The CFPB appears well poised to rebuff a challenge to its funding structure after the Supreme Court held oral argument on the issue on October 3.  I attended the oral argument and summarized some of my observations, thoughts, and predictions here.  

At issue in the case is the manner in which the CFPB is funded.  The agency is organized under the Federal Reserve System and is not subject to Congress’s annual appropriations process.  Instead, the director requests operating funds from the Federal Reserve each year up to a statutory cap of 12% of the Fed’s overall budget.  The Federal Reserve System, in turn, is funded mainly through assessments on financial firms and certain interest income on investments; it too is not subject to regular Congressional appropriations.  

Trade associations led by the Consumer Financial Services Association (CFSA) challenged the Bureau’s payday lending rule by arguing, among other things, that the CFPB’s unique funding structure violates the constitutional provision requiring Congress to appropriate funds for executive agencies.  As the litigation moved through the federal courts, the Fifth Circuit accepted CFSA’s argument and castigated Congress for “abandoning” its responsibility under the appropriations clause by creating a funding framework that is “double-insulated” from Congress.  CFSA v. CFPB, 51 F.4th 616, 639 (5th Cir. 2022).  The Fifth Circuit went further, concluding that the constitutional defect demanded vacatur of the payday rule.  The Supreme Court granted the CFPB’s request for review.

After oral argument, the high court seems likely to reverse the Fifth Circuit’s decision on the appropriations clause issue, and I doubt it will be close.  Justices Barrett, Thomas, and Kavanaugh all seemed skeptical of CFSA’s position.  Chief Justice Roberts asked probing questions of the solicitor general, but I would not be surprised if he ultimately sided with the CFPB.  Justice Gorsuch, sitting next to Barrett, seemed to align with her.  He has a history of cynicism toward the administrative state generally, but he seemed to appreciate the novelty of the appropriations clause challenge and I would not pigeon-hole him here.  Justice Alito was the most critical of CFPB’s position but even he appeared nonplussed at times with CFSA’s arguments. 

Bottom line: I see the CFPB winning this case easily.  In the immediate aftermath of the argument, I suggested the vote could be 9-0 but more likely 8-1 or 7-2.  After a few days of reflection, I stand by that prediction.  I add, however, another prediction—that we’ll see some number of concurring opinions among the majority.  This is a novel area; no court has ever struck down an act of Congress on the theory that it violates the appropriations clause, and there are few cases even to consider it.  The justices were plainly intrigued by the concept and at argument explored through hypotheticals how such a challenge could succeed in the future.  I expect several justices will attempt to articulate some standard for analyzing appropriations clauses challenges, even though most if not all of them will view the CFSA funding structure as safely within constitutional limits.  

My vote tally prediction flows from my assessment of the justices’ questions, comments, and demeanor at argument.  Beyond that, it was telling that the issue of remedy was barely touched upon.  I suspect that was because the entire room understood that the CFPB will be winning on the appropriations clause issue and any talk of remedy is moot.  It was Justice Sotomayor who raised the remedy issue, once to each advocate.  She will certainly side with the CFPB here.  Her raising the remedy issue was less an attempt to earnestly determine what the Court should do after striking the down the funding scheme, and obviously more an effort to demonstrate that ruling for the CFPB on the merits carries an important fringe benefit for the Court—the ability to side-step the weighty task of determining whether to strike down as unconstitutionally tainted not just the payday rule but everything the CFPB has done since it opened its doors in 2011.  

The solicitor general argued that the retroactive remedy employed by the Fifth Circuit “would be profoundly disruptive” and pointed to the Mortgage Bankers Association amicus brief for support (it warned that nationalizing the Fifth Circuit’s rationale would trigger chaos in the mortgage markets).  She also noted that a prospective remedy alone would halt enforcement of the payday rule, amounting to a “meaningful form of relief” for CFSA.  Counsel for CFSA distanced the trade association from the Fifth Circuit’s decision on remedy.  He said the circuit court’s rationale did not “stand[] on its own terms” because a win for CFSA on the appropriations clause will require going back to Congress for “a valid appropriation,” which in turn, he argued, will provide Congress an opportunity to “ratify” prior Bureau actions.  The discussion on remedy never went far and, again, I view that as a harbinger for a CFPB victory on the appropriations clause issue. 

