ROCKVILLE, Md. — iA Strategy & Tech – a conference for executives in receivables strategy – returns in 2021 with a focused, cutting-edge agenda entirely focused on the latest trends, data and tech behind receivables strategy. 

Key sessions will zero in on the future of channel optimization, consumer preference, data management for strategic flexibility, optimizing inbound call handling, new trends and strategies for consumer outreach, and much more. See the full agenda here.

“iA Strategy & Tech is really designed to give executives in receivables – both creditors and agencies – a critical look at the ways sharp companies are revolutionizing strategy,” said Stephanie Edelman, CEO of insideARM. “The strongest companies are looking to maximize ROI with sophisticated tactics and by choosing and implementing the right new tech. That’s what we’ll dig into at iAST this year.”  

iA Strategy & Tech runs July 13-15, 2021 and is an entirely digital event – no travel required. 

Registration is now open and double-early-bird pricing is in effect. Find out more here.

Interested in speaking? We have a few open spots. See our full agenda and apply here.

Interested in sponsorship or demoing at iAST? Learn more here.

The practice of using a mail house to send demand letters to consumers is up for debate in the 11^th Circuit Court of Appeals. In 2019 insideARM first brought you the case of Hunstein v. Preferred Collection & Mgmt. Servs., No. 8:19-cv-983 (M.D. Fla. Oct. 29, 2019) upon its dismissal with prejudice by the Middle District of Florida. The consumer appealed the District Court’s decision, and on March 10, 2021, the 11^th Circuit heard oral arguments.

In Hunstein, the parties are squabbling over whether supplying a data file with consumer information to a mail house to prepare and mail a collection letter “relates to” the collection of a debt or whether sending such a file is “in connection with” the collection of a debt.  While this may seem like the splitting of proverbial hairs, this distinction is significant: if providing consumer data to a mail house merely “relates to” the collection of a debt as argued by counsel for Preferred Collection and Management Services, Inc. (Preferred), then the act of conveying this data does not violate the FDCPA. However, if delivering a data file is “in connection with” the collection of debt as argued by Mr. Hunstein’s counsel, this action may violate the FDCPA’s prohibition on third-party disclosure.

Mr. Hunstein’s counsel began his argument by comparing the mail house letter process to the act of making a peanut butter and jelly sandwich. Seriously.  Specifically, he opined that sending a letter template and separate data file to a mail house to merge is analogous to putting peanut butter on one piece of bread, jelly on another, and handing the two slices off to be put together by someone else. Using this comparison as a starting point, he explained to the court that the crucial factor is the intent of the action.  In the case of the two-part handoff of the PB & J, the goal is to make the sandwich for someone to eat; with the mail house, the objective is to have a third party merge and send a collection letter.  Thus, argued Mr. Hunstein’s counsel, since Preferred intended for the mail house to send a collection letter to the consumer, transmitting the data file is an act “in connection with” the collection of a debt.

The creative analogy used by Mr. Hunstein’s counsel appeared to make an impact.  Through a series of questions, Preferred’s counsel ultimately admitted the point of engaging the mail house was to generate and mail a collection letter, and it didn’t get any easier from there.   In response to Preferred’s contention that sending the data file was not “in connection with” the collection of a debt because it did not include a demand for payment, the panel pointedly asked whether this theory would render the exceptions found in 15 USCA 1692c(b) superfluous notably stating that under preferred’s theory these exceptions “no longer make sense.”  

The oral argument then shifted to a standing issue, which is also up for decision in the appeal.  There is no clear indication regarding how the panel will decide these issues; either one could influence the panel’s decision in its own right. 

insideARM Perspective:

This case is undoubtedly one to watch.  Anything other than a solid rejection of the consumer’s argument by the 11^th Circuit may induce copy-cat cases, or in a worst-case scenario, might cause many in the debt collection industry to rethink certain policies and procedures.  

In this episode, Amy Perkins, insideARM President, interviews Brad McCurnin, President of Harvest Strategy Group. Watch Amy’s conversation with Brad, or read it below.

Amy Perkins:

Thank you for joining us for today’s executive Q & A. We’re really excited to have Brad McCurnin, President at Harvest Strategy Group, with us today to talk about what’s going on in the litigation industry. Brad, I’m so happy to be here talking with you today. Let’s jump right in. What has Harvest Strategy Group been up to and what do you guys do?

Brad McCurnin:

Thank you. We were formed in 2007 with the idea of being an accounts receivable management company. We had a real emphasis from the beginning on the management part of that name because we really saw an opportunity in the marketplace to emphasize meaningful engagement in the whole process from beginning with our clients to the ending results of the portfolios that we manage. And we really had a unique offering at the time. And it’s still unique today in that we outsource 100% percent of our recovery to third-party collection agencies and third-party law firms. So we’re able to pick the best in the industry to develop, deliver the best results and really produce superior results for our clients. We also had a focus from the beginning on compliance and accountability. So, we knew with delivering outsourced providers and working with so many outsource providers who really had to document those results and report on them and have everything written so that we could monitor and manage the compliance of those results back to our clients.

Amy Perkins:

Yeah, absolutely. And I know compliance is such a huge part and has evolved a lot over the last few years in the litigation space. Can you update us on where that stands and how Harvest Strategy Group has adapted through the years to the change in regulation around litigation and other aspects?

