ROCHESTER, N.Y. — Continental Service Group, LLC d/b/a ConServe, announces that they have once again earned a spot on Training magazine’s, 2024 Training APEX Awards. The Training APEX Awards ranking is determined by assessing a range of qualitative and quantitative factors, including financial investment in employee development, the scope of development programs, how closely such development efforts are linked to business goals and objectives, and their effectiveness of business outcomes resulting from training.

“The 2024 Training APEX Awards winners are the shining stars in the learning and development industry,” notes Training Editor/Publisher Lorri Freifeld. “They light the way for engaging, innovative, and continuous learning. We are thrilled to recognize their stellar accomplishments and dedication to helping their employees and organizations grow and succeed.”

“Our Organizational Development team, aligned with ConServe’s corporate Mission, Vision, and Values, delivers exceptional training, emphasizing compliance and ethics,” said George Huyler, ConServe Vice President of Human Resources. David Bucciarelli, Director of Organizational Development at ConServe said, “I’m proud of ConServe and our training team for earning the Training APEX Award for the tenth consecutive year. This acknowledgement from industry experts reinforces our position as a leader in providing exceptional training initiatives and programs that nurture talent within the organization.”

The rankings of leading organizations that excel at employee training was revealed on February 26, 2024 at the Training APEX Awards held in Orlando, Florida.

About ConServe

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients. Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands. For over 38 years, they have partnered with their Clients to provide unmatched customer service while simultaneously helping them achieve their accounts receivable management goals. Visit them online: www.conserve-arm.com

About Training magazine

Training magazine is the leading business publication for learning and development and HR professionals. It has been the ultimate resource for innovative learning and development—in print, in person, and online—over the last 55-plus years. Training magazine and Training magazine Events are produced by Lakewood Media Group. For more information about the 2023 Training Conference & Expo, please visit: www.trainingconference.com

In February 2024 the Minnesota Debt Fairness Act was introduced in the Minnesota Legislature. The proposed law seeks to amend the law governing debt collection, garnishment, and consumer finance.  The Minnesota Governor’s office has announced support for the Act. The proposed bill includes new terms and definitions, new prohibitions on collection activity, and creates other new rules regarding consumer debt. If passed, the law will drastically change how debt is collected in Minnesota and is sure to have long-lasting consequences for debt collectors and consumers alike. 

Terms and Definitions:

The proposed language adds some new terms while expanding existing terms’ definitions. The bill would introduce the term “collecting party,” which seems to be a catchall phrase used to replace collection agency, debt buyer, and/or collector throughout the bill. The full definition is “a person who, in the ordinary course of business, regularly engages in debt collection on behalf of the person or others.” It’s possible that original creditors and hospitals may be considered a “collecting party” under this definition.

The bill would also expand the definition of a collection agency or licensee (both of which would be considered a “collecting party”) to include attorneys whose principle or sole practice is debt collection.

Prohibitions and Exemptions:

The proposed bill would add greater restrictions on collection activity and what can be collected. The standout changes include:

• A complete prohibition on credit reporting any medical debt.
• A ban on communications that use automatic telephone dialing systems, or AI/prerecord voices when a consumer has asked that they not be contacted in that way.
• A reduction of garnishable wages from 25% to 10%.
• An exemption from garnishment of up to $5,000.00 in a bank account.
• An increase of the floor for garnishment from 40 hours per week to 80 hours per week.
• A person would no longer be liable for medical services provided to their spouse.

Rules on Consumer Debt:

Arguably, the biggest changes involve the statute of limitations for consumer debt as well as judgments on consumer debt. The amendments would include:

• A reduction of a consumer debt judgment’s statute of limitation to 5 years (down from 10 years.)
• A judgment on a consumer debt cannot be renewed.
• Debts incurred after July 1, 2024, would have a 3-year statute of limitations.
• Consumers will have both a private right of action to enforce the debt collection statute as well as the ability to recover costs and attorney’s fees if they successfully defend against a collection suit.

Information about the bill can be found here and the proposed language can be found here.

insideARM Perspective:

This proposed bill raises concerns about the future feasibility of debt collection in the state of Minnesota. Not only are timelines going to be heavily accelerated by the statute of limitations changes, but the process and amount that can be collected will be greatly impacted as well. Most importantly, this bill may have long-term consequences for consumers as the legislators focus more on the symptoms of consumer debt rather than on the root causes.