Throughout the argument, the solicitor general was very persuasive and knowledgeable on Congress’s historical practice going back to the founding of the country (something this Court emphasizes at every opportunity when it comes to constitutional interpretation).  On rebuttal in particular she was very effective.  She made numerous references to the funding arrangement for early executive agencies, especially the Customs Service, which received a standing appropriation without a cap.  She also liberally invoked the constitutional provision limiting Congress’s ability to fund the Army beyond two years.  That provision demonstrates that the founders had no durational concerns with other (non-Army) appropriations, she argued.  

Counsel for CFSA landed a few rhetorical points but struggled to articulate a governing principle that results in vitiating the CFPB’s funding framework without affecting other agencies like the FDIC and the Federal Reserve.  The SG called this CFSA’s attempt to “gerrymander a rule” in their favor.  CFSA’s counsel held to the position that to be a constitutionally valid appropriation, Congress must specify the amount of the appropriation.  On rebuttal, the SG noted that the government counted 400 instances this year alone where Congress declined to specify a spending amount but instead set a cap (as it did with the CFPB).  CFSA also argued that by arranging to fund the CFPB “in perpetuity” Congress wrongly gave up its authority to serve as “a continuing check on executive power.”  Justice Kavanaugh’s questioning on this issue made clear that Congress could change the CFPB funding mechanism any time, and CFSA conceded as much.  At that point, none of the justices seemed concerned with the “perpetual” nature of the funding.  Counsel for CFSA was left to lean solely on the notion that Congress must specify an appropriation amount—a limp argument in light of the historical record. 

The discussion at times centered on a hypothetical situation (discussed initially in the briefs) in which Congress grants the president power to spend one quadrillion dollars however he sees fit—the implication being that at some point Congress could be seen as unconstitutionally transferring the power of the purse to another branch.  There was a sense among all justices that we are a long, long way from that.  The CFPB is among the smallest executive agencies, its funding (about $700M per year) is still subject to a cap, and Congress can change it at any time.  Justice Kagan may have previewed the prevailing opinion when she noted that history reveals “enormous variation” in how Congress makes appropriations, implying that the uniqueness of any one approach does not render it unconstitutional.  Whether and how Congress could ever run afoul of any constitutional restraints on its appropriations power will remain the quadrillion dollar question.  But in this case at least, it seems the CFPB has avoided another existential threat.  

On September 19, the CFPB published a recent decision and order denying the petition of one of the nation’s largest private student loan servicers to set aside the CFPB’s civil investigative demand (CID) in connection with its investigation into potential violations of the CFPA’s prohibition of unfair, deceptive, and abusive acts and practices for attempting to collect on loans that had been previously discharged in bankruptcy. The order instructs the servicer to “comply in full” with the requests for documents and information set forth in the Bureau’s June 2023 CID.

The servicer objected to the CFPB’s investigation, arguing, among other things, that the Bureau lacks authority to enforce the U.S. Bankruptcy Code.  The servicer also argued that the Bankruptcy Code displaces the CFPA if the reason a debt is not owed is due to a bankruptcy discharge.

The Bureau rejected the servicer’s arguments, stating “[t]he Bureau seeks to determine whether a student loan servicer violated the prohibition on unfair, deceptive, and abusive acts and practices not just by making individual attempts to collect discharged debts from individual debtors, but also, more globally, by having no policies and procedures in place to determine whether loans in the servicer’s portfolio are dischargeable in bankruptcy via standard bankruptcy orders, a practice that could put entire populations of borrowers at risk of harmful and unlawful collection efforts.”  It went on to say “[t]he bureau does not seek to investigate potential violations of the Bankruptcy Code, but rather potential violations of the CFPA.”  The CFPB also noted that courts have “repeatedly held that the Bureau can bring CFPA claims based on companies’ attempts to collect debts that consumers do not owe due to the impact of some other statute.”

Last week, a group of consumer advocate organizations filed a Petition for Rulemaking with the CFPB that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen. We published a blog last Friday in which we enumerated the many flaws in the Petition and urged the CFPB to reject it.