Brad McCurnin:

It’s a really dynamic area, a changing area. When you look back to 2007, when we started, it’s an entirely different business, it’s an entirely different compliance perspective. I mean, today we have three certified compliance officers on our staff. It’s a critical component of the services that we deliver. And the CFPB really helped drive all that. I mean, it was 10 years ago that they were formed and really for the better. Our mission is zero defects compliance, delivering results for our clients. And, one other unique part of how we put that together is that we are focused on just management. We’re not a debt buyer. We weren’t from the beginning, and we still are not today.

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Brad McCurnin:

We’re not an agency and we’re not a law firm where we’re trying to serve certain footprint states and outsource the other. We’re offering end-to-end compliance management, where we can really come up with the best solution for our clients to have zero defects in compliance and maximum results. And it’s really compliance which has now become the number one focus of our clients and has been for years now, whereas prior it was recovering. So this remains our most important objective today.

Amy Perkins:

It’s hard to believe it’s been 10 years since a lot of that started. I said a few years, but wow. I guess time really does fly by! So I know, from my years of leading strategies, when we thought about litigation, we always seemed to think of it as litigation or sell. And sometimes we would have a blended strategy, but certainly, there were a lot of internal conversations and debates about the pros and cons of going down either of those routes. So how do you advise your clients in that area when they’re debating between those two strategies?

Brad McCurnin:

Yeah, we have those conversations a lot and it’s interesting to me. We’re, frankly, agnostic as to which of the strategies that we would employ, whether it’s agency litigation or debt sale. Not that we would employ…that our clients employ, and how we advise them on that. What we have is 13 years of data and 13 years of experience to work with our clients to come up with a unique strategy that is best suited to their objectives and to be compliant. And really when I look back on everybody we’ve worked with, there are no two strategies that are the same. No two scenarios are the same. Everyone has unique objectives, unique inventory. And since we’re not debt buyers and we don’t fall into these other categories, we’re truly portfolio managers. We’re able to help them come up with a strategy that meets their overall objective. And often wind up with a strategy that starts with a few agencies that are post-charge-off, then splits into a second tier, some going to litigation strategy, some going to an agency, and some of our clients also integrated debt sale at that point. So it really depends on their needs and objectives.

Amy Perkins:

Absolutely. I know when we would have those conversations internally, one aspect of looking at litigation versus sale is the timing of when you see something back, and that doesn’t necessarily equate to the overall value. If you look at the big picture, short-term versus long-term. But one thing we did get hung up on is really looking at how we picked the right accounts to go through potentially the litigation process or the sales process, or any of the other processes post charge-off for that matter. But litigation was always a little bit trickier. And at the time it was because we had a lot of judgmental overlays that we would put on top of the things we were able to know with data. And so it just became costly sometimes to even figure out who is the best choice to potentially go down that route. How do you help your clients? Or how do you advise them in that area?

Brad McCurnin:

Yeah, we have a product called ProScore, and it is designed to help identify the accounts that are best suited to go through a litigation strategy. That question was the first question on our minds 13 years ago, because you have to pick the right accounts. Putting the wrong accounts into a litigation strategy can be incredibly costly and, really damaging to the consumer relationship. The accounts that are best suited for litigation in our view are those that have gone through an agency strategy. They have been unwilling to pay and we want to pick those accounts that do have the ability to pay. Unwilling and the ability to pay are two critical factors there. Having gone through the financial crisis, and now the COVID crisis, there needs to be a strong element of listening to consumers, of being respectful of consumers who have a hardship or have a difficult situation.

And that all has to be part of the compliance and oversight process. ProScore is designed to identify those accounts that go into that right strategy. And what we’re trying to do is improve the net lift to our clients by using this technology and continuing with zero defect compliance as well. And it’s been a core part of our business. It’s a free scoring solution offered to all of our clients. And it’s been critical to navigating those very decisions that you just talked about.

Amy Perkins:

It sounds like you nailed both sides of that equation. You’re really figuring out who’s best to go through that process and how to make sure that you’re picking the accounts in a way that is compliant. So certainly lots of great things are happening across all the different channels, but you definitely have some great tools that have solved some challenges that I know have been out there for a while. So what now? What’s on the horizon for Harvest Strategy Group?

Brad McCurnin:

Well, we’re growing, we’re investing. We’re really looking for 2021 to be a very interesting year after an interesting year. Lots of challenges I think are ahead. You know, just a few months ago, we were looking at perhaps an explosion of charge-offs coming around the corner. I tell you looking at the data today, I think charge-offs might remain low for the rest of the year. We’ve got the new stimulus package just approved. I think those stimulus checks are going to be hitting consumer accounts as early as this weekend.

A lot of consumers are going to use those funds to pay off debt. We’re seeing it not only on the charge-off recovery side, but overall credit card balances are going down and that’s a counter-trend. Usually, credit card bills are going up as a whole, but now they’re going down. So we’re looking for an interesting year in that regard. We’re just having to monitor it and work with our clients to advise them on what we’re seeing on the recovery front, monitoring closely bankruptcy rates and foreclosure rates as those will inevitably start to come back at some level. It’s just going to be, I think another challenging year to be in touch with what’s actually happening in the marketplace.

Amy Perkins:

Absolutely. It should be interesting. It’s been a wild 12 months and I could see another 12 months, as you said. Well, thank you so much again for being here. Is there anything you would like to add that we didn’t touch on throughout our conversation?

