Finally, the DSC admits that this program will harm the Consumer’s credit and may result in lawsuits. 

The Consumer is not represented by an attorney in the traditional sense of the word.

Though there is a law firm tied to the agreement, the agreement is titled as a “client retainer,” and states in the opening paragraph that it forms an attorney/client relationship, a more careful review of the fine print shows the agreement is actually for a “Debt Resolution Program.” Driving this point home, further down in the agreement, the fine print says that the consumer doesn’t really have attorney representation and notifies the consumer that a court might find there is no attorney representation under the agreement.

More importantly, despite holding itself out as a “Law Group” and implying to the consumer that attorneys would be handling the consumer’s debt and their “case,” the fine print says the work will be performed by contracted parties, and the DSC will only defend lawsuits if it thinks it can gain a favorable result. In other words, despite thinking they are legally represented, the consumer will be on their own to defend a lawsuit if the DSC isn’t interested in it.

Unlike an attorney, the DSC won’t handle phone calls about debts. The fine print says collection calls will continue and complicates the matter by prohibiting the consumer from discussing debts when contacted. An actual attorney would handle communications on behalf of their client. 

A Call to Action:

Debt settlement agreements like the one highlighted above pose a real threat to consumers. They are particularly detrimental since the consumer thinks they are engaging with an entity that is there to help them. Though ARM industry participants have no control over debt settlement companies, there are two ways we can help eradicate these bad actors.

Inform regulators

The ARM industry has many contacts with regulators. When we learn about or get these agreements, we should send them to our contacts at the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). This is not to engage in a what-about-ism discussion but instead shows our collective continued dedication to making the debt collection landscape better for consumers. Though we can disagree with many of the CFPB’s recent initiatives and the way they go about them, we can’t pick up our ball and go home when it comes to consumer protection. 

Enhancing our messaging to consumers

Unlike the villainous descriptors hurled our way, debt collectors are the pressure release valve between charge-off and litigation or bankruptcy. The debt collection industry provides consumers with options regarding their debt that they didn’t know were available. Perhaps if more consumers knew that, they wouldn’t feel the need to sign up with debt settlement companies that trick them into paying them under the guise of helping. We, collectively, can be louder about the benefit we provide consumers. Not just our critical role in the financial ecosystem but about the real, tangible benefits our industry provides those consumers who are trying to figure out how to get back on their feet. 

NEW YORK, NY — Skit.ai, the leading conversational voice AI solution provider in the ARM industry, announced today its strategic partnership with LJ Ross Associates, a 30-year-old collection agency successfully managing revenue recovery programs. The partnership with Skit.ai provides LJ Ross Associates with a unique competitive edge, enabling seamless scalability and agile, efficient operations fueled by state-of-the-art voice AI technology.

Ever since its founding, LJ Ross has championed compliant and consumer-friendly practices. In recent years, the agency had been looking for a robust technology such as voice AI to solve its core challenges—skilled agent shortages and the spiraling cost of collections—which were limiting their potential to scale and also provide customer support. Skit.ai’s Augmented Voice Intelligence platform solves the issues of availability and scalability stemming from staffing challenges. The platform’s ability to engage with thousands of consumers within minutes and be available 24/7 to answer calls has led to improved connectivity, enhanced collections, at reduced costs.

Speaking about the partnership, Rebecca Roberts-Stewart, COO of LJ Ross Associates, stated: “Skit.ai is helping us optimize agent bandwidth, as it enables our agents to spend more time answering high-value inbound calls. With Skit.ai as our first filter, our long-term goal is to ramp up call automation and increase inbound calls. The voice AI platform has already helped us take steps in that direction, with the 40% boost in inbound traffic as a testimony to the solution’s efficacy. We look forward to furthering our engagement with Skit.ai.” 

In a turbulent market subject to severe consolidation, this partnership proves that solutions such as Skit.ai’s Augmented Voice Intelligence platform can enable collections agencies to create an unparalleled competitive advantage that helps them outperform even with more prominent players.

“LJ Ross Associates witnessed a 92% jump in connectivity and an 18% jump in RPCs, both of which enable them to compete with larger agencies and even outperform them by resolving staffing challenges and the high cost of collections,” said Sourabh Gupta, founder and CEO of Skit.ai. “The success of this partnership demonstrates the impact voice AI can generate for the ARM industry and the importance of creating continuous long-term customer value through business innovation to maintain a competitive edge.” 

Schedule a meeting to learn more about how Skit.ai can help you accelerate revenue recovery with higher efficiency and at an infinite scale.

About LJ Ross Associates: 

LJ Ross Associates is a certified Women’s Business Enterprise (WBE) founded in 1992 with a passion for helping companies successfully manage their revenue recovery programs and providing the best customer service possible as an extension of your business. LJ Ross entered the debt collection industry by providing retailers with check collection and verification services. Since then, LJ Ross has expanded its operations into all major accounts receivable verticals, including the governmental (1994), utility industry (1996), medical industry (2001), commercial (2002), financial industry (2002), and educational industry (2006). In addition, LJ Ross is licensed to perform collection services in all 50 states and locales requiring such licenses, making them capable of serving collection needs nationwide. https://www.ljross.com

About Skit.ai: 

Skit.ai is the ARM industry’s leading conversational voice AI company, enabling collection agencies to streamline and accelerate revenue recovery. Skit.ai’s compliant, configurable, and easy-to-deploy solution enables enterprises to automate nearly one million weekly consumer conversations. Skit.ai has been awarded several awards and recognitions, including Stevie Gold Winner 2023 for Most Innovative Company by The International Business Awards, Disruptive Technology of the Year 2022 by CCW, and Gold Globee CEO Awards 2022. Skit.ai is headquartered in New York City, NY.  https://skit.ai/

