NEW YORK, NY — Skit.ai,
the leading provider of conversational Voice AI solutions, announced today its
partnership with Collection Bureau of America, Ltd., a California-based debt
collection agency with a 60-year history in the accounts receivable management
industry.  The deployment of Skit.ai’s
solution enables the company to boost its account penetration, improve customer
experience, and execute a scalable collection strategy.

Skit.ai’s
Augmented Voice Intelligence platform, strategically integrated to automate
collection calls, is the latest addition to the agency’s tech stack. In recent
years, Collection Bureau of America has undertaken a deliberate journey to
adopt the latest and most innovative technology to modernize and optimize its
debt recovery operations. The adoption of conversational Voice AI reflects the
company’s commitment to effectively serve its diverse clientele and accounts.

“Since
adopting Skit.ai’s solution, we’ve experienced a 27% increase in call volume.
We’ve received remarkably positive feedback from our agents, who are able to
quickly resolve the consumers’ queries thanks to the context and insights
provided by the platform; additionally, the consumers are satisfied with this
self-service, secure solution to resolve their debt,” said Shawn DeLuna, President & CEO of Collection Bureau of America.
“We’re often exploring new technological solutions to bolster our collection
strategy, and Skit.ai perfectly suits our needs, as it enables us to maximize
our account outreach and ultimately increase the scale of our business.” 

Skit.ai’s
conversational Voice AI solution initiates outbound calls to thousands of
accounts within minutes; it then verifies right-party contact, and negotiates
payments from consumers, all in compliance with the industry’s regulations. The
solution is capable of handling disputes and, when needed, transfers the calls
to one of Collection Bureau of America’s live agents, providing them with the
relevant context. The solution was easy to integrate and configure to the
company’s needs.

“Our
innovative solution has led to a remarkable upswing in call volume and enhanced
account penetration for Collection Bureau of America. In alignment with the
agency’s unwavering dedication to elevating the customer experience, we have
steadfastly delivered seamless, intelligent interactions with consumers on a
grand scale,” said Sourabh Gupta,
Founder and CEO of Skit.ai.

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

About Collection Bureau of
America:

Founded in 1959, Collection Bureau of America, Ltd. is a
privately-held, diverse, minority-owned, and SOC 2 Type II-certified accounts
receivable management firm specializing in collecting consumer and commercial
debts, both locally in California and nationally. Headquartered in Hayward,
California, CBA provides professional, compliant, and effective debt recovery
solutions for businesses; backed by a team of experts and advanced technology,
the company helps clients regain control of outstanding accounts while
maintaining transparent communication and exceptional customer service. CBA is
licensed to collect in all 50 states. Visit https://www.collectionbureauofamerica.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/

CHESAPEAKE, Va. — Spring Oaks Capital, LLC is pleased to announce the hiring of John McNeill as Chief Financial Officer. John will be based in Atlanta, Georgia and report directly to President & CEO Tim Stapleford.

As a proven CFO, John brings the level of executive experience that aligns ideally given the Company’s significant growth over the past few years and exponential opportunities ahead. John joins

Spring Oaks Capital with broad FinTech and Financial Services experience, most recently serving as CFO for CAN Capital.

At Spring Oaks Capital, the CFO role goes well beyond traditional corporate finance functions. In addition to leading all finance and accounting operations, John will play a key role in helping the team develop and execute our strategic plans to build enterprise value for all stakeholders.

Spring Oaks Capital’s President and CEO, Tim Stapleford, stated, “John is precisely the kind of experienced leader the company needs as a CFO going forward. We recently completed our fourth and largest round of capital in the company’s history. His experience and financial expertise will help us grow significantly through the upcoming expansion cycle in our industry.”

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John added, “I am thrilled to be joining Spring Oaks Capital during such an exciting time and I am inspired by the company’s focus on developing a data-driven and technology-focused approach that enhances the experience for both employees and customers. I look forward to working with the highly experienced management team at Spring Oaks Capital and contributing to its increasing success.”