The Minnesota legislature has already introduced the bill and is looking to move this through quickly. Therefore, everyone in the ARM industry should utilize any contacts they have and coordinate with advocacy groups to get the message across to the legislators that this bill is so restrictive it will ultimately hurt consumers in the long run.

The Federal Communications Commission (FCC) has issued a final rule amending its regulations implementing the Telephone Consumer Protection Act (TCPA) to add new provisions addressing how consumers may revoke consent to receive autodialed or prerecorded voice calls or texts and the obligations of callers and texters to honor revocation of consent requests.

While the FCC generally asserts that these requirements are merely a codification of existing requirements, the new provisions could require significant operational changes.  The new provision on revocation of consent confirmation messages is effective 30 days after publication of the final rule in the Federal Register.  The new provisions on revocation of consent and the timeframe for honoring revocation of consent requests will be effective six months following publication in the Federal Register of a notice indicating that the Office of Management and Budget has completed any required review of the final rule.

Revocation of Consent.   

The final rule provides:

• Consumers may revoke prior express consent, including prior express written consent, to receive robocalls and robotexts by using any reasonable method to clearly express a desire not to receive further calls or text messages from the caller or sender.  Callers or senders of text message may not designate an exclusive means to request revocation of consent.

• Any revocation request made using an automated, interactive voice or key press-activated opt-out mechanism on a robocall; using a response of “stop,” “quit,” “end,” “revoke,” “opt out,” “cancel,” or “unsubscribe” sent in reply to an incoming text message; or submitted at a website or telephone number provided by the caller to process opt-out requests constitute examples of a reasonable means to revoke consent.  If a called party uses any such method to revoke consent, the consent is considered definitively revoked and the caller or sender may not send additional robocalls or robotexts.

• If a reply to an incoming text uses words or phrases other than those listed above, the sender must treat the reply text as a valid revocation request if a reasonable person would understand those words to have conveyed a request to revoke consent.

• If a text initiator uses a texting protocol that does not allow reply texts, the text initiator must (1) provide a clear and conspicuous disclosure in each text to the consumer that two-way texting is not available due to technical limitations of the texting protocol, and (2) clearly and conspicuously provide reasonable alternative ways for a consumer to revoke consent.  (In its discussion of the final rule, the FCC uses a telephone number, website link, or instructions to text a different number to revoke consent as examples of “alternative ways.”)

• When a consumer uses a method to revoke consent not listed in the regulation, such as a voicemail or email to any telephone number or email address intended to reach the caller, a rebuttable presumption is created that the consumer has revoked consent when the called party satisfies their obligation to produce evidence that such a request has been made, absent evidence to the contrary.  When a consumer has demonstrated that they have made a revocation request and the caller disputes that the request has been made using a reasonable method, a totality of circumstances analysis will determine whether the caller can show that revocation request has not been made in reasonable manner.

In its discussion of the final rule, the FCC indicates that when consent is revoked in any reasonable manner, the revocation extends to both robocalls and robotexts regardless of the medium used to communicate the revocation.  In other words, the FCC states that “consent is specific to the called party and not the method of communication used to revoke consent.”  For example, if the consumer revokes consent using a reply text message, consent is deemed revoked not only for further robotexts but also for robocalls from the same caller.

Revocation of consent confirmation text messages.  

The final rule provides:

• A one-time text message confirming a consumer’s request that no further text messages be sent does not violate the TCPA, provided the confirmation text only confirms the opt-out request and does not include any marketing or promotional information, and is the only additional message sent to the called party after receipt of the opt-out request.

• If the confirmation text is sent within five minutes of receipt, it will be presumed to fall within the consumer’s prior express consent.  If it takes longer, however, the sender will have to make as showing that the delay was reasonable.

• If the text recipient has consented to several categories of text messages from the sender, the confirmation message can request clarification as to whether the revocation request was meant to cover all categories of messages from the sender.  The sender must cease all further robocalls and robotexts for which consent is required absent an affirmative response from the consumer that they do wish to receive further communications from the sender.

Timeframe for honoring revocation of consent requests.  

The final rule provides:

• A request to revoke prior express consent or prior express written consent made in any reasonable way must be honored within reasonable time not to exceed ten business days from receipt of such request.

• Package delivery companies must offer package recipients the ability to opt out of future delivery notification calls and messages and honor an opt-out request within a reasonable time from the date of the request, not to exceed six business days.

NPRM for Wireless Providers’ Text Messages.  

