CHICAGO, Ill. — October is a time when people around the world turn to pink to show support for those who have battled, are battling, or have been affected by breast cancer. This year, Markoff Law has stepped up its commitment to making a difference by contributing to the Susan G. Komen Foundation, an organization at the forefront of the fight against breast cancer.

The Susan G. Komen mission is to save lives by meeting the most critical needs in our communities and investing in breakthrough research to prevent and cure breast cancer. Markoff Law is proud to support an organization working tirelessly to help the nearly 4 million women affected by breast cancer in the United States. 

Why Breast Cancer Awareness Matters

October is Breast Cancer Awareness Month. This month holds immense importance in our society. It serves as a powerful reminder of the prevalence of breast cancer and the need for early detection and comprehensive support systems. 

By wearing the symbolic pink ribbon, communities worldwide express their solidarity with patients, survivors, and their families. Moreover, it emphasizes the significance of regular screenings and educates individuals about breast health, fostering a proactive approach towards the disease.

Markoff Law encourages everyone to join them in supporting Breast Cancer Awareness Month. Whether it’s wearing a pink ribbon, sharing informative resources, or participating in local events, every effort counts. By spreading awareness and encouraging open conversations about breast health, we can make a significant impact in our community. It’s a collective endeavor that amplifies our message of hope, resilience, and compassion.

A Cause Worth Fighting For

Markoff Law’s recent donation to the Susan G. Komen Foundation signifies its commitment to making a tangible difference in the lives of individuals and families affected by breast cancer. By providing financial assistance to this esteemed organization, they actively participate in funding critical research, treatment programs, and support services for breast cancer patients. Markoff encourages any and all who can to support causes like Susan G. Komen and continue to provide funding for the valuable research and support these organizations provide. 

About Markoff Law LLC

Markoff Law LLC is a forward-thinking firm with a history of experience and success representing creditors throughout the Midwest. Through the decades, Markoff Law has earned and maintained a reputation for excellence, honesty, and integrity. The firm’s thought leadership and adherence to industry best practices have established it as a leader within the accounts receivable management industry. Markoff Law is firmly committed to setting and achieving the highest standards of excellence.

The CFPB had a busy October. 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: New Report on NSF Fees at Banks and Credit Unions

On October 11, 2023, the CFPB issued a data spotlight on nonsufficient fund fees (“NSF fees”) showing that many NSF fee practices have been eliminated by banks and credit unions. NSF fees are charges that some financial institutions impose when they determine that accounts lack sufficient funds and therefore reject to pay funds from a consumer’s account for a check or electronic authorization. These are distinct from overdraft fees, which financial institutions charge when they pay a payment from an account that lacks sufficient funds, rather than reject the payment. 

According to the CFPB, over the last several years, nearly two-thirds of banks with over $10 billion in assets have eliminated NSF fees and nearly three-fourths of the banks that earned the most in overdraft and NSF fee revenue in 2021 have eliminated NSF fees. However, the CFPB claims that many large credit unions, including 16 of the 20 that have over $10 billion in assets, are still charging NSF fees. The CFPB’s data analysis indicates that as the result of the elimination of NSF fees at these banks, consumers will be saving almost $2 billion annually on a going forward basis. The CFPB says it will continue to monitor NSF fee practices in the market.

Bite 9: Consumer Advisory on Credit Repair Services

On September 22, 2023, the CFPB published a consumer advisory reminding consumers that they have the right to cancel credit repair services. This advisory followed a recent settlement involving several large credit repair companies. The CFPB says that these consumers have received notices that they can cancel their services with no penalties, at any time, and for any reason or no reason at all. The CFPB is also advising credit repair consumers who contracted for repair services through telemarketing that the credit repair service must achieve the promised results in the promised time frame, and that the consumer must receive a consumer report that shows the promised results, that was generated at least six monthsafter the promised results were achieved. The CFPB’s advisory says that only then can a credit repair company that used telemarketing charge any fees or accept payment. The CFPB further advised consumers that they don’t need to hire anyone to dispute mistakes in their credit reports; they can do so on their own using tools available for free online.

Bite 8: CFPB Launches Initiative on Immigrant Access to Fair Credit

On October 12, 2023, the CFPB launched an initiative on immigrant access to fair credit, and started investigating the financial experiences of immigrants. The CFPB noted that immigrant borrowers, including those protected under the Deferred Action for Childhood Arrivals Program have been denied credit based on their immigration status. These include denials for credit cards, vehicle financing, and student loans. 

According to the CFPB, it has received complaints from consumers who received positive feedback from lenders about their credit scores and income, but were ultimately denied because of their immigration status alone. The CFPB and the Department of Justice also issued a joint statement on fair lending and credit opportunities for immigrant borrowers under the Equal Credit Opportunity Act (ECOA). Under the ECOA, the CFPB noted that lenders are not prohibited from considering a borrower’s immigration status, but they are prohibited from using that status to discriminate based on national origin, race, and other protected characteristics. The CFPB’s statement seeks to remind lenders that they cannot use immigration status to justify unlawful discrimination.

Bite 7: CFPB Publishes Special Edition of Supervisory Highlights

On October 11, 2023, the CFPB published a special edition of its Supervisory Highlights, focused on fees the CFPB (and FTC) call “junk fees.” The CFPB took issue with organizations charging fees for: (1) multiple payment re-presentments returned unpaid; (2) authorized positive, settle negative overdraft; (3) printing and mailing undelivered statements; (4) depositing unpaid checks; and (5) add-on products in auto finance (including miscalculating add-on product refunds). This special edition also referenced program developments, a circular on overdraft fees, a bulletin on returned deposit fees, and an advisory opinion on pay-to-pay fees.