About Spring Oaks Capital, LLC

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

In Gebreseralse v. Columbia Debt Recovery, LLC, the plaintiff, a tenant under a residential lease agreement, vacated the premises early due to concerns over the property’s condition. In response, the property management company engaged a collection agency to recover the remaining amounts claimed as due and owing under the lease.

Over the course of several months, the collection agency sent the plaintiff multiple emails and letters containing errors. The initial letter contained an itemization of amounts due, which misstated the amount of rent and the security deposit. In a subsequent letter, the agency stated that the principal was accruing interest at the rate of 12%, which was followed by an email stating that the rate was 8%, which was followed by another letter stating that the rate was again 12%. A number of communications also included conflicting interest calculations. Finally, while several of the communications stated that the account qualified for a 50% reduction if paid by a certain date, one email provided a discounted payoff deadline that had passed three weeks before the email was sent.

The plaintiff filed suit against the collection agency in Washington state court, alleging that the inaccurate information in the defendant’s letters and emails amounted to “false, deceptive, or misleading” representations and “unfair and unconscionable means” in connection with the collection of a debt, in violation of §§ 1692e and 1692f of the Fair Debt Collection Practices Act (FDCPA).

After removal to the U.S. District Court for the Western District of Washington, the plaintiff moved for partial summary judgment. The defendant conceded that the stated interest calculations and rates were incorrect, but argued that the communications were not materially misleading, and invoked the bona fide error defense.

The court rejected the defendant’s bona fide error defense because, even if the errors were unintentional, the defendant failed to show it maintained procedures reasonably adapted to avoid the violations. As the court explained, the bona fide error defense is an affirmative defense, for which the debt collector has the burden of proof. Thus, to qualify for the defense, a defendant must prove that: (1) it violated the FDCPA unintentionally; (2) the violation resulted from a bona fide error; and (3) it maintained procedures reasonably adapted to avoid the violation.

In support of its defense, the defendant submitted a declaration stating that it “maintains ongoing training and testing to ensure compliance with the FDCPA,” and that “interest is calculated on a daily basis by the operating system based on the assigned amount or principal, the delinquency date, and the current date.” The court held that this “conclusory” declaration was “vague and uncorroborated by any evidence in the record regarding procedures.” Further, the defendant could “only surmise as to whether procedures were followed and how the violations occurred. Citing relevant case law, the court explained that “if the bona fide error defense is to have any meaning in the context of a strict liability statute, then a showing of procedures reasonably adapted to avoid any such error must require more than a mere assertion to that effect… The procedures themselves must be explained, along with the manner in which they were adapted to avoid the error.”

In addition, the court rejected the defendant’s argument that the communications were not materially misleading, finding that the misstatements concerning the amount of rent, security deposit, interest rate, and interest calculations were material because they affected the total amount of debt demanded, thus frustrating the plaintiff’s ability to intelligently choose her response to each communication. The court also rejected the defendant’s argument that, had the plaintiff contacted the defendant in response to the discounted payoff offer, she would have paid less than the amounts stated in the letter, explaining that “consumers are under no obligation to seek explanation of confusing or misleading language in debt collection letters.”

Troutman Pepper’s Take:

This case is a good reminder that in order for a defendant to avail itself of the bona fide error defense, it must do more than just assert that it has policies and procedures designed to avoid such errors. It must produce documentation evidencing the same and detailing the exact policies and procedures.

A copy of the order is available here.

WILMINGTON, Del. — After three years of investment and incubation, Phillips & Cohen Associates (PCA), the global leader in compassionate estate management and resolution, is spinning off The Estate Registry LLC.  As part of this organizational launch, The Estate Registry, designed to help people and their loved ones navigate their way through the estate planning and probate process via its LegacyNOW, NotifyALL and InheritNOW platforms, announces the following executive appointments with immediate effect:

Amy Perkins, former Chief Strategy Officer at PCA, has been appointed Chief Executive Officer (CEO) of The Estate Registry.   Amy has held several senior leadership positions within Bank of America, Citizens Financial Group and InsideARM, where she co-founded and chaired the Women in Consumer Finance Group.  This vast industry experience, as well as her immeasurable impact over the last 2+ years at PCA, makes Amy the ideal leader to help The Estate Registry achieve its ambitious, global aspirations.

