A case pending in the Fourth Circuit Court of Appeals could upend the enforceability of dispute provisions found in a majority of consumer credit card agreements used by nearly every issuer in the United States today.  The Plaintiff in the Bailey matter asserts that both the arbitration agreement and the class action waiver provisions in her typical credit card contract are not binding agreements because the creditor could modify the terms. The Federal District Court denied the creditor’s motion to arbitrate the case which prompted an interlocutory appeal to the Fourth Circuit Court of Appeals.   

In Bailey, the Plaintiff sued her creditor in Maryland Federal District Court asserting that the creditor should have maintained a Maryland Consumer Lending License.  The creditor filed a motion to compel arbitration in the case and a motion strike Plaintiff’s putative class action allegations, citing the following provision in the credit card agreement with Plaintiff:

“By accepting this Agreement, you agree to this Jury Trial Waiver and Arbitration Clause (“Clause”). This Clause is in question and answer form to make it easier to understand. Even so, this Clause is part of this Agreement and is legally binding. Under this Clause, you waive the right to have any Dispute heard by a judge and jury and you waive the right to participate in a class, representative or private attorney general action regarding any Dispute.”

The Plaintiff’s credit card agreement further provided as follows: 

“The rates, fees and terms of this Agreement (including its Jury Trial Waiver and Arbitration Clause), may change and we may add or delete any term. When required by law, we will provide advance written notice of any changes and any right to reject the changes.“

The District Court in Bailey summarized the positions of the parties as follows: 

“Plaintiff argues that the Cardholder Agreement’s arbitration provision lacks the consideration necessary to constitute a binding agreement because it is subject to a change-in-terms provision allowing for unilateral modification without advance notice. Defendant argues that the change-in-terms provision does not apply to the arbitration provision because it is located outside the four corners of the arbitration provision.”

In denying the Defendant’s request to arbitrate the dispute, the Court in Bailey further wrote:

“According to the Supreme Court of Maryland’s decision in Cheek v. United Healthcare of Mid-Atlantic, Inc., a change-in-terms provision allowing the defendant to modify unilaterally an arbitration provision “[‘]with or without notice’ creates no real promise, and therefore, insufficient consideration to support an enforceable agreement to arbitrate[,]” because it empowers the defendant to revoke the arbitration agreement at any time. Id. at 662. Notice of unilateral changes alone, however, does not constitute adequate consideration without additional limitations.” See Bailey v. Mercury Financial

Two Recent Cases Reject Unilateral Attempts to Add Arbitration Clauses in Contrast to Bailey

The District Court’s holding in Bailey that the creditor has the ability to unilaterally change an arbitration clause in a consumer credit card agreement stands in stark contrast to the recent rulings by two other appellate courts striking down attempts by creditors to add an arbitration clause. In Pruett, the Wisconsin Court of Appeals struck down a creditor’s attempt to compel arbitration in the matter premised on an arbitration clause added to the Plaintiff’s credit card agreement after inception, writing:

“As to the first question, we conclude, for the reasons that follow, that WCU’s contractual authority to “change the terms of this Agreement” did not authorize it to unilaterally add the Arbitration Clause absent evidence that the Arbitration Clause was the type of change contemplated by the parties at the time of the original Agreement. No evidence has been presented that the Arbitration Clause involved terms that were previously in the Agreement or were contemplated by the parties at its inception. Therefore, WCU did not have the contractual authority under the change-of-terms provision to unilaterally add the Arbitration Clause, and the Arbitration Clause is not a part of WCU’s contract with Pruett.”  Pruett v. WESTCONSIN CREDIT UNION, Wisconsin Court of Appeals, 3rd Dist. (October 24, 2023)”

Further, the Indiana Supreme Court recently concluded that an arbitration provision added to a consumer credit card contract after inception of the agreement was unenforceable, writing: 

“Here, IUCU explicitly notified Land that the failure to opt out of the arbitration Addendum within 30 days of receiving notice would bind her to the Addendum. But the “mere fact that an offeror states that silence will constitute acceptance does not deprive the offeree of his privilege to remain silent without accepting.” Id. § 69 cmt. c. Instead, IUCU must show that Land “in remaining silent and inactive intend[ed] to accept the offer.” See id. § 69(1)(b). Under the Restatement, the “case for acceptance is strongest” when the offeree’s “reliance is definite and substantial” or when the offeree’s “intent to accept is objectively manifested though not communicated to the offeror.” Id. § 69 cmt. c. Even assuming Land was aware of the offer to arbitrate (which she disputes), there’s no evidence of her “definite and substantial” reliance on the proposed arbitration Addendum. See id. In fact, by filing a class-action complaint with the trial court, Land’s actions point in the opposite direction.”  Land v. IU Credit Union, No. 23S-CP-115 (Ind. Oct. 24, 2023)

These three recent cases demonstrate that the “change of terms” provisions in consumer credit card contracts remain open to widely varying interpretations by the Courts, especially when read in connection with arbitration provisions and class action waivers.   