Bite 6: CFPB Issues Guidance on “Junk Fees” Charged by Banks

On October 11, 2023, the CFPB issued an advisory opinion regarding a statute prohibiting large banks and credit unions from imposing unreasonable obstacles on customers related to basic information about their own accounts. Specifically, Section 1034(c) of the Consumer Financial Protection Act requires large banks and credit unions to provide account information upon request to customers when the information is in their control or possession. This includes information about a consumer’s accounts for financial products or services, such as balances, interest rates, and transaction history. 

The CFPB says that large banks are shifting away from a relationship model of banking and are charging so-called “junk fees” on customers to respond to account information inquiries. The CFPB says this practice impedes customers from obtaining information that they are entitled to under federal law. The advisory opinion says that charging fees to respond to an information request violates the CFPA, but that as a matter of prosecutorial discretion, the CFPB does not intend to seek monetary relief for potential violations described in the opinion that occur prior to February 1, 2024.

Bite 5: CFPB and FTC File Amicus Brief on Credit Reports

On September 29, 2023, the CFPB and FTC together filed an amicus curiae brief in the U.S. Court of Appeals for the Second Circuit. The brief argued that companies reporting consumer data must delete data that the company cannot verify after someone identifies the information as wrong. According to the CFPB, some companies have argued that if they are unable to determine that the disputed information is false, then they may continue providing the disputed information on reports. According to estimates cited by the CFPB, one in five Americans has incorrect information on at least one of their credit reports. As a result, the CFPB claims the FCRA requires companies to respond appropriately when notified of errors.

Bite 4: CFPB Kicks off Medical Bill Rulemaking

On September 21, 2023 the CFPB announced that it is beginning a rulemaking process to remove medical bills from credit reports. The CFPB says these efforts will help families financially recover from medical crises, stop debt collectors from coercing people into paying bills they may not even owe, and ensure that creditors are not relying on data that is often plagued with inaccuracies and mistakes. The CFPB cites to a 2022 report indicating that approximately 20% of Americans have medical debt. The CFPB also noted its research indicating that medical billing data on a credit report is less predictive of future repayment than reporting on traditional credit obligations, and that inaccuracies in billing are common and often compounded by disputes over bills and complex billing practices. 

The CFPB outlined proposals under consideration, which include prohibitions on: (1) the inclusion of medical debt and collection information on consumer reports; (2) a creditor’s use of medical collections information when evaluating credit applications; and (3) “coercive” debt collection practices, including the use of the credit reporting system to leverage payments on medical debts. The CFPB is currently reviewing information public responses to recent hearings and inquiries as part of the rulemaking process.

Bite 3: CFPB Sues Another Alleged “Repeat Offender”

On October 4, 2023 the CFPB announced that it filed a lawsuit in federal court against a mortgage company. The CFPB claims that this company is a “repeat offender” as it sued the company earlier this year, and entered a 2019 consent order with this company. According to the CFPB, this company allegedly submitted erroneous mortgage data, which the CFPB says violates both the Home Mortgage Disclosure Act (“HMDA”) and a 2019 consent order. In its lawsuit against the company earlier this year, the CFPB sued the company for allegedly paying illegal kickbacks for referrals. The 2019 consent order concerned the company’s HMDA reporting, after the CFPB claimed that the company misreported data about applicant race and ethnicity.

Director Chopra said that this recent suit demonstrates the CFPB’s focus on “ending the cycle of misconduct by repeat offenders in the financial industry.” The current lawsuit alleges that the company’s 2020 HMDA submission contained widespread errors across multiple data fields; when the company resubmitted its data, it had found errors in 174,000 data fields, affecting nearly 20% of the company’s mortgage loan applications. According to the CFPB, the 2019 consent order included a requirement that the company fix its deficient data practices, and the 2020 submission allegedly showed that they failed to do so.

Bite 2: CFPB Takes Actions against International Money Transfer App

On October 17, 2023, the CFPB announced that it had taken action against an international money transfer app, claiming that it violated the Electronic Funds Transfer Act (“EFTA”) and Remittance Transfer Rule. The CFPB claimed that the operator of the mobile app allegedly deceived customers about the speed and costs of remittance transfers, forced consumers to waive legal rights, failed to provide required disclosures and receipts, and failed to properly investigate disputes. According to the CFPB, the company violated the EFTA when it required users to waive the company’s liability for losses incurred through the app, as the EFTA provides that the rights conferred by the EFTA cannot be waived. The CFPB’s Remittance Transfer Rule requires that consumers receive timely receipts, specific disclosures about funds availability and correctly calculated exchange rates- all of which the company allegedly failed to do. 

The CFPB also alleged that the company committed deceptive acts and practices by falsely claiming that transfers would be delivered instantly and that customers would not incur fees. The CFPB’s order requires the company to refund consumers who were charged fees on transactions that were marketed as “fee-free” or whose payments were not delivered on the date promised. The company will also have to pay a $1.5 million penalty to the victim relief fund.

Bite 1: CFPB and FTC Take Action Against Rental Screening Organization

On October 12, 2023, the CFPB and the FTC announced actions against a rental screening subsidiary of a large consumer reporting conglomerate, for violations of the Fair Credit Reporting Act. The CFPB and FTC have alleged that the subsidiary failed to take steps to ensure the rental background checks were accurate and withheld the names of third parties providing the inaccurate information from renters. Together, the agencies have requested that a federal court order the company to pay $15 million and make changes to how it reports evictions. The CFPB separately ordered the conglomerate to pay $8 million for allegedly lying to consumers about timely placing or removing security freezes and locks on the credit reports. 

According the CFPB, the conglomerate told consumers the requests were completed when they were actually placed into a years-long backlog. The joint action by the CFPB and the FTC against the rental screening subsidiary included allegations that the company failed to take steps to produce accurate reports, including failing to share updated information that evictions had been dismissed and permitting the inclusion of sealed records and multiple entries about the same case. The subsidiary also allegedly failed to identify who provided inaccurate information, leaving tenants unable to contact the provider to correct the inaccuracies. If entered by the court, the subsidiary will pay $11 million to harmed consumers along with a $4 million penalty into the CFPB victim relief fund.