After we published our blog, Evan Weinberger of Bloomberg received the following response from the CFPB in response to Evan’s request for comments on the filing of the Petition:

“Americans are overwhelmed by increasingly lengthy, complex, and one-sided fine print in form contracts. The CFPB is focused on companies that use fine print to extract extra money, lock people into unwanted business relationships, gain advantages they could not obtain in fair and competitive markets, or circumvent the rule of law. For example, in January the CFPB proposed to create a public registry of nonbank financial companies that purport to limit consumer rights or protections in form contracts, including arbitration clauses.

We welcome participation in our rulemaking petition program, on the part of the consumer groups who filed this petition or any other members of the public. We are carefully considering the proposal relating to arbitration clauses, and will be opening a public docket and taking comment from the public on the proposal.”

This is an alarming and rapid reaction by the CFPB. We would have expected a much shorter reaction to the filing of the Petition, something like “We will take the filing of the Petition into consideration and respond to you in due course.” Instead, it almost looks like the CFPB invited these consumer advocacy groups to submit the Petition. At a minimum, it certainly appears as if the groups have been discussing this with the CFPB for some period of time

At this point, we don’t know when the Petition will be published in the Federal Register or what the deadline for submitting comments to the CFPB will be.

While simply re-publishing the Petition will not create a lot of work for the CFPB, it will create a large volume of work for their staff to read and analyze the comments and then decide whether to launch a rulemaking. It seems to us that before publishing an Advance Notice of Proposed Rulemaking or Proposed Regulation, the CFPB would need to do a new study since the prior study (which took three years from launch date until publication) concluded that pre-dispute arbitration provisions are fair to consumers. While we believe that the Petition is precluded by the Congressional Review Act, if the CFPB were to rely on the results of the prior study, it would come close to conceding that the Petition is substantially the same as the former arbitration regulation promulgated by the CFPB and then overruled by Congress under the Congressional Review Act.

As we also pointed out in our earlier blog about the Petition, it seems irresponsible for the CFPB to devote significant resources to this Petition until the Supreme Court issues its opinion in the CFSA case and reverses the Fifth Circuit opinion. There are storm clouds hanging over the Bureau and this is NOT the time for it to launch a new rulemaking (particularly a major one involving arbitration) which is likely to be very contentious and controversial as this one will be.

On September 7, the U.S. District Court for the Eastern District of Michigan granted summary judgment in the defendant’s favor finding that the plaintiff had not suffered a concrete injury and therefore lacked standing to assert a claim under the Fair Debt Collections Practices Act (FDCPA).

In Morgan v. LVNV Funding, LLC, the plaintiff failed to make the required payments due on his credit card account. The plaintiff’s account was later transferred to the defendant. After receiving a dispute letter from the plaintiff, the defendant’s servicer reported the account as “disputed.” Thereafter, counsel for the plaintiff sent a letter stating that the plaintiff no longer disputes the information reflected on his credit report and requesting that “the dispute comment” be removed. The servicer investigated the dispute and “followed the requirement in 15 U.S.C. § 1692e(8) by keeping the ‘disputed’ notation.” The plaintiff filed suit alleging that the defendant’s failure to remove the dispute comment, despite being requested to do so, violated the FDCPA.

The parties filed cross motions for summary judgment. In granting the defendant’s motion, the court found that the plaintiff’s statements as to his damages were nothing more than bare assertions of emotional distress. The court cited as an example the plaintiff’s deposition testimony where he stated, “I believe the damages are monetary damages. . . . The stress. The anxiety. It’s a lot.” The court ultimately found that the plaintiff had not provided sufficient evidence at the summary judgment stage that his anxiety and stress were concrete injuries establishing standing. Moreover, the court found that the plaintiff failed to show that any of his alleged harms were directly attributable to the defendant’s conduct rather than to his “general financial woes.”

The court also dismissed the plaintiff’s assertion that the procedural violation at issue was closely analogous to the harms traditionally associated with libel and slander claims. The court found that the plaintiff failed to show that the defendant’s failure to remove the “disputed” remark from his account would have any effect on his reputation. In fact, the court found that the opposite would be true. “If anything, it seems like removing the dispute comment — and thereby implicitly acknowledging the unpaid debt — would cause reputational harm, rather than alleviate it.”