Brad McCurnin:

I would just invite any creditors, banks, debt buyers that want to contact us to talk about their strategy and just get our input. We’re always open to discussing those and providing our input on how results and compliance can be improved.

Amy Perkins:

Very good. All right. Well, thank you again.

During the Trump administration, the Department of Education (ED) and state regulators developed a frosty relationship. For those who like to think of things in pop culture terms, the connection has been more Taylor/Kanye and less Simon/Daphne.

On March 9th, 2021, in an attempt to close the sizable rift between states and ED, the California Department of Financial Protection and Innovation (DFPI) joined eleven other states in a letter sent to newly confirmed Secretary of Education Miguel Cardona. The letter, penned by the New York State Department of Financial Services (DFS), congratulated Mr. Cardona on his confirmation and invited him to partner with states in their endeavors to protect student loan borrowers. In addition to DFPI Commissioner Manual P. Alvarez, regulators from Colorado, Connecticut, Illinois, Maine, Massachusetts, New Jersey, Rhode Island, Washington, and Wisconsin added their signatures.  

In the letter, the regulators asked ED to rescind certain policies described as “harmful”, “unsound”, and which “undermine the supervision of private companies that service federal student loans.” Specifically, the regulators asked ED to reverse (1) the federal preemption of state oversight of student loan servicers; and (2) the usage of the Privacy Act of 1974  to prevent state regulators from obtaining documents and other records, including loan servicer practices, which are necessary for industry oversight. 

Why are states pushing for ED to abandon these policies?

According to the March 9th letter, “[ED] is the nation’s leading student loan originator [and] contracts with private companies to service approximately $1.56 trillion in outstanding federal student loan debt.” There are 43 million student loan borrowers across the country, and student-loan debt is the second-largest class of consumer debt behind mortgage loans.  These loans are all serviced by private companies, which are often the borrower’s sole point of contact for managing their loans. 

The letter states,

“State oversight of student loan servicers generally focuses on servicing practices, not the nature of underlying loans, which may have been originated pursuant to a federal program or by a private lender. These servicing practices include, however, the execution of certain programs that are unique to federal student loans, such as income-driven repayment plans and Public Service Loan Forgiveness – areas central to documented servicer misconduct. As borrowers’ dedicated and often sole point of contact for their student loans, both federal and private, servicers’ unwillingness or inability to provide accurate and relevant information to individual borrowers and to guide them to the most cost-effective repayment options can have disastrous effects with few opportunities for recourse. States are well positioned to supervise this industry, but our ability to do so suffers without federal allies.“

In response to unlawful industry practices documented by the New York Times in 2017, many states, including California, enacted legislation regarding student loan debt oversight to protect consumers from harm. However, former Secretary DeVos’ policy positions have entirely cut off states’ attempts to gain visibility into student loan servicers’ practices, leaving regulators very much in the dark. 

“Over the past few years, California has worked to fill a void left by the federal government in shielding student loan borrowers from predatory practices.” Said DFPI Commissioner Alvarez, “With the confirmation of Secretary Cardona, we look forward to working anew with federal partners to protect California borrowers and help mitigate the ongoing student loan debt crisis.”

insideARM perspective

Two of the many complications involved in effective oversight of a $1.56 Trillion portfolio is that multiple technology platforms are involved, and there are dozens of loan programs, all with specific technical eligibility and process requirements. As a result, in 2017 ED initiated a project to develop a Next Gen program, including a complete overhaul of technology, process and contractors. The program had an extremely aggressive timeline which would be difficult even for the largest private company to meet. Progress has been made, but there have been changes in key leadership (including, of course, at the very top) and litigation over contract awards which have surely caused delays.

As for the relationship between the regulators, now that the Biden Administration has taken the reigns and Secretary Cardona has been confirmed, it would not be a surprise to see a more symbiotic relationship develop. Also, should Rohit Chopra, President Biden’s nominee for CFPB Director and former CFPB Student Loan Ombudsman, be confirmed, it is not far-fetched to imagine a scenario where he lends a helping hand.

On March 8, 2021, the Consumer Relations Consortium (CRC) responded to the California Department of Financial Protection and Innovation’s (DFPI) request for comment regarding the implementation of the California Consumer Financial Protection Law (CCFPL). Consistent with what appears to be a trend by individual states to create mini versions of the CFPB, California has enacted the CCFPL, which may ultimately affect receivables management entities across the industry.  

The DFPI asked stakeholders to comment on various topics to help identify issues and present potential solutions. Multiple industry groups submitted comments, including the Consumer Relations Consortium (CRC).  Comprised of more than 60 national companies representing creditors, data/technology providers, and compliance-oriented debt collectors, the CRC leveraged its multifaceted expertise in the receivables management industry to prepare comments for the DFPI, including suggestions regarding:

• Establishing clear and concise definitions which are consistent with other laws.
• Outlining the exact parameters regarding the types of debt and specific industries which will be subject to the CCFPL.
• Ensuring complaint procedures require certain information from consumers and allow entities sufficient time to respond to complaints.
• Creating a clear, transparent, and easy-to-follow licensing process.
• Evaluating the efficacy of disclosures before enacting any disclosure requirements
• Reviewing disclosures for consistency with other applicable laws 

You can download the final CRC comment letter here. 

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About the Consumer Relations Consortium

The Consumer Relations Consortium (CRC) is a membership group for forward-thinking organizations that wish to influence the direction of collections compliance, legal strategy, and regulatory policy. The CRC is comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers, and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors, and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC is managed by The iA Institute. 