Extra Bite: FTC Announces Proposed Rule on “Junk Fees”

On October 11, 2023, the FTC released a notice of proposed rulemaking that would prohibit junk fees, which it described as “hidden and bogus” fees that harm consumers. The FTC said that these fees can cost consumers tens of billions of dollars per year. The rulemaking comes after the agency requested public input (via an Advance Notice of Proposed Rulemaking) last year on whether a rule would help to eliminate these unfair and deceptive charges. After receiving more than 12,000 comments, the FTC is now requesting a new round of comments on a proposed junk fee rule. 

Under the proposed rule, businesses would have to include all mandatory fees when telling consumers a price, and the rule would contain enforcement provisions that would allow the FTC to seek refunds and monetary penalties for noncompliance. The rule would ban the practice of so-called “bait and switch” pricing tactics that hide mandatory fees by requiring advertised prices to include mandatory fees and would also ban what the FTC described as “bogus” fees, where the business either does not disclose or misrepresents what the nature or purpose of the fee is. The proposed rule would give the FTC more enforcement authority to seek refunds for harmed consumers and impose penalties of up to $51,200 per violation. The FTC is seeking public input on 37 questions, with comments due 60 days after the proposal is published in the Federal Register. Congresswoman Maxine Waters issued a press release today applauding the FTC’s (and CFPB’s) efforts crack down on junk fees and stated that “in the coming weeks, I look forward to further building on this effort by unveiling additional legislation to more expansively address junk fees in the financial services and housing industries.”

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.

SCRANTON, Pa.– Abrahamsen Gindin LLC (AG Law), a multi-state creditors’ rights firm headquartered in Scranton, Penn., is pleased to announce a strategic partnership with financial technology company Heka Global.

AG Law currently operates in New York, New Jersey, Pennsylvania, Delaware, Maryland, West Virginia, and Washington, D.C., with plans for further expansion. Heka Global, based in New York City and Tel Aviv, uses open-source data and proprietary data analytics to enable financial institutions to better assess and resolve nonperforming loan portfolios.

Idan Bar Dov, Heka Co-Founder & CEO, is thrilled about the strategic collaboration with AG Law. “This partnership brings together Heka’s cutting-edge data models and AG Law’s debt collection expertise,” Bar Dov said. 

“Together, we are on a mission to reshape the consumer debt space, revolutionizing the way portfolios are managed; permitting the servicing of accounts more effectively, and helping clients achieve their financial goals,” he added.

AG Law Managing Member Joshua Gindin, Esq., is equally excited about the partnership. “The AG team is delighted to join forces with Heka to create a state-of-the-art operation,” Gindin said.

“Utilizing Heka’s modeling capability will enable us to provide our respective clients with even better results. The combination of Heka’s superior analytic know-how and AG Law’s collection expertise is a winning formula,” Gindin added.

Contact: David Aglira, Director of Collections & Recovery Strategy daglira@ag-lawllc.com, (215) 620-9852 Direct

COPLEY, OH — DebtNext Software announces that I.C. System achieved the
inaugural accredited partner of the newly established dPlat Partner
Accreditation Program.  This program has
been developed to provide creditors with complete peace of mind when selecting
collection partners to integrate with their DebtNext platform (dPlat).

To achieve accreditation, potential partners must undergo a
comprehensive evaluation by the DebtNext compliance team in the areas of
Integration, Authentication, Remittance Management, and SOC 2 Compliance.  I.C. System has showcased excellence across
all these crucial aspects, and DebtNext is extremely proud to have them as an
official partner.

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.

To obtain more information on the dPlat Partner
Accreditation Program, reach out to Frank Ellenberger, Director of Strategic Initiatives
(sales@debtnext.com). 

Digital marketing principles, used for years, now drive success in digital collections. This blog highlights the key principles that translate to collections and recovery efforts.

The Collections Industry Can Learn from the Success of Digital Marketing

Marketing does it…and does it really well for the most part. Operating effectively in the digital age for a while now, the marketing industry successfully blazed a trail for other industries. Many others now draw inspiration from the digital victories of marketing. Debt collections is no different; however, it’s still early in its digital journey.

We need to start by being real here, at its core, collections always involves “selling.” Collectors, trained in effective persuasion techniques, can encourage customers to prioritize past-due payments. Digital collections takes this one step further by removing the agent and persuading customers through digital channels, which can make the payment decision even easier.

Let’s explore key digital marketing principles and when applied correctly, how they would enhance digital collection efforts.

Digital Marketing Principle: Reach Consumers Where They Spend Screen Time

Before we go down this road, know that all our suggestions are made under the umbrella of communicating with customers in collections compliantly. Adherence to all collection’s rules and regs must be at the heart of any communication strategy for this customer cohort.

For marketing, social media has become a lucrative channel due to its widespread user retention and engagement. While digital collections has not fully made the leap into using social media, the underlying marketing principle applies: interact with customers where they spend their time.

In collections, the focus is on email and text messages.

For instance, according to Pathwire Research, 84% of consumers check email at least once per day. This combined with the fact that we live in the age of smartphones, puts two key digital contact channels (email and text), in the palm of the customer’s hand, nearly 24/7.

Emails and text messages (for most) are an easier, on-the-go and more convenient way of communicating. Compare this to a collections phone call, where time, a quiet location, and above all, patience, is required.

Compelling Content Captivates the Customer 👇

A catchy, alliterative header or well-placed emoji can prompt customers to open your message. The first hurdle in digital collections outreach is getting the customer to open the message using only the sender name and subject line.

Collections Messaging Tips to Avoid Being Ignored or Purged from Inboxes

• Ensure the subject line or opening lines clearly convey the purpose of your message.

• Use the appropriate tone to encourage customer engagement; avoid a stern, dunning approach, which quickly moves to trash.