Because the FDCPA claim was the only federal claim in the litigation, the court declined to exercise supplemental jurisdiction over the remaining state law claims.

A recent decision from the New Jersey Appellate Division comes as welcome relief for purchasers of defaulted debt. The decision, Woo-Padva v. Midland Funding LLC, concerns the New Jersey Consumer Finance Licensing Act (CFLA), and whether a debt buyer who failed to have such a license could be liable under the state’s consumer protection law.

After she defaulted on two credit-card accounts with the original creditors, the plaintiff’s accounts were charged-off and sold to a third-party debt purchaser who then placed the accounts with a law firm debt collector for servicing. Thereafter the plaintiff paid one of the debts in full to the debt collector and no other entity sought to collect that account. On the other account the law firm sued the plaintiff and the parties entered into a consent judgment pursuant to which the plaintiff made payments on the account.

Over three and a half years later, the plaintiff filed suit against the debt buyer as it was not licensed under the CFLA and sought a declaratory judgment that her consent judgment was “void.” The plaintiff also sought damages under the New Jersey Consumer Fraud Act (NJCFA) again based on collecting the accounts without having the CFLA license. The plaintiff also had a count for unjust enrichment based on collecting the accounts without the CFLA license.  The plaintiff’s complaint was filed on behalf of a putative class and sought damages, including disgorgement of all funds collected from proposed class members.

Regarding the account that had the consent judgment, the trial court previously found that res judicata and the entire controversy doctrine barred the plaintiff’s claims. However, since the other account was settled without a judgment, neither res judicata nor the entire controversy doctrine applied.

The trial court granted summary judgment to the debt purchaser on all of the plaintiff’s claims, finding that the debt buyer was not a consumer lender and thus did not require the CFLA license. The trial court also held that the plaintiff’s claims were not covered by the NJCFA because the purchaser did not offer to sell the plaintiff any services or merchandise and because she had not suffered the requisite “ascertainable loss.”

The Appellate Division affirmed the CFLA dismissal but for reasons other than those found by the trial court. As the Appellate Division saw it, the CFLA does not provide for a private right of action, and the plaintiff cannot use the Uniform Declaratory Judgments Act to circumvent that lack of a private right of action. Instead, violations of the CFLA are enforceable only by the Commissioner of Banking and Insurance.

Regarding the NJCFA, the Appellate Division agreed with the trial court that the statute did not apply to the debt purchaser. To state a claim under the NJCFA, the offending conduct must be “in connection with the sale or advertisement of merchandise and real estate.”  The New Jersey Supreme Court has also held that the NJCFA applies to “the provision of credit.”  Ultimately, the offending misrepresentation must be material to the transaction and “made to induce the buyer to make the purchase.”  There was no allegation that the debt purchaser sold credit or offered anything to the plaintiff. Instead, the offending conduct was misrepresenting “that it had the legal right to collect on the account when it lacked the proper license to do so.”  However, since this conduct was not made in connection with the origination of the debt, it could not constitute a violation of the NJCFA.

In addition, the Appellate Division found that the plaintiff did not sustain an ascertainable loss, another prerequisite to recovery under the NJCFA. Here, the plaintiff acknowledged that she owed the debt to the original creditor, and her payment of that valid debt to the debt purchaser did not constitute an ascertainable loss.

ROCHESTER, N.Y. — Continental Service Group, LLC, d/b/a ConServe, in conjunction with the company’s “Matching Gift Program”, donated its August ConServe Cares proceeds to the Veterans Outreach Center (VOC).  The ConServe team supports and funds the efforts of numerous local non-profit agencies that strive to make a difference.  As a result of the employees’ compassion and generosity. countless lives have been touched and enriched in our community.

“Through this gift from ConServe Cares, the VOC will be able to provide food, clothing and shelter to the men and women who have fought for the freedom we enjoy each and every day,” stated VOC Director of Advancement, Joan Brandenburg. “When we support our veterans, we are telling them that they are recognized as the heroes that they are”. 