In addition to the Order, the FCC is seeking comment on whether the TCPA applies to robocalls and robotexts from wireless providers to their own subscribers and, as a result, such providers must have consent to make prerecorded voice, artificial voice, or autodialed calls or texts to their subscribers.

ROCHESTER, N.Y. — Continental Service Group, LLC d/b/a ConServe, announce that The New York State Council of the Society for Human Resource Management, Best Companies Group and Rochester Business Journal have named ConServe as one of the 2024 Best Companies to Work for in New York. 

Best Companies to Work for in New York is a research-driven program that examines a company’s practices, programs and benefits and also surveys its employees for their perspectives. Best Companies Group managed the overall registration and survey process and also analyzed the data and used their expertise to determine the final rankings. 

“This year’s Best Companies to Work for in New York create a professional environment where people love their work. They know the employees in their organizations are the key to their success,” said Suzanne Fischer-Huettner, managing director, BridgeTower Media/Rochester Business Journal. “The Rochester Business Journal is pleased to join the New York State Council of the Society for Human Resource Management and the Best Companies Group in recognizing the achievements of these deserving companies.”

“We are incredibly honored to receive recognition from Best Companies Group, SHRM and the RBJ,” stated Rich Klein, President of ConServe. He emphasized, “Our success is driven by our exceptional team, who have been instrumental in our growth and achievements. At ConServe, we prioritize recruiting, hiring, developing, and promoting top talent, recognizing that our people are our greatest asset.”

To learn more about The Best Companies to Work for in New York and to review the complete list of winners, please visit:  https://rbj.net/2024/02/23/best-companies-to-work-for-in-new-york-announced-4/ 

About ConServe

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients. Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands. For over 38 years, they have partnered with their Clients to provide unmatched customer service while simultaneously helping them achieve their accounts receivable management goals. Visit them online: www.conserve-arm.com  

About Best Companies Group

Since 2004, Best Companies Group has specialized in identifying and recognizing great employers to work for. Best Companies Group is an independent research firm that ranks companies based on established research methodology. The surveys provide actionable, hard-to-obtain data that companies use to improve employee recruitment and retention. 

About the Rochester Business Journal

The Rochester Business Journal has served as the leading source of business news and information in Rochester, N.Y., for 37 years. In addition to its website, RBJ.net, and weekly print publication, the Rochester Business Journal publishes more than 25 special products a year including Book of Lists, Explore Greater Rochester, RBJ 75 and Schools Report Card. The Rochester Business Journal also hosts 12 annual events to recognize excellence and provide leadership opportunities. Those events include Forty Under 40, Icon Honors, Women of Excellence and Reader Rankings. In addition, the Rochester Business Journal facilitates virtual panel discussions bringing local experts from the business community together to discuss current topics and trends. Its Digital Marketing Solutions helps customers with social media, search engine marketing and optimization, retargeting, email marketing and more. The Rochester Business Journal and its sister publication, The Daily Record, which covers law and real estate in Western New York, are part of BridgeTower Media, the leading provider of B2B information, research, events and marketing solutions across more than 25 U.S. markets and industries.

In this article, we share a timeline of our monthly “bites” for 2023 applicable to debt collection. If debt collection in 2023 had a theme it would be medical debt. Medical debt woes transcend political parties and affect nearly all demographic groups. As the CFPB has pointed out, and as almost every American knows, medical bills are confusing and insurance disputes are common. The CFPB took aggressive action in 2023 to curb medical debt collection practices and to ensure that medical debt collectors are collecting on accurate, undisputed amounts.

While it was active and aggressive, the Bureau clearly sensed an existential threat to its authority. The U.S. Supreme Court’s decision about its funding structure loomed in the background for most of the year. And the Bureau’s public statements throughout 2023 took pains to highlight the authority of states and the Federal Trade Commission to enforce the Fair Debt Collection Practices Act and the Consumer Financial Protection Act’s prohibition on unfair, deceptive, and abusive acts and practices.

