On April 1, 2021, the Supreme Court released its unanimous decision in Facebook v. Duguid, holding that to be considered an ‘automatic telephone dialing system’ (Autodialer), equipment must have the capacity to either: (1) store numbers using a random or sequential number generator; or (2) produce numbers using a random or sequential number generator. Although this new clarity regarding the definition of an Autodialer will help accounts receivable entities ensure compliance with the Telephone Consumer Protection Act (TCPA), it does not signify an end to TCPA litigation, and no one should be throwing away their TCPA policies and procedures just yet. 

The Statute and History of the Facebook Case

The TCPA prohibits “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 systems or an artificial or prerecorded voice” to cellular telephones. 47 U.S.C. § 227(b)(1)(A)(iii). An Autodialer is defined as “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Id. at § 227(a)(1)

The Facebook case was the result of unwanted text messages. Facebook has a security feature wherein users can elect to receive text messages when there is an attempt to log in to the user’s account from a new device or browser. Facebook sent such texts to Noah Duguid, but Mr. Duguid never had a Facebook account. After trying unsuccessfully to stop the unwanted messages, Mr. Duguid filed a putative class action against Facebook, alleging Facebook violated the TCPA by storing numbers and programming its equipment to send automated text messages. Facebook countered that the TCPA did not apply because its technology does not use a “random or sequential number generator.”

The Northern District of California agreed with Facebook and dismissed Mr. Duguid’s amended complaint with prejudice. The Ninth Circuit Court of Appeals disagreed and held that to be an Autodialer, equipment need only have the capacity to store numbers to be called and to dial such numbers automatically. This ruling was in line with decisions in the Second and Sixth Circuits but in contrast to decisions in the Third, Seventh, and Eleventh Circuits.  The Supreme Court agreed to hear the case to resolve the split amongst the Courts of Appeal.

The Ruling

Unlike so many previous TCPA decisions, the Court did not waste any time dissecting the meaning of the word “automatic” or analyzing how much human intervention was the right amount of human intervention. Instead, the opinion delivered by Justice Sotomayor focused on the statutory language, rules of statutory construction, and the intent of Congress when it enacted the TCPA in 1991. 

Beginning with the text of the statute itself and the rules of statutory construction, Justice Sotomayor reasoned there is no grammatical basis for arbitrarily stretching the phrase “using a random or sequential number generator” to apply to the word “produce” but not to the word “store’. Thus, reasoned Justice Sotomayor, to be an Autodialer, in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator. 

Turning to the Congressional intent, the Court pointed out that in 1991 Congress targeted a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity. In light of the precisely carved out intent, Justice Sotomayor explained, “expanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when congress only intended to use a scalpel.”  She further noted that under the broad definition proposed by Mr. Duguid, even an ordinary cell phone could be considered an Autodialer in the course of commonplace usage.

Mr. Duguid argued that cellphones are not autodialers under his legal theory because they rely on human intervention.  The Court expressly rejected this proposition, reasoning that all devices need some kind of human intervention, and the TCPA does not require such a difficult line-drawing exercise. Instead, the Court held that “a necessary feature of an autodialer under §227(a)(1)(A) is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.”

No, TCPA Litigation is not dead

While certainly a win for the industry and hopefully a catalyst for a reduction in TCPA litigation, the Facebook decision does not foreclose all avenues for recovery under the TCPA. In footnote 7, the Court provided an example where equipment might still qualify as an Autodialer if it uses a random number generator to determine the order in which to pick phone numbers from a pre-produced list and stores those numbers to be dialed at a later time. Further, the holding still allows for TCPA plaintiffs to make capacity arguments and does not affect the statutes’ separate prohibition on calls that use an artificial or prerecorded voice.  

As stated by Dave Schulz, a partner in the law firm of Hinshaw & Culbertson, “The ruling is completely consistent with the text of the law, and it is consistent with what a number of Circuit Courts had held. It (the ruling) should have a significant impact on TCPA litigation. All of our clients in the accounts receivable industry are not using an [Autodialer] pursuant to the Court’s decision. Calls by those companies to customer’s numbers will not be a violation of the Act. The ruling does not impact whether a pre-recorded message was left on a cellphone without consent. Those are fairly common claims and we still see them.”