Learn more at www.crconsortium.org.

About the iA institute

The iA Institute is a media company that provides news, education, events and connection for professionals in consumer finance. The iA team believes the value of your time and investment in our content should be undeniable, so we thoughtfully design everything we do with a focus on the details that make a difference. Our initiatives include the flagship website and newsletter insideARM; the Consumer Relations Consortium (CRC) and iA Innovation Council membership groups; the iA Research Assistant and Case Law Tracker premium subscriptions; the iA Strategy & Tech digital conference; and the uniquely engaging annual Women in Consumer Finance event. iA is a certified Woman-Owned business.

Learn more at www.theiainstitute.com. 

Rebekah Johnson, CEO, and Anis Jaffer, Chief Product Officer of Numeracle host a live Q&A podcast series covering all things related to call center communications, including call delivery, STIR/SHAKEN, caller ID technology, TRACED Act, brand identity, and more. In the episode below (transcript edited by insideARM; listen to the full episode here), they define caller ID authentication as required by the TRACED Act and explain how this relates to STIR/SHAKEN. In other words, how do you get that green “checkmark” to show up on your call to a consumer?

What does caller ID authentication mean in the context of the TRACED Act?

Rebekah: There are many ways to refer to caller ID authentication, such as verified ID, verified caller, accurate identification, authenticated caller identification, and so on. So really to understand the general concept, let’s look at the TRACED Act to learn where accurate caller information will come from.

What we find is actually a deadline for the FCC to define — not the term — but the best practices that providers of voice services may use as part of the implementation of their effective call authentication framework, which we covered in  “Debunking the June 2021 STIR/SHAKEN Deadline.” 

Anis: Sounds like we have more orders from the FCC. Is this the same deadline as the one for STIR/SHAKEN, or is this something else?

Rebekah: While there were plenty of orders that the FCC had to publish last year, this directive is more of a step back from an ‘order’ and is more of an industry ‘best practice’. So adherence is not necessarily a requirement, but this does mean that when it comes to accurately identifying the caller as part of the caller authentication framework, basically the FCC is saying: “You know better if you try to claim that you don’t.” 

We’ve seen ‘Best Practice’ before. CTIA has a ‘Best Practice’ for short code messages. Is this Best Practice publicly available, and who wrote it?

Rebekah: It is publicly available, and at the request of the FCC’s Wireline Competition Bureau, the NANC, via its Call Authentication Trust Anchor Working Group (or CATA Work Group), is the one who recommended the Best Practices.

Members of CATA are initially nominated to the FCC and then the FCC appoints the membership. So it’s the obvious participants: AHTUC, AT&T, Comcast, CenturyLink, Verizon, T-Mobile, and other participants such as Google and Telnyx, and TransNexus, just to name a few. What I love about this group is that this is the industry we work with, these are the who’s-who in the telecommunication space addressing this challenge. 

Just a little sidebar on this particular group, I had the extreme honor of being able to represent the Enterprises and the challenges that service providers have with these Best Practices, and I did see some of our recommendations get adopted into the Best Practices. It was a great group and they produced good work. 

What are some of the Best Practices?

Rebekah: When the FCC identified this group and charged it to define the Best Practices, they gave the group a list of questions that they wanted to be addressed. The first question was, “Which aspects of a subscriber’s identity should, or must, a provider collect to enable it to accurately verify the identity of a caller?”

Anis: So right off the bat, the FCC clearly understands that the core issue is, “How does a service provider accurately identify a caller?”  

Rebekah: Exactly. From there, the FCC inquired about the application of the accurately identified caller to the authentication framework.  

Let’s dig a little deeper into the Best Practices recommendations. To answer the FCC’s core question of identification, the Working Group dissected several definitions of who is actually being identified. Who knew that was going to be complex? But it was. We had to answer who are we identifying? But for this conversation, I’m going to stick to the entity that’s being identified as the Enterprise; the entity that the called party should be informed of who is calling, like the hospitals, the schools, the government agencies, the pharmacies, and resorts, and so far and so on.

So the service providers are going to have to collect more than just the Enterprise name and address. There are business details to collect and verify such as EIN, the duns number for a corporate website, articles of incorporation, and business address. You have regulatory and legal enforcement against the company, the type of calls being delivered, and so on. It’s really complicated. 

The concept of Enterprise vetting itself is not new, right? It sounds similar to Know Your Customer, for instance. So, the same concept is now being applied to communications?

Rebekah: That’s right. And what’s different about this Know Your Customer type of concept is that the voice service providers are the ones that have to do it. This is not a level of vetting they’ve ever had to do and this is not an easy task. So in fact, I want to call your attention to something that stuck out to me in the Best Practices because I’ve seen the FCC make similar statements, and, in fact, we kind of see the same message coming from the FTC as well. So to summarize, Best Practices are at the discretion of the service provider. There is a high level of expectation in the FCC’s supported Best Practices; this statement appears multiple times: “A provider’s reputation is tied to the rigor of its evaluation process.” 

As an industry, we need to take seriously our approach to establishing authenticated caller ID information.

Anis: So it’s clear to present an authenticated caller ID, a service provider has to first establish a local policy to accurately identify the Enterprise and the number on the call. The service provider can establish their own process to do that local policy but the policy itself, or the process, can be based on the Best Practices that the Working Group has built and you can use that as a foundation. But at the end of the day, the service provider’s reputation is tied to how rigorous the policy and the processes are.