Alongside Amy, Casey Cohen has been appointed Chief Operating Officer (COO). Serving as Senior Vice President (SVP) of PCA’s Alternative Investments business, Casey successfully built and ran the InheritNOW service for almost three years.  Casey has a particular expertise in marketing and operations, including a four-year run as Chief Marketing Officer in the UK for the Hippodrome Casino. He has more than 30 years’ experience in senior leadership positions, including 16 years with Caesars Entertainment Corporation.  

Joining Amy and Casey is Paul Fiumano as Chief Products Officer (CPO).  Serving as PCA’s SVP, Global Data Services in the US, Paul was the architect behind the creation of LegacyNOW and NotifyALL.  He now takes on the CPO role globally for The Estate Registry and will lead current and future development of the group’s products and services with the goal of bringing them to market to help make the lives of the bereaved easier.  Paul is a former CEO and President of Streamline Consulting and co-founder of Intelligent Net Yield, the business advisory firm.

Adam Cohen, Executive Chairman of The Estate Registry, said “these are truly exciting times as The Estate Registry is on a significant global growth trajectory.  With this incredible leadership team in place, we are uniquely situated to help estate planners, executors, and beneficiaries with services they truly need precisely when they need them most.”

About The Estate Registry LLC.

The Estate Registry LLC provides Equal Employment Opportunity for all individuals regardless of race, color, religion, gender, age, national origin, disability, marital status, sexual orientation, veteran status, genetic information, and any other basis protected by federal, state, or local laws.

As we predicted long ago, on Friday, September 8, 2023, the Federal District Court for the Eastern District of Texas vacated the changes made in March 2022 to the CFPB’s Exam Manual. On that date, the CFPB purported to use its authority to prohibit unfair, deceptive, or abusive acts or practices (UDAAPs) to target discriminatory conduct, even where fair lending laws may not apply. 

Specifically, the CFPB directed its examiners to apply the “unfairness” standard under the Consumer Financial Protection Act (CFPA) to conduct considered to be discriminatory, whether or not it is covered by the Equal Credit Opportunity Act (ECOA)(such as in connection with denying access to a checking account). Under the CFPA, an act or practice is “unfair” if (1) it causes or is likely to cause substantial injury to consumers, (2) the injury is not reasonably avoidable by consumers, and (3) the injury is not outweighed by countervailing benefits to consumers or competition. In its press release, the CFPB stated:

“The CFPB will examine for discrimination in all consumer finance markets, including credit, servicing, collections, consumer reporting, payments, remittances, and deposits. CFPB examiners will require supervised companies to show their processes for assessing risks and discriminatory outcomes, including documentation of customer demographics and the impact of products and fees on different demographic groups. CFPB examiners will look at how companies test and monitor their decision-making processes for unfair discrimination, as well as discrimination under ECOA.”

The CFPB’s blog post about the manual update provided an indication of some of the practices the CFPB would scrutinize using an “unfairness” analysis. As an example of a discriminatory practice that “fall[s] squarely within our mandate to address and eliminate unfair practices,” the blog post identifies “the widespread and growing reliance on machine learning models throughout the financial industry and their potential for perpetuating biased outcomes,” and specifically mentions “certain targeted advertising and marketing, based on machine learning models, [that] can harm consumers and undermine competition.” Observing that “[c]onsumer advocates, investigative journalists, and scholars have shown how data harvesting and consumer surveillance fuel complex algorithms that can target highly specific demographics of consumers to exploit perceived vulnerabilities and strengthen structural inequities,” the CFPB indicated that it would “be closely examining companies’ reliance on automated decision-making models and any potential discriminatory outcomes.”