• Offer self-service options within the digital message instead of directing customers to your call center.

• Consider using emojis strategically in subject lines or opening lines for added appeal, but choose them carefully if you go that route

  –   Emojis such as fire, cannonball or alarmed face are highly inappropriate.

  – These emojis: typing text bubble, index finger pointing down or alarm clock could help your message get noticed

  – Note: the choice to use emojis also depends on your overall company branding and tone.

• Be mindful of how the message appears on smartwatches and wearables. Message text (especially emojis) may look differently on these devices

Digital Collections Messages Should Make Taking Repayment Action Easy

Once the customer opens your digital collections message, ensure that it is easy to understand and includes clear instructions for taking action. Provide payment links or links to relevant (and digestible) hardship information for prompt self-service.

In the world of digital communication, attention spans are short. Success lies in quickly engaging the customer, stating your case concisely and facilitating self-service.

Use a Multi-Channel Collections Approach to Create a Seamless Experience

Multi-channel marketing creates a seamless experience for a customer to interact with and be aware of a company as they navigate from one channel to another. These channels can include social media, streaming services, website, email and/or text messages (among many others). For companies engaging in digital collections, the engagement channels might be limited, but the concept still rings true.

Creating a multi-channel experience for a customer is not easy, but it is achievable. Documenting customer journeys with a focus on their digital experience begins to frame a digital collections strategy. Capturing customers’ preferred contact channels represents a significant first step toward implementing a digital collections strategy.

To make a digital collections strategy truly shine, you can incorporate software that actively manages your multi-channel digital collections activities. Many software tools exist to help companies efficiently organize and execute digital collections strategies. Some of these applications boast surprisingly short implementation times expediting your digital collections deployment.

The Consent Standards in Marketing Also Apply to Collections

It would be irresponsible to discuss contacting customers via digital channels without addressing the ever-important concept of consent. Just as it applies in digital marketing, it applies to digital collections. The recent implementation of Reg F heightened the scrutiny on email and text communications for collections. However, it is not impossible to effectively use these channels to communicate.

Keep these 4 points in mind as it pertains to consent to keep yourself covered:

1. Collect it…Have a mechanism in place to collect consent. Make it a point to collect text and email consent through as many avenues as possible.

2. Store it…Collecting it without a central repository to store it will do you no good. Be sure that there is a “source of truth” system for all things consent related.

3. Confirm it…Be sure that all digital communications include the ability opt-out or unsubscribe.

4. Maintain it…Ensure that you can act on consent revocations or unsubscribe requests. The action must also be prompt, tracked and stored as above.

WEST SENECA, N.Y. — P&B Capital Group (P&B, LLC) and its employees are proud to showcase their sponsorship of two youth softball teams in the Buffalo area. P&B is sponsoring USSSA Pride 14U and 16U for their entire season. This initiative is not just about softball; it’s about fostering a sense of belonging, building character, and instilling valuable life skills in the young members of our community. P&B Capital Group understands the power of community involvement and the profound impact it can have on shaping the future. 

“I am immensely proud of our community involvement efforts at P&B,” said Ryan Kazmark, P&B Capital Managing Partner. “We believe in the power of sports to inspire, nurture, and transform young lives. Our commitment to fostering a strong sense of community, teamwork, and discipline aligns with our core values. Through initiatives like this, we aim not just to make a difference but to create a legacy. We envision a community where every child has the opportunity to thrive, and we are dedicated to playing an active role in making that vision a reality.”

Building Community Through Youth Sports

Sponsoring youth softball teams goes beyond the boundaries of sports fields. It forms the cornerstone of a strong community by promoting teamwork, discipline, and a sense of camaraderie among young athletes and even the staff at P&B, LLC. 

Through this sponsorship, P&B Capital Group is investing in the development of young children, ensuring they grow up with essential life skills that will serve them well in their future endeavors. P&B Capital also proudly promotes living a healthy lifestyle and teaching the youth the significance of dedication and hard work through sponsorships like these. 

Beyond the field, sponsoring local clubs boosts local engagement and involvement in the Buffalo area. It strengthens the community by encouraging families to come together, support their young athletes, and celebrate achievements collectively. This sense of unity ripples through the entire community, fostering a positive environment for everyone. When schools don’t have to worry about funding of their youth teams, they can instead invest in the education these students get inside the classroom. 

A History of Involvement

At P&B Capital Group, community empowerment is more than just a metric to look at; it’s a way of life. The company believes that businesses have a social responsibility to give back to the communities that support them. Through initiatives like sponsoring youth softball teams, P&B Capital Group exemplifies its commitment to creating a better tomorrow. P&B, LLC spends time with its employees understanding the best ways to give back to the community, and investing in the team’s families and future. 

The organization has supported many charities and youth programs like Jiu-jitsu Training for Disabled Veterans to better help local and national communities. To learn more about P&B’s donation efforts, or to learn more about the organization as a whole, please visit their website. 

About P&B Capital Group

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

Texting is the most effective way to reach delinquent consumers, but, like all communication methods used in debt collection, it’s not easy to comply with regulations. 

What does Jesse Bird, Chief Technology Officer at TCN recommend? 

In a word, flexibility. 

Some collections departments are “really rigid” in the way they want to use texting, but, according to Bird, “[u]ltimately, it may not work that way.” 

“Texting is possible,” says Bird, “but the carriers are the gatekeepers currently. If they are unsatisfied with your policies, your procedures, your controls, your consent management or any of those things, they will ask you to make changes. If you don’t make the changes, you’re not going to get your messages through.” 

What else does Bird recommend when it comes to collections contact strategies?