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This article is provided only as a general discussion of legal principles and ideas. Every situation is unique and must be reviewed by a licensed attorney to determine the appropriate application of the law to any particular fact scenario. If you have a legal question, consult with an attorney. The reader of this publication will not rely upon anything herein as legal advice and will not substitute anything contained herein for obtaining legal advice from an attorney. No attorney-client relationship is formed by the publication or reading of this document. Rossman Attorney Group, PLLC assumes no liability for typographical or other errors contained herein or for changes in the law affecting anything discussed herein.

NEW YORK, N.Y. — January Technologies, Inc. (“January”) announced that it has raised $12 million in Series B financing, preempted and led by existing investor IA Ventures. Existing investors Brewer Lane Ventures, Third Prime, and Reciprocal Ventures, along with new investors such as Upper90, Shrug Capital, and numerous strategic angel investors, joined IA Ventures in the current round. The current round follows January’s $10 million Series A fundraise in 2022.

January is a fintech company humanizing debt collection, helping borrowers regain financial stability while driving creditors to modernize collections. January’s debt resolution platform rehabilitates relationships with borrowers, drives net recoveries, and reduces risk. January works with leading banks, credit unions, debt buyers, and fintech lenders. Ultimately, January is building the single platform for creditors to address all of their collection and recovery needs.

January has exhibited meaningful growth and established itself as a leader in the debt collection industry. Since their Series A, January has helped hundreds of thousands of Americans resolve their debt and has helped millions more move forward on their paths to financial freedom.

During the same period, they quadrupled their revenues as well as their client count. January’s client portfolio includes some of the nation’s largest lenders — ranging from top-20 card issuers and banks, to publicly-traded fintechs, top-10 credit unions, and debt buyers. As they’ve signed new clients and expanded relationships with existing ones since their Series A, they’ve experienced a 5x increase in monthly accounts.

The status quo in the debt collection industry creates worse outcomes for both consumers and creditors. This industry has historically been rife with harassment, trauma, and legal implications for creditors and borrowers. 70 million Americans are directly impacted by debt collection annually. More than one in four borrowers experience threatening tactics from collectors. Unsurprisingly, debt collection ranks as one of the top three most complained about sectors in consumer finance. 

Data is at the root of so many of the challenges that affect consumers and creditors. Poor data integrity — from outdated technology systems — introduces risk and inefficiency for creditors, while provoking poor experiences for borrowers. All of this leads to poor recoveries, inadequate compliance (e.g. lawsuits), harmed brands (e.g. complaints), and ineffective oversight for creditors. Creditors risk regulatory fines, their margins, and reputations when using traditional collection practices.

As consumers increasingly struggle to pay their bills, delinquencies continue to rise, reinforcing the need for a humane solution in this space. Over the past two years, delinquencies have risen by 35% and savings rates have dropped by 54%.

January envisions a world where financial recovery is a possibility for all, where the common experience of being behind on ones’ payments doesn’t lead to shame, harassment, and undue pressure. January is shaping a future in which individuals who fall behind on payments are no longer treated like criminals, because debt isn’t going away. In a field long avoided by innovation due to its reputation, January is boldly stepping forward to redefine the narrative around debt.

“IA is excited to triple-down and lead January’s Series B, bringing a customer-centric collections experience to every borrower in the country and funding the business to profitability. January has proven that industry-leading recovery rates and happy borrowers is not only possible, but reliable at scale, across millions of borrowers served. 

We’ve worked with January for six years since leading their seed round, and have seen them outperform every expectation of the most demanding financial services brands in the country. People expect their banks to offer complete transparency, intuitive mobile and web access, and empathetic customer support available 24/7 across digital channels, and debt collection should be an extension of that experience. Legacy collections agencies treat borrowers like criminals, and January has shown that treating borrowers like customers works better. The platform is poised to scale to every creditor in the US and beyond and fix this historically broken relationship.” – Jesse Beyroutey, Managing Partner, IA Ventures.

