WEST SENECA, N.Y. — P&B Capital Group, a third-party debt collection agency, has made a donation to their local Society for the Prevention of Cruelty to Animals (SPCA) chapter, furthering their commitment to social responsibility and community involvement. This donation was the culmination of P&B Capital Group’s Q2 Community Involvement initiatives. As a community leader, the team encourages its employees to go out and support the organizations they are passionate about. 

“We believe in giving back to the community that has supported us over the years,” says Ryan Kazmark, Managing Partner at P&B Capital Group. “Our partnership with the SPCA allows us to make a meaningful impact on the lives of animals and the people who care for them. Everyone from our employees to our clients appreciates the work of the SPCA, and this donation will help save hundreds of animals.”

The SPCA: Championing Animal Welfare

The SPCA has long been a beacon of hope and compassion for animals in need. Founded with the mission to prevent animal cruelty and promote humane treatment, the SPCA provides shelter, medical care, and adoption services for thousands of animals every year. Their tireless efforts ensure that abandoned, abused, and neglected animals find loving homes and receive the care they deserve. 

Beyond their direct services, the SPCA also engages in public education campaigns, advocating for stronger animal protection laws and promoting responsible pet ownership within the community. SPCA support focuses on six key areas: Shelter Support, Veterinary Aid, Patriot Pets, Apollo’s Aid, PAWsitive Recovery, and Education. 

Community Support: The Heart of P&B Capital Group’s Mission

For P&B Capital Group, community support is more than just a corporate responsibility; it’s a core value that shapes their business philosophy. By supporting the SPCA, P&B Capital Group underscores the importance of corporate involvement in local causes. 

“Our success is deeply intertwined with the well-being of our community,” says Kazmark. “We are committed to making a positive impact where it matters most—right here at home.” 

This dedication to community engagement not only helps improve the quality of life for local residents and animals but also strengthens the social fabric of the community, fostering a sense of shared purpose and collective responsibility. P&B Capital Group exemplifies the profound difference businesses can make when they actively participate in community initiatives.

About SPCA

The SPCA (Society for the Prevention of Cruelty to Animals) is dedicated to preventing animal cruelty and promoting humane treatment. They provide shelter, medical care, and adoption services for abandoned, abused, and neglected animals, ensuring they find loving homes. In addition, the SPCA advocates for stronger animal protection laws and educates the public on responsible pet ownership, making a significant impact on animal welfare and community well-being.

About P&B Capital Group

P&B Capital Group, LLC is a nationally licensed, third-party collection agency that services non-performing accounts receivable and loan portfolios with compliance, transparency, and respect. They help consumers understand and resolve their financial obligations while providing improved cash flow for their creditor clients.

The only thing constant in the ARM industry is change. That’s why we at insideARM review all the news for you and bring you only the stories that are most important. Last week, after what felt like months of breaking news from the CFPB, the focus shifted to the states with important rulings in both Alabama and Indiana, and a new law in Maine that looks to greatly impact medical debt collection. Read on for a breakdown of these stories and why our team feels you need to know them.

On Tuesday, we highlighted an article about a District Court case from Alabama where a consumer sent a letter that did not include account information but disputed “all debts that [the consumer] may have” with the debt collector. Though the debt collector had two accounts for the consumer, they matched the consumer’s name and social security with only one account and halted negative reporting on only that account. The court denied the party’s cross-motions for summary judgment, holding that though the letter was ambiguous, there was a dispute of fact over whether the debt collector should have been able to find the second account. The ambiguity of the letter did not provide enough cover for the debt collector to dispose of the suit at the summary judgment phase. This case also highlights the importance of ensuring policies and procedures are robust enough to handle ambiguous disputes.

Wednesday’s news concerned an Indiana Court of Appeals case about whether passive debt buyers fit the definition of “debt collector.” The court, in upholding a lower court’s decision, determined that a passive debt buyer satisfied both the Indiana and FDCPA definitions of a “debt collector” and must be licensed as a debt collector in the state,  despite not collecting debts directly. Passive debt buyers and the agencies and law firms collecting for passive debt buyers should take note of this decision. 

We finished the week by bringing you a legislative update out of Maine. The state became the latest to sign into law restrictions on the collection of medical debt. Some of the highlights include prohibiting the collection of fees and interest on medical debt, making it a violation to suggest that fees or interest might be added if the debt is not paid, and a definition of “medical debt” (which excludes most credit cards). The biggest change makes it an unfair practice to pursue litigation against any consumer with a household income 300% or less of the federal poverty line. Those collecting medical debt in Maine should be aware of this update.