George Huyler, Vice President of Human Resources, said, “At ConServe it is a fundamental part of our mission statement to give back to our communities.  Our commitment to supporting veterans and their families goes beyond just words. We take pride in providing support to those who have served our country. We believe it’s our responsibility to give back to these heroes and we are committed to doing our part.”

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 us online at: www.conserve-arm.com  

About the Veterans Outreach Center

At Veterans Outreach Center, 2023 marks our 50th year in operation. In 1973, VOC was initially founded as “Veterans Outreach Project” under the non-profit Action for a Better Community with funding from Congress. When the government ended that program, our local Vietnam veterans knew that these life-saving services had to be maintained. In 1979, “Veterans Outreach Project” turned into Veterans Outreach Center- an independent, 501c3 organization whose sole mission was to help veterans in need. Despite funding challenges off and on over the last half century, we’ve not only remained in operation but also significantly expanded our footprint to now serve over 1,500 men and women each year. At Veterans Outreach Center, our mission is to serve veterans with compassion and advocate for all who have worn our nation’s uniform so they can live life to the fullest. Visit them online:  https://veteransoutreachcenter.org/

A California Dermatologist recently filed a class action lawsuit against the three major credit reporting agencies (CRAs), alleging the CRAs’ decision to stop reporting medical debt below $500.00 has caused him and other medical professionals nationwide irreparable financial harm. Further, he claims that removing medical debt below $500.00 from credit reports will diminish access to medical care by driving providers out of certain markets.  

Background 

In March 2022, the three major CRAs announced they would be changing how medical debt is included in credit reports. As part of these changes in April 2023, the CRAs stopped including medical debt of less than $500.00 on credit reports. On July 11, 2023, in prepared remarks to kick off the CFPB’s hearing on Medical debt, CFPB Director Chopra appeared to take credit for these changes, stating, “The CFPB’s work has led to major changes in the way medical bills are reported to the three credit reporting conglomerates: Equifax, Experian, and TransUnion. Consumer credit reports should not be used as a tool to coerce patients into paying bills that they already paid or may not even owe.” 

The Lawsuit and the Harm Claimed 

On August 22, 2023, California Dermatologist Derrick Adams filed a class action lawsuit against the three CRAs, alleging that they conspired with one another and violated anti-trust laws by deciding together to stop credit reporting medical debt below $500.00. Dr. Adams claims that this change has caused him financial harm and will cause similar financial harm to doctors, optometrists, dentists, chiropractors, and other medical professionals across the country. Further, he claims that removing medical debt below $500.00 from credit reports will diminish access to medical care by driving providers out of certain markets. 

To illustrate his current and future damages, Dr. Adams states that the majority of bills he sends to patients are below $500.00. When patients do not pay their bills, he uses third-party accounts receivable services (i.e., collection agencies) to attempt to collect the unpaid balances. In Dr. Adams’ experience, the threat that an unpaid bill could end up on a credit report incentivized patients to pay their bills. Now, however, credit reporting is “rendered pointless,” since the CRAs have agreed not to include debt in these amounts in credit reports. Since he has no other feasible means of reporting unpaid bills less than $500.00, fewer of his bills will be paid, causing significant financial harm.  

The financial damage is not limited to Dr. Adams or his practice. Using figures published by the CFPB, he claims that this will affect the repayment of tens of millions of dollars of medical bills nationwide. By deciding to stop reporting medical bills below $500.00, Dr. Adams claims that the CRAs have eliminated a valuable tool that medical providers use through their third-party agencies to incentivize patients to pay their bills. Consequently, medical providers will have to resort to more costly methods, such as employing more staff and third-party companies, adding to the financial harm and causing others to leave the market. 

You can read the full lawsuit here.  

insideARM Perspective 

It’s important to look at the full picture here and recognize that the CFPB seemed to publicly take credit for this change. Though the CFPB has spent considerable time and effort touting its opinion regarding how these changes to credit reporting will help consumers, it does not seem there has been much research into how changes to medical debt credit reporting will affect those on the other side of the equation- small physician practices, like the one run by Dr. Adams. 