Higher quality, real time, and extensive data fuels more personalized borrower engagement and outreach, streamlines internal operations, and allows for codified rules and regulations — resulting in efficient, compassionate, and compliant collections practices.

January’s third-party collection service is 150x more efficient than traditional methods and is the #1 source of debt recovery for 90% of their clients. January receives industry-leading ratings and reviews from borrowers — earning 4.8/5 Stars on Google Reviews, redefining industry standards.

“January’s continued investment in our relationship has paid dividends operationally, in driving greater recoveries, and in creating a more positive borrower experience.” – Randolph Brooks Federal Credit Union.

“For a long time, we toiled away with the belief that treating consumers in a more compassionate manner would achieve better outcomes for consumers and creditors alike. The desire to create a better system drove our team, while we lacked statistical significance to substantiate our conviction. As our approach has touched millions of consumers’ lives, we hear weekly from borrowers expressing profound gratitude for resolving their financial challenges in a manner that upholds their dignity. The latest round empowers us to scale a new standard of compassionate collections to tens of millions more. Together with leading financial institutions, we’re not just dreaming of a more empathetic financial ecosystem. We’re actively building it.” – Jake Cahan, Founder and CEO, January.

From their product, to their client base, to their team, January has scaled significantly since their Series A fundraise, and the team is excited about what’s to come in 2024. Since their Series A fundraise in 2022, January has created a compassionate, effective debt resolution experience for millions of borrowers, signed leading financial institutions in the banking, credit union, fintech lending (including BNPL space), and doubled the size of their team. With this new funding round, January is focused on scaling their core product line to the largest financial institutions in the country and launching a solution to address creditors’ needs around delinquent accounts before reaching the point of charge-off. 

January will continue to level up the standard in debt collection, demonstrating that empathy and innovation can indeed reshape an entire industry.

About January

January is setting a new standard for humanized debt collection. January helps borrowers get out of debt, while helping creditors improve their collections, preserve relationships with borrowers, and ensure compliance. January’s digital-first, empathetic approach to collections and recoveries increases performance, decreases risk, and creates better borrower experiences. By establishing a platform built on trust and transparency, creditors and borrowers both look to January for a better collection and recovery experience. As consumers increasingly struggle to pay their bills, delinquencies will continue to rise, reinforcing the need for a humane solution in this space.

January partners with leading banks, fintechs, credit unions, and debt buyers to optimize their existing debt collection strategies — enabling them to increase collections efficiency, improve recoveries, and create happier borrowers. January is 150x more efficient than traditional collections agencies and is the top performing agency for over 90% of their clients, all the while achieving industry-leading reviews from borrowers on Google Reviews and Better Business Bureau. Learn more at https://www.january.com/

The CFPB had a busy November. In this article, we’ll share some of our top CFPB “bites” of the month so you can stay on top of recent developments. 

Bite 10: Director Chopra’s Statement on Proposed Rule on Lifetime Bans

On October 24, 2023, CFPB Director Chopra, in his role as a member of the FDIC Board of Directors, released a statement on the new FDIC proposed rule that will implement new legislation to revise the current employment bans under the Federal Deposit Insurance Act (“FDIA”). The FDIA prohibits banks from employing people convicted of certain criminal offenses, and the new proposed rule will revise this prohibition by excluding certain offenses and reducing bans for individuals who were 21 years old or younger at the time of their offense. Director Chopra said that recruiting and retaining qualified employees is one of the biggest challenges facing banks today, and this proposal will create opportunities for more individuals to access employment opportunities and for banks to recruit qualified individuals. The CFPB director pointed out that while low-level employees can lose the ability to ever work in the industry after committing a crime, high-level executives repeatedly preside over financial crimes at banking institutions and must only pay a fine to continue their careers. He said that this proposed rule will help to correct that imbalance.