We truly appreciate you coming to us for another recap of the news! Looking for recaps from earlier this month? You can find the recap for the week of June 10th here.

While knowing what is going on is key, knowing how to act on this information may be even more important. Not to worry! insideARM has you covered with sample documents, legal resources, and access to other industry professionals through our weekly Peer Call. All of this can be found with insideARM’s Research Assistant. Click here to learn more and enjoy a free month to see if it fits your needs!

On
April 22, 2024, Maine became the most recent state to enact legislation aimed at limiting the collection of medical debt. The law, An Act to Prohibit Unfair Practices Related to the Collection of Medical Debt, amends Maine’s Fair Debt Collection Practices Act and concerns fees and interest, a litigation exemption, and the definition of medical debt. The full bill can be found here and goes into effect on August 9, 2024.

Unfair Practices and False or Misleading Representations

One of the main changes to the collection of medical debt is the prohibition on charging interest or fees. The amendment states that it is an unfair practice to charge any interest on debt or fee for collecting debt “that the debt collector knows is medical debt.” Further, implying that a fee or interest may be charged will be viewed as a false or misleading representation.

It will also be considered an unfair practice for a collector to pursue litigation against a consumer without first providing notice to the consumer “that litigation may not be pursued when the debt collector or collection agency knows the consumer’s household income is not more than 300% of the federal poverty guidelines[.]” A collector or agency must wait 30 days for a consumer to provide this evidence before proceeding to litigation.

Medical Debt Definition

The act provides the following definition for “Medical Debt”:

“Medical debt” means debt arising from health care services, including dental services, or health care goods, including products, devices, durable medical equipment and prescription drugs. “Medical debt” does not include debt arising from services provided by a veterinarian; debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered solely for the payment of health care services; debt charged to a home equity or general purpose line of credit; or secured debt.

insideARM Perspective:

The glass half-full view of this amendment is that, while it presents a number of obstacles for an already difficult type of debt collection, it could be worse. The definition it put forward for “medical debt” importantly excludes credit cards that aren’t specifically for health care services, the bill does not prohibit credit reporting medical debt, and does not inhibit the sale of medical debt.

However, that silver lining still surrounds a dark cloud. The amendment makes collecting medical debt less viable by prohibiting interest and fees, creates new violations of the statue, and requires collectors to determine whether litigation can be pursued by sending notice to and receiving evidence from consumers concerning their household income. The latter alone will require changes to collection letters, new procedures, and employee training.

It is ironic that while doctors are taught to find and address the root cause of an ailment, lawmakers continue to focus only on the symptom that is medical debt collection. Not only will this approach fail to cure rising medical costs, in the long run it may harm the consumers it aims to protect in the form of fewer healthcare options, increased costs, and declining quality of care.

HUTCHINSON, Kan. — National Credit Adjusters’ company services are rooted in their core values of integrity, honesty, and transparency. With offices in Kansas, Arizona, and Jamaica, the organization actively works within its local communities to promote better health and happiness. In April, NCA worked closely with its Jamaica office to launch an incredible food drive dedicated to providing food for the West Haven Children’s Home. 

Sophia Clough, a representative of NCA Jamaica, spearheaded the office’s involvement with West Haven and actively campaigned for the food drive. Along with the substantial amount of food purchased for West Haven, NCA donated 100 chicks to be part of the children’s meal plans. To round out this incredible donation, NCA reached out to QWater to donate bath soap, toothpaste, and sanitary products.

“This was an incredible effort from the Jamaica office. We are so proud of the work Sophia has done for West Haven and we are grateful for the incredible leadership we have at National Credit Adjusters’ Jamaica office for working with Sophia to raise funds. Starving children should never be a phrase we need to speak but the reality is we can all be doing more for the children of West Haven and we hope to continue to support them,” said Tyler Rempel, CEO of National Credit Adjusters.

NCA’s Continued Involvement

NCA’s mission is to bring integrity, professionalism, and the highest standards of compliance to debt servicing. This mission is underscored by the efforts of NCA’s Jamaica office. Each National Credit Adjusters office works tirelessly to improve lives in their local communities through various outreach programs, donations, and more. West Haven Children’s Home is a valued institution in Jamaica and the entire team is proud to serve in any way possible. 