Bite 10: CFPB Finds 33% Decline in Collections Items on Consumer Credit Reports

On February 14, 2023, the CFPB released a report showing a one-third drop in collection tradelines on credit reports, from 261 million tradelines in 2018 to 175 million in 2022. The share of consumers with collection tradelines on their credit report also dropped by 20%. The CFPB indicated that reductions may be due to a strong labor market and emergency pandemic-related programs, but that the decline was also driven by fewer reports related to medical bills. The CFPB’s market monitoring found that medical debt collectors are moving away from furnishing information to credit reporting agencies. According to the CFPB, medical debt may be more difficult to verify, and the CFPB’s data integrity concerns may have made these collectors unsure of their ability to comply with the Fair Credit Reporting Act. Nonetheless, the CFPB found that medical collections tradelines remain a majority (57%) of all collections items on consumer credit reports. However, the nationwide consumer reporting agencies announced upcoming changes to medical collections reporting that will remove amounts less than $500 and paid medical collection tradelines from consumer reports. While this will reduce the total number of medical collections tradelines, the CFPB estimates that half of all consumers with medical collections tradelines will still have such tradelines on their reports.

Bite 9: CFPB Issues Fair Debt Collection Practices Act Report Focused on Medical Debt Collection

On November 16, 2023, the CFPB issued its annual FDCPA report. The report noted that servicemembers, older adults, and other consumers submitted 8,500 complaints related to medical debt collections in 2022 (15% of all debt collection complaints sent to collection agencies for review and response in 2022). The report noted that the most common type of complaint across all types of debts was that the debt collector was attempting to collect debt that the consumer does not owe. The report also outlined CFPB and state agency efforts to stop inaccurate medical collection and highlighted state efforts to combat deceptive medical debt collection practices as well as the authority of states to enforce the federal FDCPA and FCRA and the Consumer Financial Protection Act’s prohibition on unfair, deceptive, or abusive acts or practices. The report also included updates on the debt collection market more broadly, noting the rapid rise in consumer debt in 2022 and attributing it to, among other factors, higher inflation, interest rates, and consumer demand. Finally, the report summarized the CFPB’s debt collection supervisory, rulemaking, and enforcement activity, the FTC’s debt collection enforcement activity, including in connection with small business debt collection, and CFPB education and outreach initiatives, such as providing sample letters for use with debt collectors.

Bite 8: Supervisory Highlights Report finds Violations Across Array of Financial Products Including Servicing and Debt Collection

On July 26, 2023, the CFPB released its latest Supervisory Highlights, addressing concerns, particularly UDAAP concerns, across various financial services. The CFPB found, during examinations, that debt collectors continued collection attempts on work-related medical debts after receiving sufficient information that debts were uncollectible under state workers compensation laws, that auto finance servicers engaged in the practice of blanket cross-collateralization by accelerating and requiring payments from all consumers on unrelated debts, such as credit cards, before consumers could reclaim their repossessed vehicles, and that payday lenders engaged in certain unfair, deceptive, or abusive collection activity, such as having language in their credit agreements that prohibited consumers from revoking their consent to certain methods of communication and falsely threatening to garnish wages.

Bite 7: CFPB Addresses Collections on Discharged Student Loans

On March 16, 2023, the CFPB released a bulletin addressing unlawful collection of discharged student loans. The CFPB alleged that certain loan servicers illegally returned loans to collections after bankruptcy courts had discharged those loans. The CFPB directed those servicers to return the payments and to immediately stop unlawful collection tactics. Certain student loans are eligible for discharge in bankruptcy, including loans made to attend unaccredited schools, loans to students attending less than half-time, loans made in amounts in excess of the cost of attendance, and loans made to cover fees and living expenses incurred while studying for the bar exam or other professional exams. CFPB examiners claim that certain student loan servicers are failing to distinguish between these discharged loans and others, and as a result, are collecting discharged debt. The CFPB announced that it expects servicers to proactively identify discharged student loans, permanently cease collections, and refund consumers affected by unlawful collections in the past. The CFPB put student loan servicers on notice that it intends to examine their handling of discharged student loans.

Bite 6: CFPB Issues Advisory Opinion on Zombie Mortgages

On April 26, 2023, the CFPB issued an advisory opinion on what it calls “zombie” mortgages. These are mortgages for which the statute of limitations has expired, sometimes called “time-barred debt.” According to the CFPB, debt collectors were attempting to collect on second lien mortgages over a decade after the homeowners defaulted. In prepared remarks, Director Chopra stated that many of these “zombie mortgages” date back to the leadup to the 2008 financial crisis, when lenders offered 80/20 mortgages, which was a first lien loan for 80% of the value of the home and a second lien loan for the remaining 20% of the value of the home. Most lenders did not collect on those second mortgages, and instead sold them to debt buyers. The CFPB’s advisory opinion explains that a covered debt collector who brings, or threatens to bring, a foreclosure action to collect a time-barred mortgage debt violates the Fair Debt Collection Practices Act and Regulation F. Director Chopra said that the CFPB is looking for covered debt collectors who are breaking the law, and that the CFPB will be working closely with state agencies to pursue offenders. FDCPA actions can be brought by private plaintiffs, the CFPB, and state attorneys general.