 

1 – Identify small wins and take them 

Many companies in the ARM space want to embrace technology, but it can be complicated to identify how the technology can be integrated into a collections strategy. Bird says: “[collections departments] shouldn’t neglect things like AI or generative or ChatGPT or machine learning. [They] shouldn’t, but [they] have to see how [those technologies] fit into their overall strategy in easy ways first.” He adds: “24-hour payments available via phone, via text, via portal, or data processing automation or agency efficiency tools for agents or these sorts of things,” are all small wins. 

2 – Advocate for clearer regulation 

It’s a longer game, but Bird says it will be important that the industry “demonstrates that these messages are wanted, allowed, and legal and they’re being unfairly targeted.” It’s no secret: consumers prefer to deal with most business matters via text. Collections business is no different. The industry must make that clear to the regulators. 

If you’re interested in how to get involved in advocating for the ARM industry, check out the Consumer Relations Consortium.

3 – Get a good partner 

The ARM industry is a complicated one. Bird recommends finding a partner who can help navigate the regulations and help you decide how to integrate technology to make your business better.  

Listen to our Executive Q&A with Jesse Bird from TCN, or read the full text below. 

Erin Kerr:

Hello everyone. I’m here with an episode of Executive Q&A. I’m Erin Kerr, Director of Content for Collections and Recovery, brought to you by Auriemma Roundtables, and I’m joined today by Jesse Bird, CTO at TCN. Jesse, can you give us a quick introduction?

Jesse Bird:

Sure.  I’m the Chief Technology Officer at TCN. TCN is the contact center of choice for a lot of collections agencies. We have been doing collections work in the ARM space since 1999, almost essentially since we were founded. We’ve been around since 1999, and I’ve been part of the company since 1999.  I’ve got kind of a long history working in contact centers, especially with dialers and in issues related specifically to what’s going on in the ARM world. I try to keep up on this sort of stuff, so I’m happy to be here and spend some time with you.

[EK]:

It’s great to be with you, Jesse. I always love our conversations. I’m going to just jump in. What do you think is the biggest challenge the ARM industry is currently facing?

[JB]:

It seems currently there’s a mix between a few issues that are front and center regularly. The first one is the new regulatory environment. It’s not really the traditional regulatory environment. I’m sure we’ll talk about that a little bit. The second one is the migration to digital channels for contact and payment strategies. And the third one is the adoption of new technologies faster and faster. All three of these things I think are pretty intimately related.

[EK]:

Okay. Can you go into why you feel that those are the biggest challenges?

[JB]:

I think it’s clear that a lot of customers prefer digital first options for their communications, right? Table stakes with a contact center is a great voice game. You have to do inbound; you have to do outbound, and you have to dial. A lot of times you have to have predictive AI. All of that is the table stakes. And now, [collections agencies] are expected to implement digital channels and [understand] how that integrates with the workflows. There is SMS, email, self-serve portals, chat, and that’s just the starting point for how digital engagement should go and how it should work. Each one of these digital channels comes with their own challenges and their own difficulties.

Looking at SMS for starters, SMS is not regulated by the FCC [the same way that] voice [channels are]. Voice is under Title II communication, which is a pretty heavy-handed regulation. SMS is regulated under Title I of the Communications Act. [Title I] is a light touch framework. The endpoint of that is the carriers have a lot of latitude in how they manage their traffic and how they terminate messages on their network. This essentially means that carriers can allow or disallow traffic based on their own rules, their own analytics, and their own understanding of what may or may not be wanted by their end users. Along with that, they’ve also created some strict rules. They call them the SHAFT categories.

SHAFT means sex, hate, alcohol, firearms, tobacco, cannabis, gambling, affiliate marketing, and high-risk financial services. I have tried to make sense of that acronym. I’ve not really been super successful. But what that means is they’ve put blanket bans on those types of services. Unfortunately for the industry, while application to person text messaging is generally allowed, the carriers have been aggressive at bundling collections messaging content into high-risk financial services.

When [collections agencies] want to engage with the carriers, [there are a lot] of rules. They have registration that you need to do, they want you to register your brand, they want you to demonstrate compliance. They want you to demonstrate consent. These are not insurmountable challenges, but they’re challenging, right? That’s how the new regulatory environment is starting to emerge: do no harm.

If you do harm, the government’s going to come after you. The carriers are being proactive. That’s a totally different approach than saying: “my policies, procedures, and controls are good. And if the government comes and looks, they have them.”

Now, it’s proactive. I need to demonstrate my policies, procedures, and controls, and the person I’m demonstrating them to is not the government, it’s a third-party big brother. It’s a totally new way that people have to think about how they’re going to start, in particular for SMS. The second thing is there’s also some interplay between the CFPB and the FCC.

 The FCC is the body that’s overseeing communications and regulations generally. In this instance, especially around digital communications, they’re a little bit at loggerheads, right? The CFPB has encouraged, and even given safe harbor, to types of digital communications, and it seems clear under those rules that [agencies] can manage consent by opt out, and that should be allowed. There are ways to engage with people and they’ve given good and specific guidelines, but the FCC via the light touch approach has really fostered a much more rigid stance. There is a complicated regulatory environment, and essentially the much more rigid stance seems to be what’s carrying the day, at least around SMS.

When you look at other digital channels like email, there are some challenges around getting messages delivered and around dealing with the big three email providers. You have to learn how to contend with how they might mark and label your emails. You have to set up your SPF, your DKIM, your DMAR, some of the technical things that need to be done in order to get your emails through. As agencies start to develop digital communication channels, it’s important that you have some expertise in-house or a really good partner.

The last challenge is adopting new technology. There are some overhanging questions as [agencies] adopt new technology that they are wrestling with: AI, work from home options, how the interplay between the government works, how are they are going to manage the costs because new technology costs a lot.

As we’ve started to develop AI solutions, I‘ve had a few conversations with people where their eyes get a little big once they realize how expensive some of these solutions are. TCN has always thought about how we are going to democratize this technology, make it affordable and available. We’re doing a really good job with that with some aspects of AI, but it’s difficult, especially for some agencies that are running on tight margins to figure out. They think: I need to adopt this. I also need to manage the costs. Then they have to think about how they are going to manage productivity. That’s a long-winded way of saying there are a lot of challenges, but the biggest one are regulatory, digital channels, new technology, and I think that they’re all basically related.