Additionally, there is an open question regarding what, if anything, Congress will do in response to the Facebook ruling. As pointed out by TCPAWorld’s Eric Troutman, the Facebook ruling might provide a window for the industry to show it can self-regulate on this issue.

insideARM Perspective

Accounts receivable entities should proceed with caution. While the decision is positive, it does not provide a basis to abandon the safety measures which have been so painstakingly put in place. Because TCPA attorneys may dress former TCPA claims up in different legal theories or pursue perceived holes left in the Facebook decision, industry players should continue to rely on their current equipment, processes, and procedures. Further, entities should verify that their equipment does not have the capacity to store numbers using a random or sequential number generator or produce numbers using a random or sequential number generator. Because the ruling does not affect pre-recorded messages, accounts receivable entities should continue to obtain consent before leaving prerecord voice messages.

Good morning TCPAWorld

Well it’s Day 1 PF (post-Facebook).

Here is where we are:

• As Paul reported last night, Congressional Democrats have already promised to move forward with legislation to reverse Facebook’s effect, which is weird since no one knows precisely what those effects will be yet. (And nobody should be passing any TCPA-related laws without talking to the Czar, first–let’s get it right this time). 

• While I have my doubts that any Congressional “fix” will take place in the short term–the effectiveness of carrier-blocking technology has really blunted American rage at robocalls, even as it has stifled lawful speech at times–I have urged LeadsCouncil to push for self-regulation among industry participants to avoid future legislation/regulation.

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• Meanwhile P2P vendors are now terrified that their products have gone from essential to obsolete in the wake of Facebook. Given the ruling’s dangling threads of “capacity” and footnote 7 arguments, I suspect P2P vendors will have an important place in the market for a long time to come.

• Relatedly, all eyes are currently on the FCC, which is now expected to issue a ruling on its long-awaited TCPA Public Notice proceeding in short(ish) order. While the ruling will undoubtedly track Facebook on ATDS issues it will be critical to see how the new-look Commission (currently headed by Commissioner Rosenworcel as Acting Chairwoman) addresses “capacity” and foonote 7, if at all.

• Perhaps even more importantly, I’ve invited everyone’s favorite–the Kingmaker–to join the big webinar today. Also excited to have Manatt’s Christine Riely joining us along with Amy Brown Doolittle– the Grand Duchess and the flat-out best litigator I know–on the big show today.

• Speaking of today’s show, I’m hearing its all booked up (no surprise)–sorry if you missed the chance to register–although its worth trying I guess. For those of you that got past the velvet rope feel free to send me some pre-game questions. I’ve collected a few REALLY good ones already.

• Finally, yesterday was the biggest day in TCPAWorld.com’s history with massive record-breaking traffic. We’re up to over 138,000 unique visitors to the site-which is just flat incredible.

I’ll keep you updated as things develop.

CHESAPEAKE, Va. — Spring Oaks Capital, LLC has hired Keith Walch as Chief Acquisitions Officer.  In this role, Keith will be responsible for developing client relationships and leading the day-to-day operations of the acquisitions team.

“We are thrilled to welcome Keith to the Spring Oaks Capital management team,” states Tim Stapleford, President & CEO.  “He brings a wealth of real-world experience to the role of Chief Acquisitions Officer, and will play a vital role in delivering the Spring Oaks story and value proposition to clients from his unique perspective as someone who has built an asset sale operation from scratch at Prosper Marketplace.“

Walch joins Spring Oaks Capital with over 20 years of experience, including MBNA, Wells Fargo Auto Finance, and Barclaycard.  He spent the last six years at Prosper Marketplace, where he was responsible for the design and operation of their recovery model, including debt sales, third-party agencies, and legal recovery.   

“After spending my career on the creditor side, it seemed both challenging and natural to join the Spring Oaks Capital team on the debt buyer side of the asset sale marketplace,” says Walch.  “Spring Oaks Capital brings a fresh, technology-driven, and compliance-focused energy and presence to the marketplace, and I’m very excited to join the leadership team.” [article_ad]

About Spring Oaks Capital, LLC

Since 2019, Spring Oaks Capital has been buying portfolios from several sellers and creditors that want better pricing for their accounts without compromising on compliance or their brand. Building an innovative, refreshing and equitable vision that provides positive optionality around consumer debt obligations has been key to their success. Spring Oaks Capital leverages a differentiated culture and leading-edge technology to offer more competitive pricing. Spring Oaks Capital is an innovative and technology-focused consumer debt purchasing company spearheaded by a group of well-known and respected industry executives, who hold decades of experience at some of the largest banks, debt buyers, and collection firms in the United States.