Small doctor’s offices are crucial to our healthcare system. Industry associations have made the points raised in Dr. Adams’s suit repeatedly, but those cautionary words yielded little to no results. It’s unfortunate that Dr. Adams and other doctors across the country may have been harmed by removing medical debt below $500.00 from credit reports, but perhaps this lawsuit will cause the CFPB to pay attention to some of the real-world consequences of its initiatives. This is especially important in light of the CFPB’s new proposed rulemaking, which makes it clear that it wants all medical debt removed from credit reports. Though the outline of the proposed rulemaking covers more than medical debt, the actual title of the press release was “CFPB Kicks Off Rulemaking to Remove Medical Bills from Credit Reports.”  

The ARM industry and the medical community should continue to be vocal with the CFPB and remind them that harm to consumers is not just limited to financial issues. Harm and collateral damage from unintended consequences can occur on many fronts- including reduced access to healthcare. Hopefully the CFPB will pay attention to warning bells sounded by Dr. Adams in this suit.

Third-party debt collectors and collection agencies have a tough balancing act to perform. They need to optimize their outbound communications and right-party contacts (RPCs) but must do so within the confines of strict regulations. Effectively reaching debtors can be difficult when facing a sea of internal and external pressures. You don’t want to expend too many resources on a wrong number, but you don’t want to give up on a good number too soon. With dedicated RPC tools, you can streamline your processes, transforming a difficult task into a manageable one. 

Phone Number ID™ by Experian helps increase RPC rates and optimize skip tracing by scoring customer phone numbers at the beginning of the debt cycle. This tool works within the confines of the Fair Debt Collection Practices Act (FDCPA) and Telephone Consumer Protection Act (TCPA), providing you with a quality scrub that’s easy to use. 

Collection agencies and debt collectors face unique challenges 

Collection agencies and debt collectors face a number of challenges unique to their industry. 

First, there are strict rules in place protecting consumers by restricting outbound communications. And violations can be costly. Every unsolicited call or text sent to a wireless device can lead to a fine ranging from $500 to $1,500, putting a lot of stress on debt collectors. 

However, the stress facing debt collectors goes beyond compliance. There’s extreme pressure to improve your RPC rates as quickly and efficiently as possible. Time is money and wasting it by calling a bad phone number can cost precious resources. But it can also be costly to move away from a phone number too fast because your resources erroneously indicated that it might not be a reliable contact. 

That’s where Phone Number ID can help. Improving contact management processes at the beginning of a debt cycle can help you maintain compliance while increasing your RPC rates even if your resources are constrained. 

How Phone Number ID works to improve RPC 

Phone Number ID is an industry-leading solution that helps you maximize the effectiveness of your contact management strategy while minimizing the risk of fines. Phone Number ID validates phone ownership and phone types with more than 5,000 local exchange carriers in real-time, checking categories such as: 

• Phone number ownership. 
• Line type (wireless, landline, etc.). 
• Carrier. 
• Activation date. 
• If the number moved from a landline to a wireless carrier or voice-over IP. 

Phone Number ID takes your call list and sends it to carriers for verification (while protecting consumer information). If a number doesn’t have a name linked to it, the number is sent to Experian contact databases to be located. Complete customer profiles are then returned to you from the carriers, including consumer name, line type, current carrier and activation date. 

Your records are transparent and include match scores from 0 to 99 based on the quality of the customer’s phone number. The match score represents how well a consumer record matches carrier data, helping you maximize RPC. 

A thoughtful start to your debt cycle leads to cost savings 

Phone Number ID increases efficiency by allowing you to be more thoughtful at the beginning of a debt cycle. Rather than arbitrarily calling each number in your database a specific number of times, you can fine-tune your outreach based on accurate scrubbing data. 

At the beginning of a debt cycle, run your phone numbers through Phone Number ID. If it assigns a match score of 20 or lower to a number, you’ll know that number is very risky and should be skip-traced. A score that low indicates an active mismatch, such as a typo, a fake number given to collections or a prepaid phone number that now belongs to someone else. 

In contrast, a match score of 90 or higher means you have the best phone number for that person, and there is no point in skip tracing. 