[EK]:

Absolutely. To your point about cost: that upfront cost seems really high. It’s really difficult for a lot of agencies to stomach, but at the end of the day, if you don’t adopt some of these tools, it won’t really matter because you probably aren’t going to get any market share. There are cost savings to down the road. Thanks for breaking all that down. Now that we’ve outlined those challenges, are there ways of getting around those challenges?

[JB]:

One of the things that I say internally from time to time is: you invest or you die. You move ahead or you die. If you stop moving, you die eventually. There are ways to get around these challenges.

My opinion, and this may be a little bit biased, is that first you need to have a good partner. There is a lot of deep knowledge and expertise around the way to handle some of these challenges. You should find a partner that is both committed and invested in the ARM space and knows the industry. Because this industry is not like a lot of other industries, so find somebody that’s willing to put up time, money, and effort into understanding these issues and the best way to navigate the challenges.

TCN has been there. We spend a lot of time, money, and effort making sure that we can help people navigate these challenges. We spend a lot of effort interacting with the FCC, interacting with the CFPB, participating in the rulemaking so that we can advocate on the industry’s behalf. It’s one of the things that we feel sets TCN apart from others in the industry. It’s clear that there are probably some players that aren’t interested in some of these challenges as much, and some are even stepping away. We’re not, that’s our focus. We’re going to help the ARM industry navigate the rules. We’re going to advocate at the Federal level, and we’ve been implementing solutions that work around all of these challenges.

The next thing to get around it is you have to be flexible. I have talked with some agencies that are really rigid in what they want to do, and they have a really clear idea of what they want to do and how it should work. Ultimately, it may not work that way. You may get similar results, but you may not get it done exactly the way that you want it to do. We spent a bunch of time earlier in this conversation talking about texting. Texting is possible, but the carriers are the gatekeepers currently. If they are unsatisfied with your policies, your procedures, your controls, your consent management or any of those things, they will ask you to make changes. If you don’t make the changes, you’re not going to get your messages through. Agencies have understand how to do that. They have to be flexible and work with them because they are basically the gatekeepers. They are the de facto standard. There are only three [carriers] in United States, you have T-Mobile, ATT, and Verizon. [They are] all running very similar rules that cover more than 98% of all cell phones in America. You have to play by the rules. The FCC has essentially set them up so that they can make the rules. Be flexible.

The second is, especially in the last 12 months, technology has come fast. There have been a lot of cool proofs of concept. ChatGPT and Generative AI has been groundbreaking. For some, there is a desire to reach for the neatest and greatest and best thing. I believe that it’s important that [agencies] take the easy wins first. I talk to quite a few agencies, and I’ve talked to several recently that are looking for some of this [new technology]. They want to put generative AI in their contact center immediately. They think that’s going to be the thing. And you start talking to them about their processes and their policies, their procedures, their controls, the things that they’re doing now, and [there are quite a few] things that they can grab that are easy, that aren’t going to be as expensive and that are right in front of them.

Even if it’s as simple as having 24-hour payments available via phone, via text, via portal, or data processing automation or agency efficiency tools for agents or these sorts of things.

[The agencies] may be running down the street after a hundred-dollar bill and forget that they have about a hundred dollars in their pocket. They need to stop and count what they have. Not to diminish the importance of these technologies, because these technologies are really important. What I’m saying is they can’t implement them all at once.

I advise my own IT staff to do this as we were picking features: pick the easy wins, take them, and then do the next thing, and then do the next thing. You may have heard of a guy, and his name is Simon Sinek, he’s like a business consultant, right?

[EK]:

Yes.

[JB]:

He says a lot of times businesspeople forget this: we are not playing a game to win or lose. We’re playing an infinite game. The most important thing is that you’re still playing tomorrow.

Sometimes, if you don’t take the easy win, you’re not going to play tomorrow. I don’t want to diminish how important it; you shouldn’t neglect things like AI or generative or ChatGPT or machine learning. You shouldn’t, but you have to see how they fit into your overall strategy in easy ways first. Make it part of your ongoing plans for improvement. Don’t jump right to the end game. You need a consistent plan on how you’re going to improve every day, how you’re going to get better every day.

This is also a place where I think most agencies would be well-served to have a good partner. TCN has been investing in our AI capabilities. We’ve been investing in our machine learning capabilities, especially targeted towards the ARM space. We’ve done a lot with analytics, conversation analytics. We’re doing quite a bit trying to improve our bot automation. We’re also doing quite a bit with workforce management and agency efficiency tools. Find a partner that’s implementing these things that get you a lot of easy wins with AI without having to do a lot.

[EK]:

Absolutely. I know that [TCN] is deeply involved in a lot of that stuff, and you’re obviously involved in our Consumer Relations Consortium, which is doing advocacy on behalf of agencies with those regulators. I agree; it’s important for agencies to be strategic especially now, as we’re not seeing that forward flow that we thought we would see, and the margins are getting thinner. For a minute, I just want to focus on texting specifically because that’s a huge deal [for agencies]. I want to ask you, what do you see on the horizon in terms of making it easier for collection agencies to text consumers?

[JB]:

I’m not super keen that it’s going to get easier in the very near term. I think we’re going to have to continue to work with the carriers and be flexible and find the types of campaigns that they’re going to allow and work on that. It’s possible. There has been an industry-wide ongoing challenge around texting, and it is possible, but you’ve got to be flexible. The carriers require that you demonstrate consent and that you show them the types of campaigns that you’re sending. If you do that, you’re going to get your messages out. If you’re inflexible in what you send and the messages exactly that you want to send, you probably won’t get your messages out. And we’ve helped dozens of agencies set up can texting campaigns and get their messages out consistently. If you follow the current best practices, and are willing to be flexible, it will happen.