Bite 5: 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 collectors from collecting on bills that consumers may not owe, and ensure that creditors are not relying on inaccurate data. The CFPB cited to a 2022 report indicating that approximately 20% of Americans have medical debt. The CFPB also noted research indicating that medical billing data is less predictive of future repayment than reporting on traditional credit obligations, and that inaccuracies in billing are common due to insurance disputes and medical 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 and public responses to recent hearings and inquiries as part of the rulemaking process.

Bite 4: The CFPB Takes Action to Halt Debt Collection Law Firm Activities

On January 11, 2023, the CFPB announced a settlement with a debt collection law firm that the CFPB claims bombarded consumers with “junk” lawsuits—lawsuits not supported by adequate documentation. The CFPB claims that fewer than a dozen attorneys filed more than 99,000 debt-collection lawsuits, many of which without supporting documentation. The CFPB further alleged that the law firm falsely represented that attorneys were meaningfully involved in preparing and filing the lawsuits, violating the FDCPA and CFPA. The proposed settlement prohibits the law firm from filing any new lawsuit against a consumer unless it has certain specified documents supporting the debt (including the name of the original creditor, evidence that the consumer authorized the debt, the chain of title supporting any sale, and an itemization of the debt) and certifies that the attorney whose name will appear on the complaint has reviewed those documents for consistency with the complaint. The order also requires the company to dismiss any pending lawsuit where it cannot satisfy these requirements. The order also required payment of a $100,000 penalty, deposited into the CFPB’s civil penalty fund. Director Chopra also warned that “[t]he CFPB will be scrutinizing large financial companies that enlist debt collection outfits operating lawsuit mills.”

Bite 3: CFPB Shuts Down Medical Debt Collector

On December 15, 2023, the CFPB announced an action against a medical debt collector, alleging that the collector illegally attempted to collect unverified medical debts after consumers disputed their validity. The CFPB claims the collector violated the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. The CFPB noted that the FDCPA requires debt collectors to stop collecting disputed debts without substantiating documentation. The CFPB also noted that the FCRA requires furnishers to conduct a reasonable investigation and notify consumer reporting agencies when a consumer disputes a debt. The CFPB alleged that the medical debt collector failed to follow these provisions of the FDCPA and FCRA. The CFPB permanently shut down the collector, and banned it from engaging in any collection activities, debt buying, debt selling, and consumer reporting. The collector must also instruct consumer reporting agencies to delete all collection accounts for all consumers and pay a $95,000 penalty to the CFPB’s civil penalty fund.

Bite 2: CFPB Orders Medical Debt Collector to Pay Redress and Penalties

On June 8, 2023, the CFPB ordered a medical debt collector to pay $1.675 million to the civil penalty fund as well as an unspecified amount in consumer redress for alleged debt collection and credit reporting violations. The CFPB claims that in thousands of cases, the debt collector continued to attempt to collect unsubstantiated debts after consumers disputed their validity, risking consumer harm (the CFPB claimed consumers may have been pressured or induced to pay debts they did not owe). The CFPB also accused the debt collector of sharing the disputed information with consumer reporting agencies, which, the Bureau claimed, “likely” resulted in inaccuracies on consumers’ credit reports. Under the order, the debt collector must pay the penalties, provide redress to consumers, cease unlawful activity, and cooperate with CFPB examinations for the duration of the order.

Bite 1: CFPB Orders Payment of More Than $24 Million Related to Debt Collection and Consumer Reporting

On March 23, 2023, the CFPB ordereda debt collector to pay more than $24 million for allegedly violating a 2015 CFPB order, divided evenly between consumer restitution and a civil penalty to be deposited into the CFPB’s victims relief fund. The CFPB claims the collector collected unsubstantiated debt, failed to provide required documentation and disclosures, sued or threatened to sue without the required documentation, and sued consumers after the statute of limitations had passed. In addition, the CFPB claimed the collector violated the Fair Credit Reporting Act by failing to inform consumers about investigation outcomes, failing to timely resolve disputes, and conducting unreasonable investigations. The 2015 order required the debt collector to pay more than $27 million in consumer refunds and penalties for allegedly unlawful debt collection activities. The CFPB’s new proposed order will require the debt collector to pay $12 million to consumers and an additional $12 million to the CFPB’s civil penalty fund, improve operations, and fix alleged failures to respond to consumers.