About West Haven Children’s Home

West Haven Children’s Home is an orphanage for handicapped children in Jamaica. It was started in 1986 by a group that saw the need for a residential facility to assist children with disabilities to reach their full potential. The first cottage opened December 17, 1991; two more were opened in 1993; and the fourth cottage was opened in 2003. There are currently four fully operational cottages housing up to eighty children, ages three to twenty-seven years old, with a wide variety of abilities. This varies from children with mild Cerebral Palsy, Down Syndrome, and mental retardation to children with more profound handicaps. Full-time caregivers at West Haven provide all necessary care including physical therapy and education.

The ongoing operational costs of the home are supported, in part, by the Jamaican Ministry of Health. However, the largest daily support comes from continuing donations from local and overseas individuals and groups.

About National Credit Adjusters

Founded in 2002, National Credit Adjusters (NCA) is a private company dedicated to acquiring and managing delinquent consumer installment and online lending accounts. Through continuous research, automation, analytics, and process evaluation, NCA remains at the forefront of industry standards. Emphasizing strong performance and compliance, the company prioritizes ongoing employee development and quality training. Whether purchasing, servicing, or selling debt, NCA conducts all business with unwavering respect and fairness. For comprehensive information on their operations and to explore their commitment to ethical practices and industry leadership, visit ncaks.com.

The Court of Appeals of Indiana recently upheld a lower court’s decision that a debt buyer who purchased a portfolio of defaulted student loans and placed an account with a collection agency qualifies as a “debt collector” under both Indiana state law and the Fair Debt Collection Practices Act (FDCPA).

In Rock Creek Capital LLC (Rock Creek) v. Tibbett, Rock Creek filed a collection lawsuit against an individual to recover an unpaid student loan. The individual then filed a counterclaim alleging that Rock Creek was not licensed to collect consumer debt in Indiana and was thus engaging in illegal conduct in violation of the FDCPA and the Indiana Deceptive Consumer Sales Act.

In response to the counterclaim, Rock Creek both admitted and denied it was a debt collector as defined by the FDCPA and that it retained the services of licensed agencies and attorneys to collect only on accounts that are valid, due, and owing. It further contended that it “invests in debt, but leaves the ‘collection’ to actual debt collectors retained for that purpose.” Rock Creek then filed a motion for partial summary judgment, attaching a letter from a compliance officer for the Indiana Secretary of State stating that if a company is collecting debt owed to the company on its own behalf it would not qualify as a collection agency. “Collection agencies collect debts owed to others.”

After reviewing the definition of debt collector under the FDCPA and supplier under the Indiana Deceptive Consumer Sales Act, the lower court concluded Red Rock satisfied both. Ultimately, after looking at the evidence and reviewing the testimony of Rock Creek’s chief executive, including the statement that “Rock Creek’s business is buying defaulted receivables at a discount and trying to get those accounts to pay what is — what they owe,” the Appeals Court ruled that the company constitutes a “person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts,” under § 1692a(6) of the FDCPA. The court further concluded that Rock Creek constituted a debt collector under the Indiana statute.

On June 6, the U.S. District Court for the Northern District of Alabama ruled on dueling motions for summary judgment in a suit against a debt collection agency for alleged violations of the FDCPA. The plaintiff contended the debt collection agency improperly handled the reporting of two accounts to credit reporting agencies, one of which the debt collection agency failed to identify as disputed after receiving a dispute letter from the plaintiff’s counsel, violating both § 1692e and § 1692f of the FDCPA.

First, the court concluded that the plaintiff’s § 1692f claim was defective because it was duplicative of the § 1692e claim. A claim under the 1692f “catch-all” prohibition against unfair and unconscionable conduct must be supported to conduct “beyond that which [s]he asserts violates other provisions of the FDCPA.” Since the plaintiff offered no additional allegations beyond what was claimed to support the 1692e claim, the court granted the debt collection agency summary judgment on the § 1692f claim.

The court found that there was a genuine dispute as to whether the debt collection agency should have known that one of the debts was disputed, and denied summary judgment to both parties. Here, the plaintiff sent a dispute letter notifying the debt collection agency of a dispute “for all debts that [plaintiff] may have,” and then stated that “the above referenced individual(s) disputes the debt which you are attempting to collect.”