Bite 9: Director Chopra’s Statement on “Shadow Banking”

On November 3, 2023, CFPB Director Chopra issued a statement on the Financial Stability Oversight Council’s effort to promote market discipline in the “shadow banking” sector, after the FSOC voted to issue final versions of a new analytic framework for financial stability risks and updated guidance on the Council’s nonbank financial company determinations process. He stated that Congress created the Council under Section 113 of Dodd-Frank to designate systemically important nonbank financial institutions that could pose a threat to financial stability. However, the FSOC currently has zero “shadow banks” designated as systemically important, which has led market participants to believe that this designation authority is a dead letter. The FSOC removed procedural restrictions that were placed in 2019, and Chopra says this move “establishes a more appropriate and durable process for using the designation authority.” Director Chopra said that the CFPB will now turn to implementing the guidance by evaluating whether any shadow bank meets the statutory threshold for enhanced oversight, and will build on the work that FSOC Committees, such as the Hedge Fund Working Group and Nonbank Mortgage Task Force, have already conducted in the context of sector-wide reviews.

Bite 8: Statement on Community Reinvestment Act

On October 24, 2023, CFPB Director Chopra, in his role as a member of the FDIC Board of Directors, released a statement on the final rule that will implement the Community Reinvestment Act. He stated that the final rule is the product of compromise between the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Federal Reserve Board of Governors, and it should help increase investment and lending in historically excluded communities, including rural communities. Now that the rules have been completed, he said the next step would be to address the “convenience and needs” factor in bank merger applications covered by the Bank Merger Act. Director Chopra stated that reforms are needed for existing merger application review protocols, and the agencies should carefully evaluate whether the community would be better served by the combined entity in the future than it was in the past by the banks individually. He also called on state legislatures to accelerate efforts to ensure certain nonbank entities have Community Reinvestment Act-like requirements, particularly in sectors where there is significant public subsidies or support for their business activities.

Bite 7: CFPB Issues Report on Record-High Credit Card Costs

On October 25, 2023, the CFPB issued a report on credit card costs claiming the card industry charged a record-high $130 billion in interest and fees in 2022. The biennial report to Congress claims that in 2022 credit card companies charged consumers more than $105 billion in interest and more than $25 billion in fees. Total credit card debt rose above $1 trillion for the first time since the CFPB started collecting this data. The CFPB said this report highlights areas of concern, including more consumers carrying balances month to month, with many falling deeper into debt over time, while credit card company profits remained significantly above pre-pandemic levels. Additionally, the report found that annual percentage rates continue to rise above the cost of offering credit, with the average APR margin 15.4% points above the prime rate, even though charge-off rates fell during the pandemic. Late fees continued to be the most significant fee assessed to consumers, in both dollar amounts and in frequency, and more cardholders are carrying balances month to month. The report also found that consumers have shifted toward the use of digital portals, such as websites and mobile apps, to manage their cards and make payments.

Bite 6: CFPB Issues Report from Education Loan Ombudsman

On October 20, 2023, the CFPB issued a report from the Education Loan Ombudsman, analyzing over 9,000 complaints about student loans over the past year. According to the report, about 75% of the complaints about student loans during this period related to the servicing and collection of federal student loan debt, an increase over previous years. The complaints outlined problems with customer service, errors related to basic loan administration, and problems accessing loan cancellation programs. The other 25% of the complaints were related to private student loan debt, including those related to loan cancellation, misleading origination tactics, and coercive debt collection practices. The overall increase in complaints is attributed to ongoing systemic changes in the federal student loan system, the end to the payments pause, and increased financial uncertainty among borrowers. These issues coincided with servicers being responsible for the transfer of millions of accounts, new payment policies, and a requirement to address long-standing servicing failures.

Bite 5: CFPB Analyzes State Community Reinvestment Laws

On November 2, 2023, the CFPB announced that it had published a new analysis on state Community Reinvestment Act laws, which highlighted how states ensure financial institutions’ lending, services, and investment activities meet the credit needs of their communities. The report analyzed the laws of eight states and the District of Columbia and found that many of these states adopted laws similar to the federal Community Reinvestment Act. The CFPB also found that state enactments of Community Reinvestment Acts can be more wide-ranging than the federal law; the federal Community Reinvestment Act law applies strictly to banks, but state laws can apply to a wide range of financial institutions, like nonbank mortgage companies. The key findings of the report showed that some states independently examine their covered institutions, while others review federal examinations; that enforcement mechanisms include limitations on mergers, acquisitions, branching activities, and licensing; at least one state requires additional lending data above federal requirements; and that the state laws have been amended in response to changing markets.