On July 26, 2023, Professor Jeff Sovern of St. John’s University School of Law published a blog post discussing a new empirical study by Roseanna Sommers, Assistant Professor of Law at the University of Michigan Law School, dealing with consumer understanding of predispute arbitration agreements.  According to Professor Sovern, the Sommers study augments his earlier (2014) study of this subject and confirms that “consumers are generally unaware of whether their contracts contain arbitration clauses, and consumers who have agreed to such clauses tend to hold mistaken beliefs about their procedural rights ….” This week, in a follow-up blog post concerning the Sommers study, Professor Sovern asserts that consumers are “clueless” about arbitration opt-out provisions because companies use “dark patterns” on their websites to mislead them.

We have written extensively about Professor Sovern’s earlier study and found it to be “deeply flawed.”  Many of our criticisms apply equally to Professor Sommers’ study.   For example, under the Federal Arbitration Act, arbitration agreements must be treated equally with other contract terms and cannot be singled out for special treatment.  Both of these studies put arbitration under the spotlight even though they conclude that many if not most consumers are not aware of or do not remember any contract terms because they do not take the time to read the contract, or read it thoroughly.  According to Professor Sommers, “real-world data suggest that vanishingly few consumers in everyday settings read contracts of adhesion in their entirety …. [F]ew [consumers] … read the fine print at all, when encountering a consumer contract.”  To argue that this invalidates the arbitration clause—but not the non-arbitration terms of the contract—improperly singles out arbitration for special treatment.

The industry is not to blame if consumers are “clueless” (Professor Sovern’s word) about arbitration opt-out provisions or other terms of the arbitration clause.  Most companies go out of their way to try to educate consumers about arbitration.  They highlight the existence of the arbitration clause at the very outset of the contract and urge the consumer to read it carefully.  They also explain in detail how the consumer can opt out of the arbitration clause, the rights that will be waived if a dispute is arbitrated, the costs of arbitration, what the applicable arbitration rules provide, appeal rights and so forth.  That is why arbitration agreements tend to be lengthy.  Moreover, italics and bold-face and ALL CAPS are used liberally to focus the consumer’s attention on the arbitration clause—just the opposite of using “dark patterns” to obscure its existence and meaning, as we have noted.

While the industry is doing its best to make consumers arbitration-literate, the Consumer Financial Protection Bureau (CFPB) is not.  The CFPB has shirked its responsibility to educate consumers about the many benefits of arbitration, particularly when compared with class action litigation, even though it has virtually unlimited resources and a dedicated educational arm, the Division of Consumer Education and External Affairs.  Its own empirical study of consumer arbitration found many data points that should greatly interest consumers.  For example, as we have previously observed, the CFPB’s data confirmed that arbitration is a faster, less expensive and far more effective way for consumers to resolve disputes with companies than class action litigation.  Its study showed that consumers who prevailed in an individual arbitration recovered an average of $5,389.  By contrast, the average class action settlement for consumers who received cash payments was only $32.35, and those consumers often had to wait as long as two years to receive that paltry sum.  Class counsel, however, recovered a staggering $424,495,451.  These are just some of the many facts that would greatly interest consumers who have a dispute with a company, if the CFPB would help get the word out and encourage consumers to explore both sides of the arbitration versus litigation debate. 

On July 28, the U.S. District Court for the Southern District of Alabama granted summary judgment in favor of a defendant third-party debt collector in an FCRA and FDCPA putative class action, holding that the defendant carried out a reasonable investigation following plaintiff’s dispute of the debt it had reported to credit reporting agencies (CRAs) and that the plaintiff failed to establish that the defendant knew or should have known that the debt was inaccurate or invalid. 

The Defendant entered into an asset purchase agreement with another third-party debt collector and reported debts to credit reporting agencies under the name of the non-defendant third-party debt collector, including an account erroneously associated with plaintiff. When defendant received notice that plaintiff disputed the erroneous account information, defendant verified the account information in its system and provided by the CRA, asked the creditor to provide account documentation, and then requested that the CRAs delete their reporting of the account once the creditor failed to provide account documentation within the requested thirty-day period.

In relation to the FCRA claim, the court found that the defendant “did everything required by the FCRA in response to Plaintiff’s dispute” such that the plaintiff “failed to establish how this investigation was not reasonable” or in violation of the FCRA. The court also found that plaintiff “failed to show that any different result would have occurred had [defendant] conducted any part of its investigation differently.” Finally, plaintiff’s claim failed as a matter of law concerning defendant’s initial report of the debt to the CRAs because the defendant was not required under the FCRA to “investigate the validity of a debt before commencing to report on that account to the CRAs.” While the defendant was prohibited from reporting inaccurate consumer information, no private cause of action exists for violations of this initial reporting provision of the FCRA.

For the FDCPA claim, the court held that the plaintiff failed to establish that the defendant had knowledge that the debt it reported was not accurate or was otherwise disputed or invalid. Because the CFPB passed Regulation F in November 2021, after the events at question in this litigation, furnishing information regarding a debt to a CRA before communication with plaintiff was not unlawful at that time. Finally, the court found that plaintiff failed to timely assert that defendant violated the FDCPA provision prohibiting false, deceptive, or misleading representation by using the non-defendant third-party debt collector’s name when reporting the account to the CRAs because this allegation was not present in plaintiff’s complaint.

Read the full order here.