This means, that for each debt cycle, instead of assigning an arbitrary number of phone calls to every number, you can do the following: 

• Call a number 10 to 20 times if it has a match score of 90 or higher. 
• Call a number with a match score of 20 to 40 once and move to skip tracing. 
• Send a match score lower than 20 straight to skip tracing. 

Phone Number ID maximizes your calls in numerous scenarios 

Phone Number ID can maximize debt collectors’ effectiveness in numerous scenarios. Here are just three examples of use cases you might encounter, but there are many more possibilities. 

• If you’re a debt buyer, you might receive a list of phone numbers that were charged off and haven’t made payments in four to six months or longer. Because it’s been so long since they were used, the numbers could be high risk. You’ll want to scrub all of them for quality before you call any of them. 
• You have a new number that belongs to someone who signed up for a credit card years ago, and just recently started missing payments. It’s been a long time since the number was verified, so scrubbing it right away makes sense. 
• You’ve been given access to a database that tells you whether or not a number was ported. You might be tempted to dispose of all the ported numbers, but you could miss out on valuable contacts. Phone Number ID will tell you if a number was ported and if it’s still owned by the same person. 

Follow up your match scores with optimal skip tracing 

When Phone Number ID delivers low-match scores for some of your contacts, you’ll want to skip-trace the numbers to see if there’s a new number you can use instead. Luckily, we have a solution. 

TrueTrace™ is Experian’s most powerful skip tracing product, and it’s the natural follow-up to Phone Number ID. TrueTrace offers superior matching logic that ensures accurate data that’s streamlined to integrate with internal or third-party software. 

Why partner with Experian? 

Phone Number ID allows you to feel confident about your database, knowing that you’re reaching out to the right people and staying updated on any contact information changes as they occur. 

The benefits of leveraging our best-in-class solution include: 

• Providing seamless contact management integration and affordability. 
• Delivering detailed consumer contact information verification in real-time. 
• Monitoring customer phone numbers’ line type, ownership, portability and carrier. 
• Validating phone ownership and type across 5,000+ exchange carriers. 
• Delivering comprehensive coverage with up to a 97 percent hit rate. 
• Utilizing proprietary matching and scoring logic. 
• Mitigating compliance risk with the TCPA, while enhancing RPC rates and skip tracing. 

Experian is committed to helping you optimize your outbound communications. 

Contact us today to learn how Phone Number ID can help you. 

NEW YORK, NY — Skit.ai,
the leading provider of conversational Voice AI solutions, announced today its
new partnership with Pro Com Services of Illinois, Inc., a century-old
financial services company offering first and third-party debt recovery
services. After deploying Skit.ai’s solution in less than 24 hours, Pro Com
Services saw its account penetration skyrocket with an additional 20,000
outbound calls performed by the solution every day.

The
adoption of Skit.ai’s cutting-edge conversational AI technology marks a pivotal
step in the digital transformation process of a collection agency approaching
its 100th anniversary in the coming year. Headquartered in Springfield,
Illinois, Pro Com Services works with major healthcare organizations.

Skit.ai’s
Automated Voice Intelligence platform is rapidly transforming the recovery
strategy of Pro Com Services, which is now able to scale its business by
acquiring and servicing a significantly higher number of accounts for its
clients. In its search for a software solution, Pro Com Services was seeking a
proven and compliant software solution to automate high volumes of outbound
calls to consumers and increase the number of inbound calls from consumers
looking to resolve their debt. The solution’s ability to negotiate with
consumers persuaded the agency to adopt the Skit.ai platform. 

“We
were eager to find a new AI solution to automate some of our processes, grow
our business, and offer consumers the possibility to solve their debt on their
own without the need to speak with an agent. When I learned about Skit.ai, I
was positively impressed with their track record of working with companies of
all sizes, including small-to-medium businesses,” stated Ryan Matrisch, Director of Business Development at Pro Com Services of
Illinois. “Skit.ai’s platform is very consistent; it never has a bad day.” 

While
the agency previously adopted an IVR solution for inbound calls, its leadership
was well aware of the technology’s limitations; as opposed to IVR systems,
Voice AI can handle a natural-sounding, back-and-forth conversation, delivering
a superior customer experience. 