After an unsuccessful attempt to convince the CFPB to withdraw its changes to the Exam Manual, the United States Chamber of Commerce and other trade associations filed a lawsuit against the CFPB in Federal District Court for the Eastern District of Texas seeking, among other things, a declaration that the Exam Manual changes are unlawful. The plaintiffs claimed that the manual update should be set aside because it violates the Administrative Procedure Act (APA) for the following reasons:

1. The update exceeds the CFPB’s statutory authority in the Dodd-Frank Act. The CFPB cannot regulate discrimination under its UDAAP authority because Congress did not give the CFPB authority to enforce anti-discrimination principles except in specific circumstances. The CFPB’s statutory authorities consistently treat “unfairness” and “discrimination” as distinct concepts. (To demonstrate the compliance burdens resulting from the update, the plaintiffs allege that the CFPB has provided no guidance for regulated entities on what might constitute unfair discrimination or actionable disparate impacts for purposes of UDAAP. As examples of issues creating confusion, the plaintiffs allege that the CFPB has not identified what are protected classes or characteristics or what activities are not discrimination (such as those identified in the ECOA), and has not explained how regulated entities should conduct the sorts of assessments that the CFPB appears to be contemplating given existing prohibitions on the collection of customer demographic information.)

2. The update is “arbitrary and capricious” because the CFPB’s interpretation of “unfairness” contradicts the historical use and understanding of the term. The plaintiffs allege that the FTC’s unfairness authority does not extend to discrimination and that Congress borrowed the FTC Act’s unfairness definition for purposes of defining the CFPB’s UDAAP authority. They also allege that the CFPB’s contemplated use of disparate impact liability when pursuing UDAAP claims flouts congressional intent and U.S. Supreme Court authority.

3. The update violates the APA’s notice-and-comment requirement because it is a legislative rule that imposes new substantive obligations on regulated entities.

In addition to claiming that the Exam Manual update should be set aside due to the alleged APA violations, the plaintiffs allege that the update should be set aside because the CFPB’s funding structure violates the Appropriations Clause of the U.S. Constitution. (Pursuant to Dodd-Frank, the CFPB receives its funding through requests made by the CFPB Director to the Federal Reserve, subject to a cap equal to 12% of the Federal Reserve’s budget, rather than through the Congressional appropriations process.) As support for their unconstitutionality claim, the plaintiffs cite the concurring opinion of Judge Edith Jones in the Fifth Circuit’s en banc May 2022 decision in All American Check Cashing in which Judge Jones concluded that the CFPB’s funding mechanism is unconstitutional. (While the case was pending, the Fifth Circuit issued a unanimous opinion in a case entitled CFSA et al v. CFPB in which it agreed with Judge Jones’s concurring opinion mentioned above and held that the CFPB’s funding mechanism is unconstitutional and that its payday lending rule is invalid.)

The plaintiffs in the Chamber case subsequently filed a motion for summary judgmentwhich was met with a dispositive motion by the CFPB. Initially, the Court rejected all of the CFPB’s arguments, including that the plaintiffs lacked standing to bring the lawsuit, that the CFPB was immune from the lawsuit as a sovereign and that venue was improper in the Eastern District of Texas. While the CFPB conceded that the plaintiffs motion based on the CFSA case should be granted, it argued that the Court should not reach or decide any of the other arguments made by the plaintiffs in support of invalidating the Exam Manual changes. The Court disagreed and, instead, in a well-written opinion, explained why the Exam Manual changes were contrary to the UDAAP statutory authority. The Court had no need to, and did not, reach or decide the other two APA issues raised by the plaintiffs

The Court first dealt with two preliminary interpretive issues. First, it concluded that no Chevron deference should be given to the CFPB’s revisions to its Exam Manual. Because the CFPB did not request judicial deference, the Court concluded that the CFPB waived this potential argument. Second, the Court observed that “‘the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’ That inquiry is ‘shaped, at least in some measure, by the nature of the question presented’—here, whether Congress meant to confer the power the agency asserts. Even if an agency’s ‘regulatory assertions had a colorable textual basis,’ a court must consider ‘common sense as to the manner’ in which Congress would likely delegate the power claimed in light of the law’s history, the breadth of the regulatory assertion, and the economic and political significance of the assertion.” [Footnotes omitted]