Bite 4: CFPB Proposes New Rule on Digital Wallets and Payment Apps

On November 7, 2023, the CFPB announced that it was proposing a new rule on digital wallets and payment apps that will subject larger providers to examinations like banks. The CFPB announced a Notice of Proposed Rulemaking, which it said is designed to define a market for general-use digital consumer payment applications. The proposed market would cover providers of funds transfer apps and digital wallets for consumer use, and larger participants of this market would be subject to the CFPB’s supervisory authority under the CFPA. The CFPB indicated that the proposed rule would ensure that these nonbank financial companies, specifically larger companies handling more than 5 million transactions per year, adhere to the same rules as large banks, credit unions, and other financial institutions already supervised by the CFPB. According to the CFPB, Big Tech and other companies operating in consumer finance markets blur the traditional lines that have separated banking and payments from commercial activities, and this can put consumers at risk, especially when traditional banking safeguards like deposit insurance don’t apply. The CFPB also noted that it has opened the Office of Competition and Innovation to ensure a level playing field for new firms to compete with Big Tech in the consumer finance space. Comments on the proposal are due by January 8, 2024, or 30 days after publication of the proposed rule in the Federal Register, whichever is later.

Bite 3: CFPB Proposes Rule on Personal Financial Data Rights

On October 19, 2023, the CFPB announced that it was proposing a new rule that will give consumers more control over data about their financial lives and new protections against companies misusing their data. This proposed rule implements Section 1033 of the Consumer Financial Protection Act, which charged the CFPB with implementing personal financial data sharing standards and protections. According to the CFPB, this rule will ensure that consumers can access their data without paying “junk fees,” will give people a legal right to grant third parties access to information about their financial accounts, and will enable consumers to more easily walk away from bad service by facilitating portability of their data to competing products and services. It will also prohibit companies who receive consumer data from using it for anything but the specific purpose requested by the consumer. Under the proposal, the requirements would be implemented in phases, with larger providers being subject to them first. In addition, community banks and credit unions that have no digital interface at all with their customers would be exempt from the rule’s requirements. In prepared remarks, CFPB Director Chopra said that this rule will help decentralize the financial services market, give consumers more control, and allow smaller institutions and startups to compete fairly with major market players.

Bite 2: The Small Business Lending Rule Stayed Nationwide

On October 27, 2023, the U.S. District Court for the Southern District of Texas issued a nationwide injunction prohibiting the CFPB from implementing or enforcing its Small Business Lending Rule, which was written to implement Section 1071 of the Dodd-Frank Act. The Small Business Lending Rule requires banks, credit unions, and small business lenders to collect and report information on the small businesses who apply for loans, including applications from minority businesses. Opponents of the rule have claimed the rule is burdensome and will significantly increase borrowing costs. The district court had previously issued an injunction against the rule only for the named plaintiffs in a case challenging the rule based on doubts about the Bureau’s constitutionality, a question which initially arose in the same circuit that issued this injunction. After other covered institutions filed motions to intervene in the case, the district court decided to expand the scope of its previous injunction to all covered entities nationwide.

Bite 1: CFPB Takes Action Against Large Bank for Discrimination

On November 8, 2023, the CFPB announced that it has ordered a large bank to pay $25.9 million in fines and consumer redress for allegedly intentionally and illegally discriminating against credit card applicants the bank identified as Armenian American. From at least 2015 through 2021, the bank allegedly targeted applicants with surnames that employees associated with Armenian national origin as well as applicants in or around Glendale, California because the bank allegedly stereotyped this group as being likely to commit crime and fraud. Allegedly, the bank specifically targeted surnames ending in “-ian” and “-yan,” and Glendale is home to approximately 15% of the Armenian American population in the United States. According to the CFPB, supervisors at the bank conspired to hide the discrimination by instructing employees not to discuss the discriminatory practices in writing or on recorded phone lines, and employees lied about the basis of denial, providing false reasons to denied applicants. One employee was allegedly instructed to blame denials based on surname as being declined for “suspected credit abuse”- which blames the consumer for the denial. The CFPB also alleges that the actions the bank took towards people it believed were Armenian American included denying these consumers outright, requiring additional information, or placing a block on the account. The bank is accused of violating the Equal Credit Opportunity Act and will pay $1.4 million to affected consumers and a $24.5 million fine to the victims relief fund.