We predict 2024 will continue to be a year full of CFPB activity in medical debt collection. However, with household debt ballooning—thanks to the double whammy of inflation and higher interest rates—expect the Bureau to continue scrutinizing traditional credit collection, personal property repossessions, and foreclosures. And we won’t be surprised if the Bureau’s (and entire Executive Branch’s) scrutiny of “junk fees” seeps into debt collection oversight and enforcement.

Still hungry? Please join for our next CFPB Bites of the Month. Here is our lineup for 2024. If you missed any of our prior Bites, request a replay on our website.

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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

GENESEO, N.Y. — Coast Professional, Inc. (Coast) is pleased to announce the promotion of Lisa Reese to Senior Vice President of Compliance. With more than 26 years of experience in collections and a wealth of knowledge from a number of departments including Compliance, Operations, and Auditing, Ms. Reese began her career at Coast in 2018 as the Senior Director of Compliance. She later earned a promotion to Vice President of Compliance. Throughout her tenure at Coast, she has provided leadership and support to teams of legal, quality assurance, training, and Compliance employees while maintaining a track record of protecting consumer rights. 

In her new role as Senior Vice President of Compliance, Ms. Reese will continue to oversee the Compliance department, ensuring its functioning as an objective body that evaluates compliance issues and concerns within the organization. In addition, Ms. Reese will work with General Counsel and outside legal counsel in the review and implementation of statutory and regulatory requirements to ensure compliance and assist Coast departments in the analysis of contractual requirements impacting Coast departmental operations. Ms. Reese will oversee all ongoing activities related to the development, implementation, maintenance of, and adherence to the organization’s compliance program addressing federal and state laws generally, privacy, data security, consumer protection, and receivables management. 

“Ms. Reese embodies an unparalleled source of enthusiasm and leadership within the Compliance Department,” says Michael Del Valle, Coast’s General Counsel and Chief Compliance Officer. “Her talent for inspiring excellence in her team members, coupled with her unwavering commitment to ensuring regulatory compliance, makes her an invaluable asset to our company. Her elevated responsibilities in this new role will undoubtedly bolster the efforts of our Executive Leadership team in crafting strategic initiatives and guiding company planning. Congratulations, Lisa, on this well-deserved achievement” 

Ms. Reese is certified as a Credit and Compliance Collection Officer® (CCCO) by ACA International and a 2021 Bronze Stevie Award honoree in the “Female Executive of the Year- Business Products – 11 to 2,500 Employees” category. She was instrumental in Coast‘s selection as a Training APEX Award winner  (previously Training 100, formerly Training 125) by Training Magazine for five consecutive years (2020-2024), a worldwide ranking of organizations that excel at training and human capital development. Ms. Reese’s team was also influential in Coast being named a 2023 Better Business Bureau Torch Award recipient.

About Coast Professional, Inc.

Coast Professional, Inc. is a contact center and accounts receivable management company dedicated to respectful and ethical communication with consumers. Coast provides essential collection and business process outsourcing services to hundreds of campuses, universities, federal, state, and county governments, municipalities, and courts. Coast is an eight-time honoree on the Inc. 5000 list for America’s Fastest-Growing Private Companies provided by Inc. Magazine and in 2021, was distinguished for the sixth time as one of the “Best Places to Work In Collections” by insideARM.com and Best Companies Group. More about Coast can be found at www.coastprofessional.com.

On February 7, the U.S. Court of Appeals for the Third Circuit affirmed a lower court’s decision to grant a debt collector’s (the defendant) motion for judgment. The defendant argued that its efforts to collect plaintiff’s charged-off debt via a proof of claim in a bankruptcy proceeding was not limited by, or in violation of, the Pennsylvania Consumer Discount Company Act (CDCA). The plaintiff, who obtained a loan from a third-party small-dollar lender licensed under the CDCA, defaulted on the loan and the licensed lender subsequently charged off and sold plaintiff’s debt to a company that was not licensed under the CDCA. 