“Skit.ai
implemented its Voice AI solution at Pro Com Services in under 24 hours,
delivering immediate and promising results, notably achieving a 47.91%
engagement rate during connected calls with consumers. Many collection agencies
have been benefitting from our solution, which can establish right-party
contact, collect promise to pay, collect payments, and negotiate payment plans
without any human intervention, all while remaining fully compliant with
regulations,” said Sourabh Gupta,
Founder and CEO of Skit.ai. 

Skit.ai
has had remarkable success in the account receivables industry across the U.S.,
with dozens of organizations already using its technology to streamline and
automate their recovery strategy. 

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

About Pro Com Services of Illinois: 

Pro Com Services of Illinois, Inc. is a full-service
accounts receivable management company founded in 1924. Family-owned and
operated, Pro Com Services is one of the most experienced and respected
collection agencies in Illinois, offering pre-collection services, bad debt
recovery, third-party collections, and collection litigation. The agency prides
itself in adhering to the highest level of ethical standards and ensuring its
staff goes through continuous training to maintain the highest level of industry
certifications. Visit https://www.pro-comservices.com/

About Skit.ai:

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

If your business and collection partners aren’t utilizing email in your debt recovery strategy, you’re leaving vital engagement opportunities (and potential collections) on the table. There are plenty of reasons why digital communications are the way to go, but reaching out through email is especially important in collections.

Surveys show that 59.5% of consumers prefer email as their first choice for communication, and 14% of bill-payers prioritize payments that offer lower-friction payment experiences, which increases to 23% for millennials specifically. Considering this, it shouldn’t come as a surprise that courts have actually ruled that “an email is less intrusive than a phone call” for debt collection.

But what makes a successful email program when it comes to connecting with delinquent accounts? Whether your business is handling collections in-house or are looking at working with a third party, your operations should be confident that you have these core components covered.

Core Components for a Successful Email Program

While adding email into the communication channel mix is critical, it is the set up, execution, and continued optimization of that email program that can actually make a difference when it comes to consumer engagement. There are many elements to a successful email strategy, but here are three of the core components that we’ll focus on:

Infrastructure, Data, and Content

All 3 are required for a successful email program—each one relies on the other two to create a high performing program.

Let’s take a look at why each of these is important and the risks that can occur without each component in place.

Infrastructure

The infrastructure an email program is built on has many components itself: Mail Servers, Mailbox Providers, Internet Service Providers (ISPs), Email service providers (ESPs), and more. How these components are set up and work together influences sender reputation, which in turn influences email delivery rates. You can learn more about these different pieces in our blog focusing on the The (Hidden) Anatomy of Email.

While infrastructure can admittedly be complex, the risks your operation runs without a sound infrastructure are clear and quite consequential, including having your emails blocked, deferred or delayed delivery, or winding up lost in the recipient’s spam folder.

Data

In today’s digital world, data is everywhere—but how you harness that data can make or break your email program (and even get you into hot water if you or your collections partner are not following all the necessary compliance regulations around data privacy and protection). Understanding data helps intelligently influence an email program, especially when focusing on email engagement metrics such as:

• Opens
• Clicks
• Unsubscribes
• Spam complaints
• Hard Bounces
• Spam traps

But without quality data analyzed appropriately, your emails could result in consumer complaints, hard bounces, falling into spam traps, not to mention negatively impacting all the engagement metrics listed above.

Content

Solid infrastructure and reliable data are essential in any email program, but when it comes to debt collection, content can be the tipping point between a consumer committing to repayment or ignoring the outreach altogether—or even reporting your communications as spam or harassment.

From subject lines to your call-to-action (CTAs), sending the right message to your customers is crucial. Without compelling content you miss opportunities to capture consumers attention resulting in fewer opens, fewer clicks, or even pushing consumer perception in the wrong direction. If you lose your customers’ trust, you’re most likely going to lose the chance to recover their debt.

Successful Email Engagement Can Boost Debt Recovery

Studies have shown that engaging consumers through digital methods can increase resolution rates by as much as 25%. But if your digital efforts are missing any of the core components we just covered above, it doesn’t matter if your collection strategy includes email—your operations are going to be missing recovery opportunities.