Based on these principles, the District Court relied upon the “major questions doctrine.” The major questions doctrine is a principle which states that courts will presume that Congress does not delegate to executive agencies issues of major political or economic significance. The “major questions doctrine” is derived from the Supreme Court opinion in FDA v. Brown & Williamson Tobacco Corp. (2000): “[W]e must be guided to a degree by common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency.” It was relied upon in a recent Supreme Court opinion in State of West VA v. Environmental Protection Agency where the Court “recognize[d] that sweeping grants of regulatory authority are rarely accomplished through ‘vague terms’ or ‘subtle device[s].’ Courts must ‘presume that Congress intends to make major policy decisions itself, not leave those decisions to agencies.’ If that major questions canon applies, ‘something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to clear congressional authorization for the power it claims.” The doctrine was also relied upon in Biden v. Nebraska where the Court likewise recognized that “the economic and political significance [of the agency’s forgiveness of federal student loans] is staggering by any measure” and that “the basic and consequential tradeoffs” that are necessarily part of the action “are ones that Congress likely would have intended for itself.”

The Court had no difficulty identifying the “major question” here. “The choice whether the CFPB has authority to police the financial-services industry for discrimination against any group that the agency deems protected, of for lack of introspection about statistical disparities concerning any such group, is a question of major economic and political significance.” The economic impact was demonstrated by the substantial sums of money (“millions of dollars per year”) spent by companies on compliance. The political implications included the impact on state and federal powers, since the CFPB would be overriding state decisions on discrimination issues, as well as the “profound” implications regarding the scope of federal power with regard to protected classes, prohibited outcomes, and defenses to claims of misconduct.

Against that backdrop, the Court found nothing in the Dodd-Frank Act to support the CFPB’s position. The Court agreed with the plaintiffs that discrimination and unfairness are treated as distinct concepts in the Act, noting, for example, the creation of a CFPB office devoted to “fair, equitable and nondiscriminatory access to credit” which references the Equal Credit Opportunity Act but makes no mention of unfairness and the statutory definition of unfairness which fails to mention discrimination. Looking to the text, structure of the Dodd-Frank Act, and the historical gloss on unfairness, the Court held that “the Dodd-Frank Act’s language authorizing the CFPB to regulate unfair acts or practices is not the sort of ‘exceedingly clear language’ that the major questions doctrine demands ….”

After concluding that the Exam Manual changes exceeded the CFPB’s UDAAP statutory authority, the Court vacated the changes to the Exam Manual. Curiously, the Court also granted an injunction against the CFPB preventing it from enforcing the changes in the Exam Manual against only members of the plaintiff trade associations.

Here are our observations and takeaways: 

1. We were surprised that the CFPB didn’t appear to argue that the case ought to be just stayed pending the outcome of the Supreme Court opinion in CFPB v. CFSA since many courts had done precisely that with respect to pending enforcement actions by the CFPB. While we expect that the trade associations would have opposed a stay since they were very anxious to obtain a ruling on the merits, the Court might very well have “kicked the can down the road.”

2. The Court may have created some unnecessary confusion by issuing an injunction precluding the CFPB from enforcing the Exam Manual changes only against the plaintiffs and their members after it had previously vacated the Exam Manual changes in their entirety as to everyone effected by those changes. Once it vacated the Exam Manual changes, why did the Court decide to even bother with issuing injunctive relief? Once it decided to grant this additional and seemingly superfluous remedy, why did it confer the benefits only on the plaintiffs and their members? We assume that it did so to insure that the CFPB does not seek to bring any supervisory action or enforcement action against the plaintiffs under the now discredited theory that it can assert that allegedly discriminatory practices are unfair. However, by sowing this confusion, trade associations other than the plaintiffs may feel it necessary to seek to intervene in the lawsuit and seek their own injunctive relief to benefit their own members or they may feel it necessary to bring a separate suit seeking the same injunctive relief. That is, of course, precisely what has recently happened in the lawsuit brought by the American Bankers Association and Texas Bankers Association challenging the legality of the final rule recently promulgated under Section 1071 of Dodd-Frank dealing with mandatory data collection with respect to small business loans. See here, here, here, here, here, here, here, here, & here for our blogs about the multiple interventions and preliminary injunction motions that the 1071 case has spawned. We don’t expect that to happen in this case since we very much doubt that the CFPB would investigate or bring an enforcement action against a company that is not covered by the injunction unless the CFPB is hoping to create a split in authority by suing in another Circuit, like the Second Circuit which has held that the CFPB’s funding is constitutional.