Rebekah: Right, and I really don’t think that the service providers fully understand everything that you just mentioned. I don’t think they’ve gone through the process to put it all together to understand the burden they have. This really is a burden that’s being placed on them to provide accurate caller ID information with an authenticated call. I think many believe they just have to purchase a call-signing solution, which we see on the market. Everyone is promoting: implement this solution and you’re done. But that’s only the mechanism to deliver the authenticated and authorized identity. Am I right on that? 

Anis: That’s right. The service provider, if they are originating the call and they shoot the number to the Enterprise, then the policy is relatively easy to handle. You know the customer, the service provider has issued the number and you can attest with A, or clearly identify the caller.

The complex scenario happens when the Enterprise is using a number that was issued by another provider or the Enterprise is calling on behalf of somebody else. There is no simple way to verify if the Enterprise got numbers issued by another provider. Currently, you can manage this by collecting LOA’s or letters of authorization from the Enterprise and use that as a mechanism to authenticate the call. 

Are there are other solutions that are being discussed to extend the STIR/SHAKEN framework?

Delegated search is probably the most discussed solution but there’s also the centralized to DV and there’s also distributed ledger model. Those are all different solutions that have been proposed. In fact, Doug Bellows of Inteliquent had proposed a model based on an LOA, so you can collect and use that as a way of authenticating the number and whether the Enterprise really has the authority to use that number.

Rebekah: Do you get a sense of how service providers are going to approach these solutions? 

Anis: I think in the current state, most service providers are implementing the Core STIR/SHAKEN. The local policy as they see it is to apply for their immediate customers and their Enterprises but not to extend beyond that to Enterprises that get numbers from one service provider and use another provider to make a call, or to situations where there are multiple layers. This is still an unknown. There are models, there are local policy solutions you can implement, there are extended mode models you can leverage and add on top of the base STIR/SHAKEN, but it’s still open. That’s where we are.

We don’t have answers just yet on what happens if a call is inaccurately identified. What does Congress expect? 

Rebekah: They do require the FCC to prescribe some regulations to establish a process to streamline the ways in which a private entity can volunteer or share information regarding inaccurate caller identification information, among some other things that they want to create for this kind of information flow. But, what happens to the voice service provider if the information is inaccurate? What would be the reasons why the information is inaccurate? And who’s at fault? Is it the service provider who assigned the information or could it be the terminating side? The terminating side could have an error with their system, one with a display to get subscribers. Maybe they decide they want to suppress the information.

Anis: There are a lot of unknowns there. The TRACED Act talks about penalties and if a number or unturned label or number, or a misrepresent or mislead identification of a caller, but what it means or what the repercussions are, what the penalty is…that’s not described. And I also saw in several references in the Act where it talks about how in 12 months and 18 months we will probably have a report that would get built by the Working Group with recommendations and feedback and what has been learned after implementing the solution. 

I would, as a service provider, try to get a local policy or solution implemented to identify the calls that are being originated from your network and have the ability to provide some kind of traceback mechanism of how you authenticated, or the reasoning behind whether the call was labeled A, B, or C.  

What happens when a call originator makes a call through a carrier with a number they acquired from another different carrier in regards to 1) the level of attestation they can get, and 2) what the different levels look like to a subscriber? 

Anis: The first part, I’m not sure. I think it really depends on the carrier that is actually being used to originate the call. So let’s assume that the call originator uses a carrier but they did not get the number from there. 

It comes down to what policy they implemented and how they are treating that Enterprise as well as that number. Let’s say the carrier believes that they already know the customer or the client or the call originator, and they have a good KYC policy in place; they could theoretically attest the call as A. However, a different carrier could take a different approach: If you don’t get the number from me then I would always attest as B. That is also possible. So it really depends on how the local policy is implemented by the originating carrier and that could determine whether the call is attested as A or B.

Rebekah: The second part: if it goes to a B-level attestation, how will that impact the subscriber’s experience? It’s all about contact; we have to get this call delivered. I think this will change over time, but I would say what we’ve seen thus far is that there won’t be a difference between how the terminating carrier treats a B or A level as far as the presentation to the subscriber. 

Where it may make a difference is with regard to the analytics on the terminating side, or what are we doing with this additional data set of a B vs an A? What does an A tell me that a B doesn’t tell me? And it’s that two-part of an A where we feel like we can trust that call a little better because we know that the number and the entity delivering the call is authorized to use the number. And this whole process we talked about of identifying the caller, you feel they probably have done their rigorous evaluation. 

Perhaps that means something on the analytics side; we don’t know what it means on our side. I don’t feel that a B-level should be interpreted as untrusted because of the scenario just mentioned: what does an originating carrier do with a number that they did not provision? That’s the challenge for everybody; it’s not unique to one service provider. So I do not see terminating carriers treating a B -level attestation as though it should just be blocked.

Anis: I don’t think I differ too much. It could be that A could get a verification checkmark, whereas a B-level call may not get it. And that could influence what the subscriber does with the call. So if I am getting the call as a subscriber and I get one call and it says verification check or I have a tick mark, and then there’s another call that doesn’t have the tick mark, chances are that I would answer the first one and not the second. So the call completion could differ depending on whether it gets a verification checkmark or not. 