Facebook Wins!  In a unanimous decision in the case of Facebook v. Deguid, the Supreme Court held, “To qualify as an ‘automatic telephone dialing system’ under the TCPA, a device must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator.”

This ruling overturns the previous ruling from the 9th Circuit, which broadly defined automatic telephone dialing systems as any equipment that has the capacity to store and automatically dial numbers, even if those numbers were not dialed randomly or sequentially. 

The full opinion can be found here. This narrow reading has the potential to cut down TCPA class actions significantly.  We are reviewing the case and will provide more analysis soon. 

Today I’m interviewing Jesse Bird, CTO and co-founder of TCN, a hosted contact center software company specializing in highly regulated industries. I must tell you that Jesse is not only one of the most well-read people I have interviewed — but one of those rare individuals who actually remembers what he read and applies it to his current context. Watch our interview about his personal approach to innovation, or read it below.

Stephanie Eidelman:

Jesse, thanks so much for joining me today. Let’s start with a little bit about your background and how you got to where you are.

Jesse Bird:

That’s a good question. I’m not even sure how I got to where I am, but for all of my adult life, I’ve been in the contact center space. So TCN is my first real job. I don’t have paper routes or Turkey farming. And, I got started doing this very, very young. So I’ve been in this business probably longer than anyone who’s as young as I am has been. I’ve been doing this for about 22 years. So, contact centers, hosted contact centers, internet companies. That’s basically all I know. It’s all I do.

Stephanie Eidelman:

Wow. 22 years. With all of that knowledge, let’s dive into the topic of “think differently”, which is what this series is about, and let’s talk about your company’s approach to innovation versus its approach to incremental improvement. What can you tell me about that?

Jesse Bird:

I thought about that question, and one of the things that I would say is I would flip it on its head. I’m not sure that there’s a difference between incremental improvement and innovation because, in my opinion, all innovation is incremental improvement. The biggest difference is the time horizon that you look at. Maybe a better question would be, how do I view radical progress versus incremental progress, even though I’m not really sure that there is a lot of radical progress. I believe that almost everything is incremental.

You look at some of the big epiphanies that people talk about and while they’re real and epiphanies happen and I’ve experienced my fair share of aha moments, I don’t think I’ve ever had one that wasn’t fronted with a certain amount of effort, work, experimentation, observation, some trials, some errors, some pain and suffering, some blood, sweat, and tears, all of the above, and then it clicks and you get it and you look back and you say, well, how did I get from A to B or how did I get from here to there?

Jesse Bird:

And it feels sudden from the outside, but from the inside, when you’re in the trenches, it’s really not that sudden. One of my favorite quotes and I share this with my team pretty often is by a man named Elbert Hubbard: 

“Genius is often only the power of making continuous effort and the line between failure and success is so fine that we scarcely know it when we pass it. Sometimes we are on the line and we don’t even know it.”

So I tell my team often that you can’t stop because you think you failed. You just need to figure out a different way to approach the problem.

Stephanie Eidelman:

That’s so interesting. I’ve noticed too that paying attention is really important. It could be that you’ve encountered an innovation or a change in paradigm. And if you’re not paying attention, you might not realize it as an opportunity or as a different way of thinking about something.

Jesse Bird:

Yeah. I’m not old yet, but I’m getting there. And every year that passes, I really find myself understanding a little bit more fundamentally Aesop’s Fable. You know, the one with the tortoise and the hare? The tortoise always wins in life. Maybe not always, but that’s the general rule.

Stephanie Eidelman:

Slow and steady wins the race.

Jesse Bird:

Yeah. I mean, sustainability of effort, see improvement, clarity of vision — that’s typically what’s going to win. And I don’t mean that you should move slowly. That’s what some people think when you imply tortoise. But I do mean that you should move every day. And one of my big things with my team is you should be better at your job today than you were yesterday.

Stephanie Eidelman:

The next topic is, how do you make sense of chaos? Do you have an example of that in your organization?