3. We were surprised that the CFPB waived its argument that the Court should give judicial deference to the changes to the Exam Manual based on the Chevron case even thougha case is pending before the Supreme Court which might overrule Chevron. Under the Chevron judicial deference doctrine, a court must validate an agency’s interpretation of a regulation if the statutory authority is ambiguous and the regulation is reasonable. (Perhaps the CFPB took this approach because it did not want to concede that the changes to the Exam Manual constituted a “rule” under the APA. However, the Court found against the CFPB on this issue.)

4. While the Court did not directly rule on whether Section 5 of the FTC Act (which, like the CFPA, proscribes unfair and deceptive acts and practices) also encompasses discrimination claims, the Court certainly cast aspersions on the FTC’s conclusion that it does. Perhaps, the FTC will keep its powder dry for the time being in pursuing this theory.

5. The big question is whether the CFPB will appeal to the Fifth Circuit. If the District Court had not vacated the changes to the Exam Manual, we don’t think the CFPB would appeal since its odds of prevailing in the Fifth Circuit (the home of CFSA v. CFPB and the most conservative Circuit Court in the country) would be very slim. An appeal could result in a Fifth Circuit opinion affirming the District Court on the merits and that, of course, would be much worse for them than this District Court opinion.

6. The District Court opinion will have some impact on the anticipated lawsuit in the District Court in Texas against the CFPB challenging a final credit card late fee regulation based on the binding Fifth Circuit opinion in CFSA v. CFPB, but the more significant aspect of the opinion predicated on the “major questions doctrine” will not apply. That’s because the credit card late fee regulation is contemplated by the CARD Act and is not a creature of UDAAP.

7. The highly anticipated “open banking” regulation is also not a creature of UDAAP but instead is authorized by a separate express provision in Dodd-Frank.

8. This opinion will naturally result in the industry scrutinizing other pronouncements by the CFPB based on UDAAP as statutory authority. One obvious target is likely to be a Circular published in 2022 by the CFPB where it concluded that data security breaches resulting from a company’s negligence or malfeasance could be a UDAAP violation.

9. We do not think that there is any reasonable possibility of Congress enacting legislation which would define UDAAP to encompass discrimination.

10. While this case dealt with the “unfairness” prong of UDAAP and not the “abusive” prong of UDAAP, we would expect the industry to scrutinize any past or future explications of what the CFPB deems to be abusive to ensure that it passes muster under the “major questions doctrine.”

TAMPA, Fla. — McGlinchey Stafford is pleased to announce that Chantel Wonder has joined the firm’s Financial Services Litigation practice group in Florida as Of Counsel. Resident in Tampa, Chantel is one of 33 attorneys McGlinchey has brought on in 2023 as part of a focused hiring effort to expand its highly integrated team of best-in-class attorneys.

“We are pleased to welcome Chantel to our dynamic legal team here in Florida,” said Will Grimsley, Co-Managing Member of McGlinchey’s Fort Lauderdale and Jacksonville offices. “Her knowledge of the local legal and business climates and commitment to providing practical advice align well with our firm’s approach.”

As an experienced litigator, Chantel is well-regarded in the financial services and insurance industries. She focuses her practice on debt buyer and mortgage work, with experience in credit cards, debt collection, bankruptcy, and the wide spectrum of financial services litigation. Many of her cases surround consumer protection litigation.