It comes down to what happens at the termination — what kind of algorithms are employed at that particular subscriber’s terminating service provider, and what that algorithm does with the flag. An A-level flag should, in theory, pass verification and you’d get that verification check. A B-level flag may not get it. I don’t think they would give a complete wordstat check if you get a B-level, I would be surprised if somebody gives that check.

Rebekah: I like the way you stated that. There are two things to look at: what the experience is during the time-of-call, and what the reaction is by the subscriber. I think that’s something we need to be monitoring going forward. 

What recommendations do you have for call originators who want to make sure one hundred percent of their calls are going to be A-level attested?

Rebekah: So I think it’s important you understand what your service provider’s requirements are. We talked about the burden of Know Your Customer and number authorization. I would love to see Enterprises working with their service providers to make sure that their identity is trusted, that they cooperate with the vetting, the Know Your Customer, and that they obtain the authorization of the number. Work with your service provider on what method they are wanting because at the end of the day your service provider will be implementing their local policy. So, understand what that local policy is and then support it. I think that will go a long way as opposed to Enterprises fighting with their service providers. 

Anis: I would agree with what you said. It depends on the service provider. As a call originator, you would have to work with your service provider to figure out what their local policy is for getting your calls attested as ‘A’. We are seeing some service providers already deployed, but the vast majority are still in the process of doing it so it will take some time before everything falls into place. But that’s where I would start, to understand how your particular service provider has implemented the solution.

On March 5, 2021, Nevada’s Department of Industry and Financial Institutions Division provided guidance to Collection Agency Licensees and Registrants allowing the employees of licensees and registrants to work from home until May 31, 2021.  The full text of the guidance is below.  

insideARM will continue to provide updates regarding changes to work from home orders, such as the recent orders from Washington and Maryland.   As we progress through 2021 and (hopefully) see a return to normalcy, agencies and other entities affected by work from home orders should ensure the end dates of work from home orders are tracked within their organizations. 

Full Text of Guidance:

On March 12, 2020, Governor Steve Sisolak declared a state of emergency for Nevada. In addition,  the Nevada Financial Institutions Division (“NFID”) issued a memorandum of temporary guidance  regarding working from home initially until May 31, 2020. Since then, NFID granted two  extensions, first extension until December 31, 2020 and the second until March 31, 2021. Excerpt  from that guidance:  

This Guidance does not amend current Nevada Revised Statutes (“NRS”) or  Nevada Administrative Code (“NAC”) and does not create new statutory  framework. All licensees and registrants must comply with the applicable NRS,  NAC, and other state and federal laws and regulations, which includes establishing  and maintaining proper security protocols to ensure maximum data, records and  transaction security.  

The Division’s Guidance: 

1. Data security requirements include provisions for the employee to access the  company’s secured system from any out-of-office device the licensee or registrant  uses through the use of a VPN or other system that requires passwords or an  identification authentication. The company is responsible to maintain any updates  or other requirements in order to keep information and devices secure;  
2. Neither the employee nor the company is to do any act that would indicate or tend  to indicate that the employee is conducting business from an unlicensed location.  Such acts include but are not limited to:  
3. Advertising in any form, including business cards and social media, the  unlicensed residence address or landline telephone or facsimile number  associated to the unlicensed residence; 
4. Meeting consumers at, or having consumers come, to an employee’s  unlicensed residence;  
5. Holding out in any manner, directly or indirectly, by the employee or  company licensee, the residence address that would suggest or convey to a  consumer that the residence is a licensed location for conducting licensable  activities;  
6. Employees and companies must exercise due diligence in the safeguarding of  company and customer data, information and records, whether in paper or  electronic format, and to protect them against unauthorized or accidental access,  use, modification, duplication, destruction or disclosure.  

As Nevada continues to work through these unprecedented times and ever-changing conditions, NFID has decided to grant another extension to the temporary guidance regarding working from  home until May 31, 2021, unless otherwise modified or withdrawn at the discretion of the  Commissioner. The NFID may not extend this guidance past May; therefore, it is imperative  that the collection agency begin making plans to ensure it can both comply with Nevada law  and the laws of the other jurisdictions it does business in.  (emphasis in original).

FMS Inc., Partners, Work Associates, and Family are deeply saddened to announce the passing of our dear friend and mentor Hank Markowe.

Hank was a vital industry veteran whose many contributions to our trade spanned 60 years.  His career started in 1956 with Bond Clothing Store, in NYC, after exiting the US Army as a Corporal.  From Bond onto Lerner Shops as a collection manager from 1963 – 1965.  Then a notable layover with our friends at Plaza Associates that ran some 35 years from 1965 – 2000.  After Plaza – Hank joined FMS in 2004 as a principal and EVP.  Starting in the industry in the “I like IKE “ era one can only imagine the change Hank was a part of and experienced in our industry. 

Hank’s ability to engage with everyone that crossed his path with a genuine interest in the person and their life experience is legendary.  His ability to offer just the right story, experience, advice, and humor facilitated his enormous network and his impact on our ever-changing industry.  Hank believed – people make the difference, not just processes or workflows. 

Upon receiving a Lifetime Achievement Award in 2005, Hank was presented a plaque that depicts the man and his true measure:

Hank Markowe

The truest measure of a man is not what he does, but what he gives.  You have given us the generosity of your labor, talent and warmed us with your smile and humor.  Our thanks to you for enriching our lives.