While the plaintiff alleged that the reference to “all debts” put the debt collection agency on notice of multiple debts being disputed, the debt collection agency halted negative reporting on the first account by matching the plaintiff’s name and social security number, it did not do the same for the second account because no matching information was provided. The court found that the dispute letter was ambiguous, and consequently denied motion for summary judgment for both sides.

NEW YORK, N.Y. — Kredit, the leading centralized debt resolution platform and network, is thrilled to announce successful achievement of SOC 2 Type 2 compliance. This significant milestone demonstrates Kredit’s commitment to maintaining the highest standards in data security and protection.

The SOC 2 Type 2 certification validates that Kredit has established and adhered to strict information security policies and procedures to protect sensitive data. This achievement is especially important for organizations that handle PII, as it ensures that Kredit has the necessary controls in place to safeguard data against security threats and breaches.

“Achieving SOC 2 Type 2 compliance is a major milestone for us,” said Dave Hanrahan, CEO & Co-Founder of Kredit. “It underscores our dedication to maintaining the highest level of security and trust with our partners. It is also a testament to our ongoing efforts to ensure the confidentiality, integrity, and availability of the data we manage.”

In today’s digital landscape, data security is of utmost importance, and organizations must adopt robust measures to safeguard sensitive information. By obtaining SOC 2 Type 2 compliance, Kredit not only meets industry standards but also demonstrates a proactive approach to ensuring data security and privacy.

About Kredit

Kredit is the leading centralized debt resolution platform and network. Its software applications help lenders, ARM organizations, and consumer financial advisors to simplify and modernize how debt gets resolved. Consumers can address all accounts in collections within a central platform that helps them understand, communicate with, and pay the various organizations they may need to interact with regarding one or many accounts.

For more information, you can contact Kredit here.

The debt collection industry is in a constant state of flux. The goal of the insideARM editorial team is to filter out the noise and pick the 3 pieces of news you need to hear each week. Last week we brought you a double helping of the CFPB and a legislative trend that is picking up steam. Continue reading for the highlights from the week of June 10th and why we felt it was important for you to see them.

We kicked off the week with an article about, surprise surprise, the CFPB. The Bureau maintained its momentum from an extremely active month of May by issuing Consumer Financial Protection Circular 2024-03 on June 4th. The guidance warned that terms and conditions in contracts with consumers may violate the CFPA’s UDAAP prohibition. The Circular and accompanying press release suggest that the CFPB will look to enforce this law “against companies…that deceptively slip these terms into their fine print.” While this reinforces what the CFPB thinks of debt collectors and those that provide consumer financial products, it also adds something else to consider when buying or agreeing to service/collect debt. The issuing of a circular on the topic means that enforcement action may be imminent.

On Wednesday, we highlighted an article on a new consumer data privacy law. This new legislation comes to us from Minnesota as they became the 18th state to enact legislation in this area. The language of this bill goes further than many previous states, bestowing on Minnesota consumers the right to investigate profiling issues and greater visibility into 3rd party disclosures of their data. Those operating or looking to operate in Minnesota will need to review the intricacies of this bill to ensure compliance. It is also important to see this law and the recent Minnesota Debt Fairness Act as an indication of the direction the state’s legislature is moving when it comes to consumer protection and debt collection.

Thursday brought more breaking news from the CFPB. The Bureau put out a proposed rule that takes aim at a hot-button topic in debt collection: medical debt. While the highlight of the proposal is the ban on reporting medical debt, the rule would also prohibit lenders from considering medical information in most eligibility determinations, ban the repossession of medical devices, and does not close the door on considering credit cards and installment loans as medical debt. This move by the CFPB should not come as a surprise as they have spent much of the last year discussing medical debt (here, here, here, and here for example.) For those in medical debt collections, the road to payment will become that much more difficult.

Thank you again for joining us for a recap of last week’s news. For more news from this month click here for a recap from the week of June 3rd.

Want to discuss the above, have a question about collections strategy, or simply need a vendor recommendation? insideARM’s Research Assistant holds a weekly peer call every Monday with other industry professionals like you! Click here to learn more about this meeting, how our library of resources could help you, and how you can try it all for free!

ROCHESTER, N.Y. — Continental Service Group, LLC d/b/a ConServe, in conjunction with the company’s “Matching Gift Program”, donated its March ConServe Cares proceeds to Foodlink. The ConServe team supports and funds the efforts of numerous local non-profit agencies that strive to make a difference. Due to the kindness and generosity of their employees, numerous lives in their community have been positively impacted and enriched.