After filing for bankruptcy, the plaintiff sued the defendant and alleged a FDCPA violation when the defendant filed a proof of claim during the bankruptcy proceeding to collect the outstanding balance on the charged-off loan. The plaintiff’s argument was premised on claims that the defendant could not lawfully collect the debt because the CDCA dictates that a licensee may not sell CDCA-authorized contracts to an unlicensed person or entity. As such, the plaintiff argued the proof of claim violated the FDCPA’s prohibition against “false, deceptive, or misleading” representations in connection with the collection of a debt. The 3rd Circuit disagreed.   

Relying in part on a letter from the Pennsylvania Department of Banking and Securities confirming that the CDCA does not apply to an unlicensed entity that purchases or attempts to collect on charged-off consumer loan accounts of debtors in bankruptcy, the appellate court held that “[t]he CDCA is a loan statute, not a debt collection statute,” and that “entities in the business of purchasing and collecting charged-off consumer debt are not subject to the CDCA’s regulatory scheme.” The 3rd Circuit held that selling charged-off obligations is not the same as selling the defaulted loan contract. Rather, it is selling unsecured debt, which falls outside of the CDCA’s scope. The court concluded that the CDCA’s prohibitions were inapplicable and could not be the basis for the FDCPA violation.

On February 9, 2024, the California Department of Financial Protection and Innovation (DFPI) published a proposed rule to adopt new regulations under the Debt Collection Licensing Act (DCLA). Under the DCLA, a debt collector licensee is required to pay the DFPI Commissioner its “pro rata share of all costs and expenses incurred in the administration” of the DCLA, which is calculated in part based on the licensee’s “net proceeds generated by California debtor accounts,” but the term “net proceeds” was not defined in the statute. 

The proposed rule defines “net proceeds generated by California debtor accounts” to mean “the amount retained by a debt collector from its California debt collection activity.” The proposed rule also specifies the formulas used in calculating the net proceeds depending on the party, including a debt buyer, purchaser of debt that has not been charged off or in default, third-party collector, and first-party collector.

Additionally, the proposed rule requires licensees to file an annual report with the DFPI and specifies the information required in the annual report, including (i) the number of California debtor accounts collected on in the previous year; (ii) the number of California debtor accounts in the licensee’s portfolio as of December 31 of the preceding year; and (iii) the number and dollar amount of California debtor accounts for which collection was attempted, but not successfully collected or resolved during the previous year. Comments to the proposed rule must be submitted by March 27.

STERLING, Il. — Traci Oltmans and the VeriFacts team are at it again with the annual Spinathon fundraiser in support of their local Sterling-Rock Falls Family YMCA. Now in their fifth consecutive year of participating, the donations raised will support thousands of area children through financial support for swim lessons, gym memberships, camp attendance, and other summer childcare programs and activities. 

“Our local Y does an amazing job with our youth. The money raised goes towards the scholarship programs which help send kids to summer camp and participate in activities. I just love their entire staff,” shared Traci, Director of Business Development at VeriFacts. “They are so good with the kids in our community, and I want to do a great job for them. It means a lot to me. Every kid deserves a chance to be in activities and have additional outlets outside of their home. Team VeriFacts raised the most money the last two years and I’d like to keep the tradition going. We promise to pedal our hearts out!” 

Donate Today

The Spinathon event takes place on Saturday, February 24, 2024. To support this fundraiser for your Q1 company or personal giving, click here to make an online donation. Click “new donation,” select the 2024 Annual Support Campaign and select Team VeriFacts as the campaigners.

Sterling-Rock Falls Family YMCA

The Sterling-Rock Falls Family YMCA believes “that all kids deserve the opportunity to discover who they are and what they can achieve. That’s why, through the YMCA, children are taking a greater interest in learning; making smarter life choices; and cultivating the values, skills and relationships that lead to positive behaviors, the pursuit of education and goals.” 

As a nonprofit, the Y works to deliver positive change through its presence and partnerships. By connecting people of all ages and backgrounds to bridge the gaps in community needs, the Y mobilizes local communities through programs that build healthy spirit, mind and body for all. 

A Community-Oriented Company

VeriFacts is firmly rooted within its community and takes great responsibility and commitment to giving back. VeriFacts is proud to have a team that works hard and also plays hard. They love opportunities to donate their time, energy, and financial resources to both local and national charitable organizations. For more on VeriFacts’ community involvement, visit vfacts.com. 