Jesse Bird:

The thing that you need to remember is things are chaotic mostly because you don’t have enough context. One of the first things that I would do if something is chaotic is to change the scope. Maybe you’re viewing the problem too holistically, and by zooming in on a problem — a specific problem — you might find something that you can start making sense of. Or maybe you’re too myopic. You’re too narrowly-focused or you’re too widely focused, or you’re too zoomed in on the issue. And so you zoom out to the macro level and you can realize that things are connected in a way that you didn’t previously understand. And that starts to provide some help for how these things are connected, right? You maybe look at roads and highways, especially down in Los Angeles, which I love driving in. And they make no sense at all. But if you view them from overhead, you say, I understand how these things are connected at least. And so if you change your focus, change your scope, you can apply some new contexts and help you understand from different angles. Another thing is to examine the why’s. What’s causing the chaos right now? Chaos is not really an event. Chaos is a result of something. So, is there an outage?

Stephanie Eidelman:

As you’re talking it makes me think that another form of chaos we all face today is the chaos of all kinds of information coming at us constantly and the need to feel on top of it and the need to feel like you have to process it all in order to know what to do and to make the right choices. How do you and your organization think about that? How do you take in all the information?

Jesse Bird:

I don’t think that you can take in all the information. You can sort through it and find things that are useful. Here’s a good example. This is an insight into my brain; it doesn’t work very well, but you know Isaac Asimov? He’s a science fiction writer. He wrote a short story called The Last Question. It’s actually one of my favorite short stories. It starts with two characters who built a machine called the Multivac. The Multivac is like this artificial intelligence machine. And it’s described as the self-adjusting, self-correcting machine. We talk about AI today and that’s kind of what the gold standard is. It can take input data, it can correct itself. And he described it as being like, this is the only way they could build this machine because there was no way that a human could process all the information and correct it quickly enough or adequately enough in order for it to do its job.

And the story takes off and tells the history of like 7 trillion years from Isaac Asimov’s point of view. I love the last line in the short story — Let there be light. Start all over. But, a lot of times we find ourselves in the position of these two guys, and we should hold off. Like there may not be things you should change. A lot of chaos stems from the fact that we are trying to control the things that we cannot, and maybe that we should not. So usually what I will tell my team is you should solve the problem that’s directly in front of you first, and then look for low-hanging fruit that has some high impact. Is a server down? Well, let’s get the server up and then we can figure out why it was down. Barring that, find the smallest problem that you can solve. Solve that, and things start snowballing. You don’t need to understand everything all of the time.

Stephanie Eidelman:

What current industry problems do you think are going to require the most innovative solutions?

Jesse Bird:

I don’t want to burst anyone’s bubble, but I actually just think it’s keeping up. Maybe I over-simplify things a bit, but legitimately I think that a lot of people’s concern. Especially in agencies that are less than a hundred seats where they don’t have a huge amount of resources. You just think about the number of things that they’re expected to do. They’re expected to apply AI. They’re expected to apply big data. They’re expected to tackle stir/shaken. They’re expected to move their agents to home. They’re expected to comply with an ever-increasing amount of government regulations and client risk profiles. They’re expected to empower their agents. And then they’re expected to trust their agents and they’re expected to manage their costs. Then they’re expected to tackle big data and produce reports.

Stephanie Eidelman:

The baseline has gotten very high.

Jesse Bird:

Yeah. The table stakes are now raised. Like the big blind is no longer $5. And if you want to play in the game, you’re gonna have to bring a lot more to the table. And so for some of these customers, I think that’s the theme. You may not be in a research and development role full-time. I find myself doing a lot of research and a lot of development, and I don’t even do it full-time and there’s a lot more research than I can possibly do. That’s going on all around me. And so you need to take what’s being done and figure out how it applies in your life, figure out how you can utilize that to move forward. So, for a long time, that’s what TCN’s approach has been in technology. We need to approach the technology in a way that we can democratize it.

We need to make it available to people that it’s not generally available to, to help them be successful in their business. So that firms large and small and have access to basically the same technology that allows them to run the business effectively. I think especially on the smaller companies, that’s a huge concern. I’ve spoken personally to several dozen firms that are really concerned about stir/shaken. They just don’t understand how that’s going to apply. And so what we do is we say, well, you don’t need to worry about it. That’s something that we’re going to handle and you can operate your business. And I don’t know, maybe we have a little bit of a superhero complex in that regard because for a long time TCN had to punch above our weight, in terms of the types of technology solutions that we could deliver because we didn’t really have the size.