“Foodlink is grateful to be a recipient of the ConServe Cares program this year. Funding from corporate partners like ConServe is critical to our ability to address food insecurity, helping support the cost of trucks, staffing, and of course the food that makes its way to dinner tables across the region. We can’t do this work alone – thank you for investing in our mission!”

George Huyler, Vice President of Human Resources at ConServe.said “Our mission statement emphasizes the significance of contributing to their communities, including making them healthier. We are proud of our employees for consistently stepping up to give back, and we are grateful to Foodlink for the vital services they provide every day.”

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 38 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 

About Foodlink

Foodlink is a Rochester-based nonprofit dedicated to ending hunger and building healthier communities. We serve as the hub of the emergency food system across a 10-county service area and administer many programs and initiatives that address the root causes of food insecurity, including chronic poverty and systemic racism. 

Foodlink provides food assistance through the safe storage and distribution of emergency food to our network of food bank members and community partners. Builds healthier communities through innovative programs that create new access points to nutritious foods and empower people to make healthy choices. Drives change through bold career empowerment initiatives and advocacy for a more just, equitable food system. 

Learn more about how we are transforming lives and creating healthy futures for every community we serve at www.FoodlinkNY.org.

On June 11, the Consumer Financial Protection Bureau (CFPB or Bureau) released a proposed rule amending Regulation V, which implements the Fair Credit Reporting Act (FCRA), concerning medical debt. The proposed rule would remove a regulatory exception that currently allows creditors to obtain and use information on medical debts for credit eligibility determinations. Additionally, the proposed rule would generally prohibit consumer reporting agencies (CRAs) from furnishing consumer reports containing medical debt information to creditors. Comments on the proposed rule are being accepted until August 12, 2024. The Bureau aims to finalize the rule by early 2025.

According to the CFPB, unlike voluntary consumer debt (mortgages, credit cards), medical debt often arises unexpectedly and can lead to financial hardships. The CFPB stated its belief that medical debt information is frequently inaccurate on consumer reports due to the complexity of medical billing, insurance, and other third-party reimbursement processes. These inaccuracies can adversely affect consumer’s ability to obtain credit, according to the CFPB.

The Bureau also remarked that its research indicates that medical debt has limited predictive value for credit underwriting purposes. Consequently, the CFPB believes that the current exception allowing creditors to use medical debt information is neither warranted nor consistent with the intent of the Fair and Accurate Credit Transactions Act of 2003 (FACTA).

According to the CFPB, the proposed rule aims to close the “regulatory loophole” that has kept medical debt information in the credit reporting system. The CFPB shared that its analysis shows that medical debts make underwriting decisions less accurate and lead to thousands of denied applications on mortgages that consumers would repay. The CFPB expects the proposed rule would lead to the approval of approximately 22,000 additional mortgages every year. The CFPB further estimates that Americans with medical debt on their credit reports will see their credit scores rise by 20 points, on average, if the proposed rule is finalized.

Key provisions of the proposed rule, include:

• Removal of the Financial Information Exception: The proposed rule would eliminate the broad exception that permits creditors to obtain and use medical financial information, including medical and dental debt, for credit eligibility determinations. Lenders would still be able to consider medical information related to disability income and similar benefits and medical information relevant to the purpose of the loan, if certain conditions are met.

• Restrictions on CRAs: The proposed rule would limit the circumstances under which CRAs can furnish medical debt information to creditors in connection with credit eligibility determinations.

• Ban on Repossession of Medical Devices: The proposed rule would prohibit lenders from taking medical devices as collateral for a loan and from repossessing medical devices, like wheelchairs or prosthetic limbs, if people are unable to repay the loan.

Notably, the proposed rule does not address medical debt paid for with any third-party financing options, such as credit cards or installment loans. However, the Bureau is accepting comments and is considering action on that front as well.

Also, this proposed rule is only one prong of the CFPB’s proposed FCRA amendments. Another prong contemplates regulating information that data brokers can sell. As discussed here, the Bureau is considering limiting “data brokers” and “data aggregators” to only be able to sell data for permissible purposes allowed by the FCRA — principally for eligibility determinations for credit, insurance, or employment. Under such future rules, the use of data for product improvement and identity verification to access an online account, for example, would be prohibited absent the consumer’s written authorization. We expect a proposed rule in this area later this year.