Our sincerest wishes go with you for a full measure of contentment and success in the future.

Your Friends from the Collection and Recovery Industry,

Bob Digennaro
Paul Brennan
John Hill
Jay Stone
Dennis Hammond
Judy Hammond
Paul Rongey
John Smith

Upon hearing the news of his passing, many offered fond memories via Linkedin. Here are just a few:

“I’m saddened to hear of his passing. He was one of the first people that took an interest in a very young and green Recovery Manager and made me feel special every time we met. He was a legend and will be missed. RIP Hank.” — Anthony Renteria

“Hank impacted so many people in his lifetime, including my daughter and me. We will never forget the love and generosity that flowed from Hank and Sylvia. Godspeed Hank!” — Kaye McComas

“Thoughts and condolences to the FMS family and to Hank’s family as well. There are only a few that could be considered icons of our business and he’s in that “few”.” — John Jette

“Hank will be missed, genuine human, great man.” — Chris Straiter

“Always first with a great story. I loved working the booth with him. You knew that you’d get to see everyone because they all wanted to see Hank. His matchbook collection was legendary. We will miss you, Hank.” — Mark Savoie

“Hank was one my few mentors in the business. He was always honest, respectful, and helpful to me when I was a young buck coming up. I loved his ability to command an audience and respect it at the same time. Rest in peace my friend, Rest In Peace.” — Stuart Wolpoff

Hank – you will be missed…

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As a passionate advocate for the accounts receivable management (ARM) industry, I have a growing concern about the misinformation flooding the marketplace related to the requirements of Regulation F in the final Consumer Financial Protection Bureau (CFPB) debt collection rule. Frankly, I’m shocked and dismayed by the ads, blogs, and webinars I’ve encountered that are proselytizing bad information about the most important, game-changing document to impact the third-party debt collection industry since 1977.

Today, in the interest of helping protect your business from potentially severe legal missteps, I’m going to tackle some of the falsehoods I’m seeing and set the record straight. As always, be sure to consult your legal counsel for specific advice related to these and other aspects of the final CFPB debt collection rule.

11 Examples of Misstatements About the CFPB Debt Collection Rule (Regulation F)

On the surface, some of these erroneous claims seem more harmful than others. But all of them are causing collectors undue anxiety or undermining their efforts to properly prepare for the final CFPB debt collection rule.

Issue #1: When the final CFPB debt collection rule takes effect

Bad info: On October 30, 2020, the CFPB published new debt collection rules exclusively for debt collectors. The rules are slated to go into effect on October 30, 2021.

Truth: On October 30 and December 18, 2020, the CFPB announced part I and Part II of Regulation F. Part I of the Rule was published in the Federal Register on November 30, 2020. Parts I and II both take effect on November 30, 2021.

Issue #2: When agencies should start complying with the final rule

Bad info: The sooner an agency begins to comply with the new Regulation F, the better.

Truth: No one will get an A for complying with the new CFPB debt collection rule before its effective date (November 30, 2021). Among the steps agencies need to take now to prepare for full compliance with the new rule is to make sure they have a test environment for the software releases required for compliance with Regulation F.

Issue #3: When a consumer’s express consent to communicate is needed

Bad info: Do not communicate with a consumer through any channel unless consent is first obtained from the consumer or from a court of competent jurisdiction.

Truth: There certainly are ways for a debt collector to initiate communications with a consumer without their direct consent. For example, debt collectors may call consumers at their residential land line without first obtaining their consent. Debt collectors may mail consumers letters by first class mail without first obtaining their consent.

With regard to email communications, debt collectors who seek safe harbor protection for the unauthorized disclosure of a debt to a third party may communicate by email with a consumer so long as they obtain the email address in compliance with one of the three methods detailed in Section 1006.6 (d)(4) of Regulation F.

Issue #4: Which records must be retained, and for what period

Bad info: Retain records showing evidence of compliance for three years after the last activity.

Truth: This advice is problematic because it lacks specificity. Debt collectors are required to retain evidence of both compliance and noncompliance with the FDCPA and Regulation F starting on the date collection activity begins on the debt until three years after the debt collector’s last collection activity on the debt and, with regard to any recorded phone call, three years after the date of the call. See Section 1006.100.

Issue #5: What’s required prior to sending an initial email

Bad info: Do send a written or electronic notice prior to your first email communication.

Truth: This makes no sense and should be disregarded. There is no such requirement in the new CFPB debt collection rule.

Issue #6: What collectors must do to obtain an email address

Bad info: Do not obtain an email address without consumer consent.

Truth: This statement also makes no sense. There is no such prohibition in Regulation F. A debt collector may certainly obtain an email address without the consumer’s consent. The question is what the debt collector may do with it once it is obtained.

Regulation F provides four ways a debt collector may enjoy a safe harbor from a claim the debt collector disclosed the existence of a debt to a third party without the consumer’s consent using an email:

• If the consumer used the email to communicate with the debt collector about the debt;
• If the consumer provided the debt collector with direct consent to use the email address to collect the debt;
• If the creditor sent the consumer a written or electronic notice (sometimes referred to as a hand-off letter) that meets the requirements of Regulation F Section 1006.6; or
• If the immediately prior debt collector used the email to collect the particular debt and such email was obtained by using one of the previously listed three methods. See, 1006.6 (d)(4).

Issue #7: How many messages a collector many leave in a seven-day period

Bad info: Do not leave more than seven messages within a seven-day period.