Extra Bite 1: FTC Amends the Safeguards Rule

On October 27, 2023, the FTC announced that it has approved a new amendment to the Safeguards Rule, requiring non-bank institutions to report certain data breaches and other security events to the agency. Under the existing rule, non-bank institutions, which include mortgage brokers, motor vehicle dealers, payday lenders, finance companies and others must develop, implement, and maintain comprehensive security programs to keep their customers’ information safe. The amendment to the rule requires these financial institutions to notify the FTC as soon as possible, and no later than 30 days after discovery, of a security breach involving the information of at least 500 consumers. The notice must include information about the event, including the number of consumers affected or potentially affected. The Commission voted 3-0 to publish notice of the amendment, which becomes effective 180 days after publication of the rule in the Federal Register (or, May 13, 2024).

Extra Bite 2: FTC Refunds $100 Million to Consumers

On November 3, 2023, the FTC refunded $100 Million to consumers saying that consumers were trapped in subscriptions by dark patterns and junk fees. The FTC is refunding nearly $100 million to consumers who it says lost money to their internet phone service provider after the provider allegedly imposed junk fees and used dark patterns to make it difficult for consumers to cancel their subscriptions. The FTC says the provider allowed numerous ways to sign up for the service, but made cancellation much more difficult. Customers could only cancel after speaking to a live agent, and the FTC alleges that the provider made it difficult to find the phone number on the company website, didn’t consistently transfer customers to that number from the normal customer service number, reduced the hours during which the line was available, and failed to provide promised callbacks. Allegedly, in some cases, the provider continued to illegally charge customers for phone services even after the customers spoke to an agent directly and requested cancellation. The provider also allegedly charged surprise termination fees that were not clearly disclosed when the customers signed up for the service. The provider has agreed to a court order that requires the provider to change its practices and turn over $100 million to the FTC that will be used for consumer refunds.

Still hungry? Please join Hudson Cook for our next CFPB Bites of the Month. If you missed any of our prior Bites, including the webinar that covered the above topics, request a replay on the Hudson Cook website here. 

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This article is provided for informational purposes and is not intended nor should it be taken as legal advice.  The views and opinions expressed in this article are those of the authors in their individual capacity and do not reflect the official policy or position of the partners of Hudson Cook, LLP or clients they represent.

ST. PAUL, Minn– IC System is proud to announce that DebtNext has made our company the inaugural member of its dPlat Partner Accreditation Program. As the first accredited company under the new program, IC System is a trusted partner for creditors looking to select a collection agency and integrate their past-due inventory using DebtNext’s comprehensive recovery management platform. 

DebtNext Software was founded in 2003 and offers the most robust recovery management platform in the market today. The DebtNext Platform (dPlat) is comprised of a comprehensive set of solutions designed to optimize every aspect of recovery operations.

IC System has maintained an ongoing relationship with DebtNext for 14 years. Their platform has enabled us to provide over 20 clients with seamlessly integrated recovery management services. Becoming accredited with DebtNext gives IC System a competitive edge over other debt collection agencies that have not yet undergone the rigorous review standards to become accredited. 

“DebtNext Accreditation is beneficial to have because it is a prestigious endorsement, affirming our commitment to excellence and adherence to industry standards in a formal audit,” said Karen Jonas, IC System’s SVP of Field Sales. “IC System has demonstrated that we meet the accreditation criteria, and this will help clients vet out their next collection agency. This will reduce expenses for future clients to ensure IC System surpasses the compliance and standards of the industry.” 

The accreditation program was developed from a concept proposed by DebtNext’s Thom Majka, Director of Client Success, to provide creditors with peace of mind when selecting a collection partner to integrate with a trusted middleware company. 

To receive the accreditation, IC System underwent a detailed review focusing on the areas of Integration, Authentication, Remittance Management, and SOC 2 Compliance.

The Partner Accreditation Program builds trust among creditors with accredited agencies when it comes to recommendations, compliance assurance, and data security. “It’s about excellence with integration on our platform and a way for us to formalize the evaluation and recommendation process,” said Frank Ellenberger, Director of Strategic Initiatives. “This has more substance than a referral.” 

About IC System

IC System is one of the largest receivables management companies in the United States. Founded in 1938, IC System is a privately held accounts receivable management firm in its third generation of family ownership. IC System provides customized, tailor-made debt recovery solutions for utilities, small business, healthcare, dental, government, and telecommunications industries nationwide. Follow IC System on Twitter or LinkedIn.

On November 15, the CFPB issued a report, titled “The CFPB Language Access Plan for consumers with limited English proficiency,” on expanding consumer needs in the financial marketplace for individuals with limited English proficiency. The CFPB released this report consistent with the mandates under E.O. 13166 to “educate and empower all consumers, provide information and assistance to traditionally underserved consumer and communities, enforce fair lending laws, and promote an equitable workforce for all consumers.”