“Clients trust Chantel’s years of experience and tenacious approach to litigation,” said Shaun Ramey, Co-chair of McGlinchey’s national Financial Services Litigation group. “Whether representing clients in federal and state litigation, class actions, trials, or appeals, Chantel has a proven track record of skillfully helping clients navigate complex legal matters.” 

Chantel’s practice also includes insurance defense and employment litigation, with experience in first-party property matters and third-party claims. She represents residential and commercial property managers (including homeowners association boards) as well as human resources managers and employers.

“Chantel’s broad experience matches well with McGlinchey’s client base,” said Dan Plunkett, chair of the firm’s Enterprise Litigation and Investigations team. “We look forward to bringing her perspective and skillset to solving our clients’ problems.”

Joining McGlinchey from Gordon and Rees, Chantel worked for almost a decade in-house with a national debt buyer. In this role, she gained exposure to the wide variety of matters that cross the general counsel’s desk. She handled many highly contested cases and shepherded hundreds of bench trials on behalf of the company.

Chantel received her J.D. from Stetson University College of Law in 2010 and is licensed in the state of Florida. She earned her bachelor’s degree in philosophy from Stetson University in 2007.

About McGlinchey

McGlinchey Stafford is a premier midsized business law firm offering services in nearly 30 practice areas through a highly integrated national platform. McGlinchey attorneys leverage bold innovation, diverse talent, and leading-edge technology across our powerful network to serve clients at the local, regional, and national level. With nearly 160 attorneys licensed in 33 states, McGlinchey operates from 17 offices nationwide. The firm currently has 23 attorneys and 12 practice areas recognized in Chambers U.S.A. and Chambers FinTech 2023, and 65 attorneys recognized by Best Lawyers, 40 attorneys recognized in various Super Lawyers rankings, 44 practice areas recognized by Best Law Firms, and was named a “Top Performer” by the Leadership Council for Legal Diversity (LCLD) since 2018. To learn more, visit www.mcglinchey.com.

EDMONTON, Canada — MetCredit, a national collection agency serving many of Canada’s largest telecommunications firms, financial institutions, retailers, and B2B organizations, is pleased to announce the appointment of Christen Rumbles as its new Chief Financial Officer (CFO). Christen brings a wealth of financial expertise and strategic leadership to the organization.

Founded in 1973, MetCredit has consistently delivered outstanding accounts receivable solutions to a diverse portfolio of clients. The company’s commitment to excellence and innovation has made it a trusted partner in the Canadian business landscape.

Christen Rumbles, a seasoned financial executive holding designations of both CPA and CA, has an impressive track record of driving financial growth and optimizing corporate operations. As CFO, she will play a pivotal role in guiding MetCredit’s financial strategy and ensuring the company’s continued success in a dynamic and rapidly evolving industry.

“MetCredit is at the forefront of accounts receivable management in Canada, and I’m excited to join such an exceptional team,” says Ms. Rumbles. “I look forward to collaborating with my new colleagues to further strengthen MetCredit’s financial foundation, drive growth, and deliver exceptional value to our clients.“

Prior to joining MetCredit, Christen held key financial leadership positions in prominent Canadian companies: as Financial Leader at Kimberley Homes, as Controller and later Director of Finance at the Edmonton Chamber of Commerce and Senior Accountant at Deloitte — roles in which she showcased her ability to navigate complex financial landscapes and drive sustainable growth. 

“We are thrilled to welcome Christen Rumbles as our new Chief Financial Officer,” said Brian Summerfelt, CEO of MetCredit. “Her experience and financial acumen will be invaluable as we continue as innovation leaders and provide unparalleled services to our clients Canada-wide. I am confident Christen will contribute significantly to our continued growth and tradition of success.”

About MetCredit

With offices in Vancouver, Edmonton, Toronto and Montreal, MetCredit is one of Canada’s top-performing national collection agencies. The company is licensed and bonded to collect consumer and commercial debt in all Canadian provinces and territories, and in the United States through MetCredit USA. MetCredit is dedicated to providing innovative and effective solutions that help clients recover outstanding debts while maintaining strong client relationships.