Truth: The calling restrictions in the new CFBP debt collection rule apply to attempted calls and conversations, not messages. The rule limits attempts to call any person (not just the consumer) and conversations with any person about a particular debt.

A debt collector may not attempt to call a person more than seven times in a consecutive seven-day period. The limited content message, voicemails, and ringless voice mails all count as attempts to call. In fact, any call placed to a person and that connects is an attempt to call.

A debt collector may not have more than one conversation with a person in a seven-day period about the debt. The date of the conversation is the first day in the seven-day period. Unless an exception to these requirements applies, Regulation F establishes a presumption of compliance with this section if a debt collector restricts calls and call attempts to these limits. See, 1006.14 (b).

Issue #8: When collectors are protected from harassment claims

Bad info: A debt collector is protected from a claim of harassment so long as the debt collector restricts communications to the call restrictions presented in Section 1006.14.

Truth: Compliance with the call and conversation limits presented in Regulation F does not insulate a debt collector from a claim of harassment. A debt collector can be held liable for harassment if/when communications, considered in their totality, violate the principles of the FDCPA and Regulation F.

For example, if the debt collector complies with the call attempt and conversation restrictions but pounds the consumer with five texts per day per debt during the same seven-day period, the debt collector could be held liable for harassment.

Issue #9: When digital communications can follow phone conversations

Bad info: Do not send emails or texts within seven days of a telephone conversation with the consumer without prior consent.

Truth: The call attempt and call conversation limits do not prohibit a debt collector from engaging the consumer using other types of communication methods. Although excessive communications can trigger a harassment suit, communication using channels otherwise permitted by the consumer may not give rise to liability if used within reason.

Issue #10: When social media communications are permissible

Bad info: Use social media addresses that are generally available to the public.

Truth: Regulation F does not prohibit debt collectors from using social media channels in connection with the collection of a debt. However, Regulation F does prohibit social media communications if they are viewable by the general public or the person’s social media contacts. See, 1006. (f)(4).

Issue #11: How collectors can obtain consent to text

Bad info: The only way debt collectors can obtain consent to text is if they comply with Section 1006. (d)(5).

Truth: Section 1006. (d)(5) presents debt collectors with two methods they may use to obtain a mobile number to use in connection with the collection of a particular debt. However, this does not mean these two methods are the only methods a debt collector may use to legally obtain a consumer’s mobile number to use in connection with the collection of a particular debt.

If the debt collector opts to obtain the mobile number under Regulation F, the debt collector will enjoy a safe harbor from a claim alleging the debt collector disclosed the existence of the debt to a third party without the consent of the consumer when using the mobile number.

CHICAGO, Ill. —  Provana, a leading provider of best-in-class technology solutions is proud to announce the release of the Provana Media Cabinet.  The Media Cabinet streamlines the processes debt buyers, creditors, and lenders use to manage the distribution of account-related documents, within their network.

As an extension of Provana’s existing suite of technology solutions for lenders which includes performance management, call analytics and monitoring, compliance management, and omnichannel communications, the Media Cabinet was developed to solve the challenges associated with a Network Manager’s ability to dynamically share large volumes of documents, efficiently.  The system’s requirements, design, and roadmap for the Media Cabinet were created in concert with The Bureaus, Inc., a recognized leader and master servicer of accounts receivable portfolios.  

“2020 provided our company the opportunity to identify inefficiencies in our process associated with delivering account level documentation to our Service Providers. In partnering with Provana, we were able to create something amazing.  The Media Cabinet provides our staff a tool to operate more efficiently while providing our servicers a secure and user-friendly environment to retrieve file related documentation.” Says Marian Sangalang, Vice President of The Bureaus, Inc.  Sangalang continued, “Working with the Provana team has been an incredible experience. We are excited about growing our partnership as they continue to develop technology solutions for The Bureaus, Inc. and the rest of the ARM Industry.” 

“It’s been an honor to work hand-in-hand with The Bureaus; designing, mapping and building the IPERFORM Media Cabinet,” says Rick Olejnik, Vice President of Platforms at Provana. “Providing solutions which instantly transform a client’s operations is exhilarating!  The Media Cabinet addresses the terribly ineffective and less secure process of old – managing folders on FTP servers.  We have completed yet another milestone in our journey to become the most comprehensive network management solution in the industry.”

Key product features include:

• Fast and efficient assignment of media while placing accounts with new servicers
• Hassle free re-assignment of media from one servicer to another 
• Automated upload and download of new media
• Ability to store large volumes of media in a highly secured environment
• Automated notification alerts of new media placement

About Provana

Founded in 2011 and headquartered in Chicago, IL, Provana offers leading-edge technology platforms and a large global workforce with depth and breadth of experience to small medium businesses and networked enterprises.  The combination of technology expertise and a global delivery model makes Provana the perfect partner to help your firm increase profitability, improve performance and exceed client expectations.

About The Bureaus, Inc., Inc.

Founded in 1928, The Bureaus, Inc., Inc. is a master servicer for non-performing receivables portfolios. The company is located in Northbrook, Illinois and has been owned by the same family since 1978, maintaining a proud tradition of professional financial management services.

The Bureaus, Inc., Inc. utilizes cutting-edge technology and proprietary tools to improve our performance and enhance the consumer experience. This data-driven strategy combined with our deep analytics capabilities identifies opportunities not found by other asset management firms.