The CFPB cites that 22 percent of the U.S. population over the age of five speak a language other than English at home. The CFPB commits itself to ensuring that tools, programs, and services are available to those who need language assistance by (i) understanding the needs of the population; (ii) conducting outreach and engagement; (iii) providing products and services in eight different languages other than English; and (iv) promoting fair and equitable access to the financial marketplace.

The CFPB’s report also lists several public enforcement actions involving communicating with consumer with limited English proficiency. The report mainly outlines how well the agency does in addressing the diverse language needs of the U.S. population, including translated disclosures, websites, and outreach and engagement sessions.

WILMINGTON, Del. –November 2023 – Phillips & Cohen Associates, Ltd. (PCA), the global leader in deceased account care servicing and technology solutions, servicing clients in the United States, Canada, United Kingdom, Ireland, Australia, New Zealand, Spain, and Germany is pleased to announce the appointment of Robert Husband as Global Chief Financial Officer.

Robert is a highly experienced global business leader who has spent nearly 20 years in senior executive roles across the Financial Services and Fintech sectors. Following various international CFO roles, Robert became CEO of Provident Mexico, a sub-prime lending business, which he led to become the largest home credit company in the country. More recently, he held the position of CEO of Tower Street Finance, the pioneering inheritance funding business in the UK. Robert brings a wealth of business experience across consumer lending, collections, and the probate sectors. He has worked in publicly listed companies and private equity backed startups.

Adam S. Cohen, Co-Chairman/CEO commented, “We are delighted to add a dynamic leader such as Robert to our executive team. These are exciting times for our organization as we look to transform our already strong customer led propositions, while introducing new products and entering new markets. Robert’s extensive knowledge and international experience will be significant assets to Phillips & Cohen Associates as we continue to drive growth in Europe, Asia and the Americas.”  

On his appointment, Robert commented “I am delighted to be joining Adam, Matt and the rest of the Executive team at this exciting time for Phillips & Cohen Associates. The company is uniquely positioned, and I look forward to supporting them in the delivery of their ambitious growth plans, both domestically and internationally.”

Matthew Phillips, Co-Chairman/CEO of Phillips & Cohen commented, “We are thrilled to have an executive of Robert’s caliber join the organization to lead our finance & accounting teams. He brings extensive sector expertise, product knowledge and a drive that matches our own.”

About Phillips & Cohen Associates, Ltd. 

Phillips & Cohen Associates, Ltd. is a specialty receivable management company providing customized services to creditors in a variety of unique market segments.  Phillips & Cohen Associates, Ltd is domestically headquartered in Wilmington, DE, with additional offices in Colorado and Florida as well as international offices in the UK, Canada, Spain, Germany, and Australia.  For more information about Phillips & Cohen Associates visit www.phillips-cohen.com. PCA provides Equal Employment Opportunity for all individuals regardless of race, color, religion, gender, age, national origin, disability, marital status, sexual orientation, veteran status, genetic information, and any other basis protected by federal, state, or local laws.

CHESAPEAKE, Va. — Spring Oaks Capital, LLC is pleased to announce the hiring of Andrea Beck as Director of Human Resources. Andrea will be based in the Company’s headquarters in Chesapeake, VA and report directly to President & CEO, Tim Stapleford.

Andrea joins Spring Oaks Capital with broad HR experience in a call center environment, most recently as Human Resources Director at Canon Information Technology Services, Inc. As the HR Director at Spring Oaks Capital, Andrea will be at the forefront of the Company’s people-centric approach, incorporating her strategic vision and operational expertise to drive the development of our workforce and high-growth environment.

Spring Oaks Capital’s President and CEO, Tim Stapleford, stated, “We are excited to welcome Andrea to our world-class team. Andrea will foster a culture of engagement, innovation, and collaboration, while ensuring legal compliance and implementation of Spring Oak’s mission and talent strategy.”

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Andrea added, “I am thrilled to be joining Spring Oaks Capital during such an exciting time for the Company. I look forward to working with their highly experienced management team and contributing to the Company’s increasing success.”