So companies big and small really shouldn’t be stuck in terms of technology. Small companies, especially, shouldn’t need to give up anything to large companies in terms of technology, because they should be able to take advantage of the things that are out there. So, yeah, generally speaking, I think that’s probably the biggest problem is how will the industry manage complexity?

The world’s constantly changing and it’s changing under constant acceleration. And I’m not sure we have the terminal velocity. I don’t know where that terminal velocity is. You know, the thing with gravity is you accelerate until you reach that terminal velocity. I don’t know if we’re going to hit it. I imagine those that are really innovative and really successful in our industry, from my point of view as a software vendor, are going to be those companies that can wrangle the complexity, make it simple enough to understand, and flexible enough to solve the problems you need to solve. A big problem is cost. It needs to be inexpensive enough to be applied and forward-thinking enough not to fall behind. If you can hit all those things, you’re going to look back and say, wow, not only did I keep up, I actually thrived. I was really, really innovative.

Stephanie Eidelman:

Well, there’s the roadmap right there. So if you were taking notes, you’ve got your plan. Jesse, you are such an interesting person. We hadn’t met before face-to-face and it was such a pleasure and you are incredibly well-read and have super interesting references. It was great to talk to you.

Jesse Bird:

Good. I’m glad that we could have this time. 

The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2021 members include:

SACREMENTO, Calif. — The RMAI Certification Council announces the adoption of version 9.0 of the Receivables Management Certification Program (RMCP) after an eight-month development and review process. Several significant enhancements were added to the program in version 9.0, including requiring Certified Businesses to:

• Avoid the solicitation or attachment of government emergency relief funds (not limited to COVID-19).
• Maintain a formal Consumer Hardship Policy that is activated with a declared state of emergency.
• Adhere to robust criteria when working in a “virtual office” or a “work-from-home” scenario.
• Refrain from accruing interest on credit card accounts after charge-off and prior to judgment.
• Expand data security requirements regarding offsite access to the Certified Company’s network.
• Have in their possession all appropriate documents when attending court hearings and be prepared to provide the same information to the court.
• Attend courses ensuring the elimination of bias in debt collection.

“RMAI continues to be the industry thought leader in advancing comprehensive and uniform standards of best practice for the receivables management industry,” said Jim Mastriani, President of the Receivables Management Association International (RMAI). “Through the certification of debt buying companies, collection agencies, collection law firms, brokers, and vendors, RMAI is offering the industry a single compliance footprint that sets high-level professional standards for the entire life cycle of accounts receivables. This is an invaluable resource not only for the industry but also the consumers we serve.”

For more information on RMAI certification for receivable businesses and individuals, please visit the RMAI website at www.rmaintl.org/certification.

About RMAI
Receivables Management Association International (RMAI) is a nonprofit trade association representing more than 550 companies that purchase or support the purchase of performing and nonperforming receivables on the secondary market. The RMAI Receivables Management Certification Program and Code of Ethics set the global standard within the receivables industry due to the rigorous uniform standards of best practice which focus on protecting consumers. More information about RMAI is available at www.rmaintl.org.

DURHAM, N.C. — Longshore Capital Partners (“Longshore”) and its portfolio company, Revco Solutions (“Revco”), are pleased to announce the acquisition of ARMC Financial Services (“ARMC”). Based in Oradell, NJ, ARMC is a healthcare revenue cycle management company that specializes in denials management, helping hospitals collect revenue that is improperly denied by insurance carriers. The acquisition of ARMC provides Revco with broader geographic coverage and an additional service to offer its healthcare clients. In conjunction with Revco’s early out self-pay AR management services as well as primary and secondary bad debt collections, the ability to now offer an insurance denial management solution positions Revco as a full-service healthcare revenue cycle management organization. 

Revco’s CEO, Geoff Miller, commented, “ARMC’s denials management expertise allows Revco to enter a highly attractive niche of the revenue cycle to better serve its existing clients who have a need for these capabilities. We are excited to welcome the ARMC team into the Revco family.”