I believe it will continue to get a bit more challenging before it begins to swing the other way. I believe that the only way that it’s going to swing the other way is if the industry mobilizes and advocates for some change in the FCC. I think that that’s going to be important that [the industry] demonstrates that these messages are wanted, allowed, and legal and they’re being unfairly targeted. We have had some conversations that I think are going to be beneficial to that end. I think that’s how the pendulum will begin to swing. If we can demonstrate some harm that’s going on in a way that resonates with the regulators. If we do that it will start to swing back.

TCN has been active on this front. We do quite a bit of work trying to make sure that we are involved in the rulemaking and engaging with regulators as much as possible. I think that in time, the, the rules will find a way that agencies can work through. I liken this back to when everyone got really frightened about the auto dialer definitions.

There are a lot of solutions that people were starting to come up with around manual calling and human intervention on some of the calls. They’ve eventually found a path that the industry could walk through reasonably.

[EK]:

That makes sense. Part of the Consumer Relations Consortium’s mission this year was to engage with the FCC around this specifically. [TCN] was part of those conversations they’re ongoing, but I agree, I think advocacy is the industry’s best bet to try to get texting to be accepted by the carriers. Well thank you so much, Jesse, for answering all my questions. I’ll turn it over to you for the closing and final thoughts for the audience.

[JB]:

Thank you for your time as well. I enjoy engaging about these sorts of things. As the industry moves forward it may start to seem like there is a lot to grapple with. If you have a good partner, you’re going to be able to continue to improve. That’s one of the things that we say: we’re going to make sure that we bring the best of breed contact center for the ARM space to bear, for the industry, for customers of all size.

I think with some creativity and some persistence, it’s possible and likely to thrive in the current environment, even as you’re having to bring on more digital channels, even as you’re having to grasp and wrestle with new types of communications, and even as you’re asking to make sense of how you’re going to walk through the regulatory landmines that are ahead of you. I appreciate the opportunity to talk about all of that.

[EK]:

Thank you again so much for your time today, and thanks everyone for tuning in to this episode of Executive Q&A. I’m Erin Kerr with Collections and Recovery. This is Jesse Bird with TCN. Thanks so much, Jesse, and have a great rest of your day.

The Delete Act (SB 362), signed into law by California Gov. Gavin Newsom on October 10, 2023 imposes additional disclosure and registration requirements on data brokers. It requires data brokers to support deletion requests through a central “deletion mechanism” managed by the California Privacy Protection Agency (CPPA). The law also empowers consumers to request deletion of their personal information from all registered data brokers with a single submission.

As our Privacy + Cyber professionals explain in a more detailed summary, the expanded new requirements of the Delete Act are a legal and operational game-changer for organizations that qualify as data brokers. Data brokers will now have to provide more information during registration, including details about their collection of minors’ personal information, precise geolocation data, and reproductive health care data. They are also required to compile and disclose certain metrics related to CCPA requests annually, undergo audits, and maintain audit records for at least six years. The act presents several challenges for any organization deemed to be a data broker, including determining applicability, managing broader business impacts, handling technical complexities related to verification of requests and a continuing duty of deletion, and bearing potentially high costs.

Even if your business isn’t considered a data broker, data obtained or used by your business likely comes from a data broker. Our team’s advisory includes best practices to comply with the growing number of data protection laws in the United States, including conducting data-mapping assessments, reviewing registration requirements, maintaining deletion request policies, developing record-keeping policies, conducting training, and considering the impact of data deletion on vendor management and contracts.

American Banker recently reported that the CFPB is planning to substantially increase the size of its staff, particularly its Enforcement Division staff. 

The American Banker article was based on an internal memo from Eric Halperin, CFPB Enforcement Director, which was sent to CFPB employees on September 21.  As reported by American Banker, the memo indicates that Director Chopra has allocated about 75 new full-time employees to the Enforcement Division.  As the CFPB currently has approximately 150 enforcement attorneys and support staff, the addition of the 75 new full-time employees would increase the number of full-time employees in the Enforcement Division by 50%.  The memo also references CFPB plans to hire additional staff in its legal, operations and research, monitoring, and regulations divisions.  American Banker reports that the CFPB will begin recruiting and hiring the new enforcement attorneys and staff this fall and into 2024.

The article includes the following quote from Mr. Halperin’s memo:

“These additional resources will enable us to open more investigations, including matters with significant market impact and against large market actors, consistent with the Bureau’s priorities.  We also will be in a better position to meet resource demands from our increasing number of matters in contested litigation.”

American Banker reports that the memo also indicates that the expansion of the CFPB’s Enforcement Division includes plans to hire a litigation deputy, assistant litigation deputies, and other support staff and to create a fifth litigation team.  Mr. Halperin is also quoted as having said in the memo that “[t]he office will benefit from standing up a fifth litigation team that is as strong as the existing four teams.  It will take several months to build the fifth litigation team and will involve both internal moves as well as new hiring.”

This is truly an ominous development which will undoubtedly greatly increase the volume of investigations launched and lawsuits brought by the CFPB.  This increases the risk that more banks and non-banks will be targeted by the CFPB, thus making it increasingly important for them to put their compliance houses in order.

The U.S. Court of Appeals for the Seventh Circuit recently affirmed a trial court’s summary judgment ruling in favor of a debt collector asserting a bona fide error defense to an action under the federal Fair Debt Collection Practices Act.

Here, the debtor disputed the debt by emailing two officers of the debt collector company, and not by following the dispute procedures described in the written instructions provided by mail to the debtor.

A copy of the opinion in Ross v. Financial Asset Management Systems is available at:  Link to Opinion.