About VeriFacts

VeriFacts, LLC is the top employment location and verification service for the receivables management industry. Having been in business for over 30 years, they are committed to offering guaranteed customer location and employment verification services to creditors across the nation. The VeriFacts brand has become synonymous with high-quality service and a positive customer experience. Over the years, their services have expanded into residential location information, data verification, and unique data aggregation. VeriFacts is proud to be a Certified Women-Owned Business by the WBENC.

The American Fintech Council (AFC), a trade group whose members include providers of earned wage access (EWA) products, has sent a letter to Director Chopra urging the CFPB to take steps towards development of a “pragmatic regulatory approach” for regulating EWA products. 

In its letter, AFC discusses the “patchwork approach” to regulating EWA products that is emerging at the state level.  While expressing its approval of the “bespoke regulatory framework for EWA” in Nevada and Missouri, AFC states that it “disagrees with the approach of shoehorning EWA products into existing lending laws, pursued by other states.”  (The California Department of Financial Protection and Innovation (DFPI) has issued a proposal that would require providers of income-based advances such as EWA products to register with or obtain a license from the DFPI and comply with the fee and interest rate limits of the California Financing Law (CFL)).  AFC indicates that regardless of the approach taken by states, “pragmatic federal engagement on this matter is necessary.”

AFC observes that the CFPB has to date “opted to pursue less comprehensive or binding guidance with regards to EWA,” citing to the CFPB’s November 2020 Advisory Opinion (AO), and that it initially agreed with this approach “as it allowed the industry to develop responsible options that fit the demands of consumers, without significant limitations to their business models.”  AFC states that it now believes a “more substantive regulatory endeavor, such as a formal rulemaking” is necessary in light of market and state developments since the CFPB issued the AO.  While expressing its preference for notice and comment rulemaking by the CFPB, AFC states that it “remains open to understanding and supporting the regulatory tool that will ultimately serve consumers and responsible industry participants best.”  AFC asks the CFPB “to convene a meeting with relevant stakeholders” to facilitate a discussion regarding regulatory approach.

In the November 2020 AO, the CFPB addressed whether an EWA program with the characteristics set forth in the AO was covered by Regulation Z.  Such characteristics included the absence of any requirement by the provider for an employee to pay any charges or fees in connection with the transactions associated with the EWA program and no assessment by the provider of the credit risk of individual employees.  The AO set forth the Bureau’s legal analysis on which it based its conclusion that the EWA program did not involve the offering or extension of “credit” within the scope of Regulation Z.  In the AO, the Bureau indicated that there may be EWA programs with nominal processing fees that nonetheless do not involve the offering or extension of “credit” under Regulation Z and advised that providers of such programs could request clarification about a specific fee structure by applying for an approval under the Compliance Assistance Sandbox Policy.  (The CFPB announced in September 2022 that it was rescinding the Compliance Assistance Sandbox Policy.)

In January 2022, then CFPB Acting General Counsel (and now General Counsel) Seth Frotman indicated that due to “repeated reports of confusion” caused by the AO, he planned to recommend to Director Chopra “that the CFPB consider how to provide greater clarity on these types of issues.”  While acknowledging that the AO had left open the possibility that an EWA product with nominal processing fees might not be “credit” under Regulation Z, Mr. Frotman suggested that possibility was remote.  More specifically, he noted that the CFPB had expressly limited the AO’s application to EWA programs meeting all of the characteristics set forth in the AO and stated that “products that include the payment of any fee, voluntary or not, are excluded from the scope of the advisory opinion and may well be TILA credit.”  Mr. Frotman also noted that the AO does not speak to whether EWA products would be “credit” under federal laws other than the TILA, such as the CFPA or the ECOA, or under state law.  Mr. Frotman’s comments were made in a letter responding to a letter sent to him by consumer advocacy groups regarding proposed New Jersey legislation on EWA products. 

In December 2023, the CFPB sent a letter to the DFPI commenting on the DFPI’s EWA proposal which would clarify that income-based advances are “loans” under the CFL.  The CFPB noted that the DFPI’s proposed treatment of income-based advances as “loans” is similar to how “credit” and “finance charges” are treated under the Truth in Lending Act and Regulation Z.  The CFPB indicated that it plans to issue further guidance “to provide greater clarity concerning the application of the Truth in Lending Act in this market,” that products “that do not fit within [the very narrow scope of the CFPB’s previous advisory opinion] are not excluded from existing laws,” and that it supports efforts to subject income-based advance products “to rigorous oversight for the full scope of existing state and federal consumer protection and lending laws.”