Ryan Anthony, Partner at Longshore, added, “The acquisition of ARMC represents an important step toward achieving Revco’s strategic goal of broadening its service portfolio across the revenue cycle continuum.”

ARMC, located in Oradell, N.J. has been successfully recovering revenue for health systems, hospitals, and physician groups for over two decades. Their denials management solution enables healthcare providers to effectively increase revenue owed by insurance companies that would otherwise go uncollected as a result of improper denials.  

[article_ad] Jack Hoban, Chief Development Officer at ARMC, said, “We felt that our denial management expertise, processes, and systems were unique and first-rate. But to ensure our long-term viability and scale to a national presence, we needed to find the right strategic business partner. After an exhaustive search process, we are happy to become a subsidiary of Revco Solutions.”

If you have questions regarding this transaction or would like to discuss partnering with Revco Solutions, please contact Geoff Miller of Revco at geoff.miller@revcosolutions.com or (919) 971-2313.

About Revco Solutions

Revco Solutions is a new name in collections that has been built on a foundation of proven solutions. Created by the acquisition of Professional Recovery Solutions and Credit Bureau Collection Services in 2019, we bring over a century of collection experience to the healthcare industry. Our combined organizations manage billions in placements annually from hundreds of physician practices, hospitals, and health systems, including several of the top-ten largest non-profit systems in the country. To learn more visit www.RevcoSolutions.com.

Show Notes:

Credit Eco to Go welcomes Amy Mertz Brown to the podcast to continue our celebration of #womenshistorymonth2021. Amy was one of the first hires at the CFPB where she helped establish and build the agency’s in-house legal department. Amy worked closely with initial CFPB leadership including Elizabeth Warren, the Bureau’s first confirmed Director, Richard Cordray, and with Rohit Chopra, who is likely to be confirmed as the next Director in the coming weeks.

Amy shares her insights about Chopra’s leadership style and what she believes his priorities will be as the Bureau develops under his direction. Spoiler alert: policy will drive Chopra’s agenda, so industry needs to be engaging the Bureau now. 

DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests or Clark Hill PLC. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.

CHADDS FORD, Pa. — Katabat, a leading global provider of debt management software solutions and Bridgeforce LLC, an international financial services consultancy, today announced a formal partnership aimed at delivering new levels of implementation support for Katabat’s managed service debt collection software products.

With technology playing an increasingly critical role in the collections industry, debt collection strategies, processes and communication methods all require adjustments in order to meet customer needs and regulatory requirements. The augmented implementation services offered to Katabat clients by Bridgeforce allows companies to quickly optimize Katabat’s proven software platform to enable speed to ROI.

“We are always looking for new ways to bring value to our global Katabat clients,” said Ray Peloso, President and CEO of Katabat.  “Bridgeforce has a world-class reputation and capability set with debt management solutions, so we look forward to a strong partnership that better serves each company’s clients.”

Katabat is a recognized global leader in cloud-based debt collection managed service software products. Founded by consumer lending experts and with a leading market position with first-party lenders, the Katabat platform helps clients synchronize customer offers, implement customer workflows, and build integrated content and treatments across all customer channels. Powered by machine learning, Katabat’s products are easily deployed to enable speed to ROI for its clients, and its products ensure full compliance with policy and regulatory guidance.

John Sanders, CEO at Bridgeforce said, “Given Katabat’s continued investment and advancement in its product offerings, combined with the deep operational and implementation expertise at Bridgeforce, it is with great enthusiasm that we formalize this strategic partnership. Together, we expect to deliver exceptional and results-based solutions to the industry in an efficient and effective manner.”

Bridgeforce’s team of experienced consultants, over 90 percent of whom have hands-on experience working inside of lending organizations, drive results in collaboration with client teams throughout the credit lifecycle. Within collections, the firm helped clients pioneer digital efforts in the early 2000s, adapt to the regulatory changes of the past decade, and now assists clients with the latest wave of digital adoption and process changes to respond to customer and regulatory demands.

About Katabat

With more than a decade of experience delivering debt collection solutions to global banks and debt collection agencies, Katabat combines collections and machine learning expertise to help clients engage with customers and increase collections. Katabat partners with lenders and collectors across multiple industries to stay at the cutting edge of debt management, machine learning, automation, regulatory compliance, and data security. To learn more about our full range of debt management products, contact Katabat at info@katabat.com.