A debtor defaulted on a debt then later married his spouse. The debtor and spouse shared a phone plan and office. In an attempt to collect the debt, a debt collection company initially mailed the debtor a letter. The debtor did not follow the dispute process as outlined in the letter and separately emailed the chief executive officer and vice president of operations of the collection company to dispute the debt.

The officers of the company did not recall seeing the debtor’s dispute email. As a result, the company took no action to address the debtor’s dispute letter. Therefore, the company did not follow its standard policy of stopping collection activity and proceeded to contact the debtor’s spouse via telephone. The company contacted the debtor’s spouse 12 times in an attempt to reach the debtor to collect the debt.

The debtor’s spouse (“plaintiff”) ultimately sued the debt collector (“defendant”) alleging the calls violated the FDCPA, 15 U.S.C. § 1692 et seq. The plaintiff asserted the defendant violated § 1692g(b) by continuing debt collection activities after the debtor disputed the debt and without first providing verification of the debt. The plaintiff further alleged the defendant violated § 1692d and 1692d(5) because (1) the defendant continued to call the plaintiff after the debtor disputed the debt, (2) the defendant continued to call the plaintiff after she notified the defendant that she does not use her phone, and (3) the defendant disconnected calls with the plaintiff after she answered. 

The plaintiff alleged that the 12 unwanted phone calls were illegal and caused her to experience stress, which physically manifested in crying and difficulty sleeping. The plaintiff and defendant both moved for summary judgment. The trial court held the plaintiff could not bring a claim under § 1692g(b) because she is not a “consumer” for the purposes of that provision. The trial court also concluded that a reasonable jury could not infer that the defendant violated § 1692d and 1692d (5), and even if it could, the trial court found that the defendant would prevail under the affirmative defense of bona fide error under § 1692k(c). The plaintiff appealed.

On appeal, the plaintiff argued that the trial court erred by finding that she was not a “consumer” under 15 U.S.C. § 1692g(b). As you may recall, the statute provides that if the consumer notifies the debt collector in writing that the debt is disputed within 30 days after receipt of the notice, the debt collector must cease collection of the debt until the debt collector mails verification to the consumer.

Here, the Seventh Circuit assumed, without deciding, that the plaintiff has a cause of action in order that it could address the merits of the trial court’s decision addressing the defendant’s bona fide error defense. See Knopick v. Jayco, Inc., 895 F.3d 525, 529–30 (7th Cir. 2018); Dunnet Bay Constr. Co. v. Borggren, 799 F.3d 676, 689 (7th Cir. 2015).

The bona fide error defense requires a debt collector to show that (1) the violation was not intentional, (2) the violation resulted from a bona fide error, and (3) the debt collector maintained procedures reasonably adapted to avoid any such error. Kort v. Diversified Collection Servs., Inc., 394 F.3d 530, 537 (7th Cir. 2005).

Notably, this defense does “not require debt collectors to take every conceivable precaution to avoid errors; rather, it only requires reasonable precaution.” Kort, 394 F.3d at 539; see also Hyman v. Tate, 362 F.3d 965, 968 (7th Cir. 2004).

The plaintiff did not properly dispute the first two elements, and the only question concerned the third element — that is, whether or not the defendant maintained procedures that were “reasonably adapted” to avoid any such error.

The plaintiff argued they did not because the vice president of operations’ deleted e-mail showed that the defendant did not maintain procedures reasonably adapted to avoid the error and did not have procedures to detect deviations from the prescribed dispute procedures. The plaintiff’s argument relied on the case of Morris v. Choice Recovery, Inc., No. 18-cv-05548, 2020 WL 6381926 (N.D. Ill. Oct. 30, 2020). In Morris, the plaintiff faxed a dispute to the administrative team in charge of forwarding all disputes to a particular individual who logged the disputes in an internal database. 

However, the record on appeal showed that training was not the only procedure the defendant had in place, and the type of error here was different than Morris because the defendant set up specific procedures to dispute a debt. Additionally, the defendant mailed a letter with instructions to dispute a debt that directs consumers to its website or standard mailing address and sought to avoid communications to corporate officers whose day-to-day duties seldom include consumer communications.

Notably, in emailing the CEO and VP of operations, the debtor circumvented the defendant’s instructions for how to dispute his debt outlined in the letter. Specifically, the debtor pulled a Massachusetts registration document to uncover the email addresses of the defendant’s employees. Although the officers of the company receive training to forward dispute emails to its client services department, they are normally not involved in day-to-day communications with debtors.

Moreover, unlike Morris where the plaintiff properly disputed the debt and the error occurred while executing a routine procedure, the plaintiff here invented an alternative channel to dispute the debt and thus no one at the debt collector company noticed the dispute, which would have started its procedure. 

As a result, the Seventh Circuit held that the defendant took reasonable steps to avoid the bona fide errors caused by the debtor’s behavior, and even assuming the plaintiff is a “consumer” under § 1692g(b) and that the defendant violated that provision, the bona fide error defense shields the defendant from liability under § 1692g(b).

Next, the plaintiff argued the trial court erred by finding that a reasonable jury could not infer that the defendant intended to annoy the plaintiff, in contravention of 15 U.S.C. § 1692d. Section 1692d provides: “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.”

The Seventh Circuit dismissed this argument and noted that same facts and logic shield the defendant from liability through the bona fide error defense because if the defendant’s procedures had been followed, the plaintiff’s number would have been immediately placed on a do-not-call list. Therefore, the plaintiff would not have continued to receive calls and the plaintiff ultimately complied with the requirements of the bona fide error defense.

Lastly, the plaintiff argued that the defendant intended to annoy her by calling and then hanging up on her twice, in violation of § 1692d (5). The Seventh Circuit rejected this argument based on the bona fide error defense because the defendant had policies and procedures that should have prevented these calls from going out to the plaintiff in the first place.

Accordingly, the Seventh Circuit affirmed the trial court’s grant of summary judgment in favor of the defendant debt collector.