About Spring Oaks Capital, LLC

Spring Oaks Capital is a national financial technology company, focused on the acquisition of credit portfolios. The Company subscribes to an employee and consumer-centric operating philosophy that creates high-value jobs, a significant performance lift, and the highest standards of compliance. Spring Oaks’ business strategy is rooted in innovative data-driven technology to maximize collection results and a contact platform that offers multi-channel options to meet each consumer’s communication preference. Spring Oaks has the management vision and experience to nurture a culture and DNA that is unique in the space. To learn more about Spring Oaks, please visit www.springoakscapital.com.

The U.S. Court of Appeals for the Second Circuit issued a summary order affirming a district court’s holding that an emailed response to the plaintiff’s email did not constitute an “initial communication” under the Fair Debt Collections Practices Act (FDCPA).

In Worley v. Simon, Meyrowitz & Meyrowitz, P.C., the plaintiff had a default judgment entered against her in state court for failure to pay rent. Approximately two years later, the plaintiff contacted her former landlord explaining she was having technical difficulties paying the balance through the landlord’s portal. That same day, the landlord responded to the plaintiff via email informing her that her case was with the defendant collection firm who was copied on the email. The plaintiff then sent an email to the defendant’s collection law firm stating: “[p]lease add to case file thank you.” A few days later, the law firm responded to the plaintiff via email to provide the outstanding balance.

The plaintiff filed a lawsuit against the law firm for alleged violations of the FDCPA, 15 U.S.C. §§ 1692e(11) and 1692g(a). Specifically, the plaintiff alleged that by sending the email the law firm improperly attempted to collect what it knew to be an unlawful debt stemming from the state-court judgment. The district court dismissed the plaintiff’s complaint with prejudice finding, among other things, that the email at issue did not constitute an “initial communication,” as required for certain claims under the FDCPA, because it was sent in response to an email from the plaintiff.

The plaintiff appealed relying on Second Circuit precedent for the proposition that a communication from a debt collector sent in reply to a communication from a consumer can still sometimes be deemed an “initial communication” under the FDCPA. However, the court found the plaintiff’s reliance misplaced because she was never “prompted” by the law firm to contact it regarding the debt. Here, the law firm sent the email at issue in response to the plaintiff’s unprompted communications. As such, the court held it does not constitute an “initial communication” for purposes of the FDCPA.

The court also upheld the district court’s dismissal of the plaintiff’s remaining claims under the Rooker-Feldman doctrine because the injuries alleged were the result of the state-court judgment and were thus barred.

NEW YORK, NY — Skit.ai, the leading
provider of conversational Voice AI solutions, announced today its partnership
with Forest Recovery Services, a third-party collection agency headquartered in
South Carolina focused on medical, municipal, and other types of debt. By enhancing
its recovery strategy with Skit.ai’s Augmented Voice Intelligence platform,
Forest Recovery Services plans to significantly expand its outbound calling
efforts and maximize account penetration.

Throughout 2023,
Skit.ai has emerged as the accounts receivables industry’s preferred Voice AI
solution provider to automate phone conversations with consumers, including
right-party contact (RPC) verification and promise-to-pay (PTP) capture. The
solution is fully compliant with federal and state regulations, enabling
lenders and collection agencies to accelerate revenue recovery and grow their
operations.

“We recently
experienced a significant expansion of our account base since acquiring a new
collection agency. The adoption of Skit.ai’s Voice AI solution has already
resulted in a 10X increase in our outbound collection efforts,” said John Berquist, Owner of Forest Recovery
Services. “With one client’s portfolio in particular, we witnessed a 160%
spike in collections. The results have been remarkable.”

Consumers have
responded positively to the voicebot, appreciating its ability to smoothly
engage in two-way conversations with a natural-sounding flow. The voicebot
transfers the call to a live agent whenever the consumers request it, providing
real-time access to the interaction’s background and context.

“As the accounts
receivables industry experiences an important phase of digital transformation,
it is highly encouraging to see the commitment of Forest Recovery Services to
innovation and its preliminary success with Skit.ai’s Voice AI solution,” said Sourabh Gupta, Founder and CEO of Skit.ai.

Dozens of companies
across the U.S., both large and small, have deployed Skit.ai’s Voice AI
solution to enhance and automate their debt recovery strategy.

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

About Forest Recovery Services:

Forest Recovery Services is a collection
agency headquartered in South Carolina. Forest Recovery Services proudly
employs a team of seasoned collection professionals.  The agency focuses on various types of debt,
including medical, municipal, and rental property. Visit https://forestrecoveryservices.com/

About Skit.ai:

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