About Bridgeforce

Over the last 20+ years, Bridgeforce has helped organizations:

• Bridge gaps between operations and technology
• Translate business vision into the outcomes supporting the vision
• Design new data-driven processes that support achieving those outcomes
• Enhance and transform operational needs from end to end
• Embed control and compliance
• Successfully complete projects within expected timeframes and agreed budgets

A 95% client re-engagement rate illustrates that Bridgeforce has the knowledge and experience to make the hard choices in developing and implementing best-fit solutions that are both achievable and lower the risks of execution to ensure sustainability. For more information, visit www.bridgeforce.com.

On March 15, West Virginia Delegate Danny Hamrick, joined by 10 other Republicans, introduced House Bill 3159 which is consumer data privacy legislation similar to the California Consumer Privacy Act (CCPA), though arguably less business friendly.

Applicability

The legislation applies to businesses doing business in West Virginia that collect consumers’ personal information (PI), determine the purposes and means of processing the PI, and:

1. Have global gross revenue over $25 million; or
2. Annually buy, receive, sell, or share the PI of 50,000 or more consumers; or
3. Derive 50 percent or more of global annual revenues from selling or sharing PI.

This aligns with the CCPA thresholds.

Consumer Rights

The legislation provides consumers with the right to:

1. Know PI collected;
2. Know PI sold or shared;
3. Opt-out of the sale or sharing of PI to third parties;
4. Correct PI;
5. Delete PI collected from the consumer, subject to certain exceptions.

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Again, from the CCPA playbook, a business may deny a request to delete if the PI is necessary to:

1. Complete the transaction for which the personal information was collected;
2. Fulfill the terms of a written warranty or product recall;
3. Provide a good or service requested by the consumer, or reasonably anticipated within the context of a business’s ongoing business relationship with the consumer, or otherwise perform a contract between the business and the consumer;
4. Detect security incidents, protect against malicious, deceptive, fraudulent, or illegal activity, etc.;
5. Debug to identify and repair errors that impair existing intended functionality;
6. Engage in public or peer-reviewed scientific, historical, or statistical research in the public interest, with the consumer’s consent;
7. Enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer’s relationship with the business;
8. Comply with a legal obligation;
9. Otherwise internally use the consumer’s personal information in a lawful manner that is compatible with the context in which the consumer provided the information.

Exemptions

The legislation provides no exemptions, unlike the CCPA which provides exemptions for PI governed by, or collected, processed, sold or disclosed pursuant to other state and federal acts that protect PI, including the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act and the Health Insurance Portability and Accountability Act rules relating to data privacy and security.

Contract Requirements

The legislation mandates certain contractual requirements between businesses and service providers and between businesses and third parties.

With respect to service providers, the contract must prohibit:

1. Selling or sharing PI;
2. Retaining, using or disclosing PI for any purposes other than those specified in the contract;
3. Retaining, using or disclosing PI outside of the direct business relationship between the business and service provider;
4. Combining PI that the service provider receives from the business with PI it receives from another person or entity, or that the service provider collects from its own interaction with the consumer, except that the service provider may combine personal information to perform any business purpose.

The contract prohibitions with respect to third parties are the same, except the fourth prohibition above is not included. This may be a drafting error as the second prohibition above is recited twice in the list of third party contractual prohibitions (§ 46A-9-8(e)(2) and (e)(3)).

Private Right of Action

The legislation provides a private right of action when a certain information that would allow access to a consumer’s account “is subject to an unauthorized access and exfiltration, theft, or disclosure as a result of a business’s violation of the duty to implement and maintain reasonable security procedures . . .” Damages per incident are the greater of actual damages or an amount “not less than $100 and not greater than $750.”

Attorney General Enforcement

For any alleged violation that is not cured within 30 days of notification, the Attorney General may seek a civil penalty of not more than $2,500 if unintentional and $7,500 if intentional.

Impression

It is interesting that the Virginia legislature, controlled by Democrats, enacted a Consumer Data Protection Act that many would consider to be fairly moderate, while the Republicans who control the legislature in West Virginia opt for a version more onerous than the CCPA.

For more information and insight from Maurice Wutscher on data privacy and security laws and legislation, visit https://mauricewutscher.com/data-privacy-and-security/.