For media inquiries, please contact: 

Brian Summerfelt President & CEO, 

Email: bsummerfelt@metcredit.com; Toll-free:1 (888) 797-7727 ext 2377

For more information about MetCredit, please visit metcredit.com.

It can be frustrating when a consumer files a Fair Debt Collection Practices Act (FDCPA) lawsuit in federal court despite the existence of a previous or ongoing state court action to collect the debt at issue. Recently, however, the 10th Circuit Court of Appeals sided with a debt buyer, agreeing that a consumer’s federal FDCPA lawsuit could not proceed because the consumer should have raised his concerns in a previous state court action regarding the debt. 

In McMurray v. Forsythe Finance, Case No. 21-41014, a debt collector filed a suit against the consumer in state court over a deficiency balance from the repossession and sale of a vehicle. The consumer answered the state court complaint, but the collector was granted a default judgment after the consumer failed to respond to the debt buyer’s motion for summary judgment.

The consumer subsequently filed a lawsuit in federal court alleging that the debt buyer violated the FDCPA by failing to have a debt collection license when it filed the state court lawsuit to collect the debt. In response, the debt buyer argued that if the original action caused the injury, then the consumer’s claims should have been brought during the original state court action. (Editor’s Note: Utah recently updated is licensing requirements, see here for details.)

The court agreed with the debt buyer, stating that since the alleged improper failure to have a license existed before the state court lawsuit was filed and arose from the same transaction as the state court claims (i.e., the attempt to collect the debt through the state court suit), the consumer could and should have raised his claims in the original state court action. Further, the Court noted that the consumer’s claims against the debt buyer were precluded since the results in the federal FDCPA action would nullify the previous state court judgment.    

insideARM Perspective

Creditors, debt collectors, and debt buyers are certainly familiar with the situation where a consumer does not respond to any attempts to contact them, does not answer, or appears after a suit is filed, and only pops up when they notice their wages are being garnished. This type of consumer can be extremely frustrating as they try to undo months or years of work and instead claim the debt collector did something wrong.

While it may not be the exact same scenario in every case, and state civil procedure laws may differ, this case still provides a boost to those collectors dealing with litigious pro se consumers or those who obtain legal counsel after a judgment has been entered. 

On August 18, a judge in the U.S. District Court for the Western District of New York granted the plaintiff’s motion for class certification for alleged violations of the Fair Debt Collections Practices Act (FDCPA) relating to an allegedly improper debt assignment notification.

In McCrobie v. Palisades Acquisition XVI, LLC, the plaintiff incurred a credit card debt, which was later assigned to a new creditor. In 2007, the new creditor commenced an action to recover the debt and obtained a default judgment against the plaintiff. The plaintiff claimed that because the summons and complaint had been mailed to an old address, he had no knowledge of the action or the default judgment. The default judgment was later assigned to Palisades Acquisition.

In 2014, an attorney from defendant Houslanger & Associates signed an income execution on behalf of Palisades Acquisition representing that it had the right to execute upon the judgment. Palisades Acquisition subsequently recovered $572.45 by executing on the plaintiff’s income.

In 2015, the plaintiff contacted Houslanger & Associates and requested the chain of title that proved Palisades Acquisition had the right to enforce the default judgment. Houslanger & Associates provided a copy of the bill of sale of the portfolio, which did not reference the plaintiff or the default judgment. Based on this information, the plaintiff filed a motion to vacate the judgment, which was granted. The garnished money was returned to the plaintiff, but the vacated judgment was later reinstated because the motion had been untimely. The plaintiff never repaid the garnished money.

In 2015, the plaintiff filed suit asserting that Palisades Acquisition and its attorneys’ enforcement of the default judgment violated the FDCPA. The plaintiff argued that Palisades Acquisition did not take the steps required to enforce the judgment. Specifically, the plaintiff argued that for an assignment of a judgment to take effect, the assignor must notify the judgment debtor of the assignment. While an employee of Palisades Acquisition testified that when it purchases a new debt portfolio, it will typically send an introductory letter to the debtors, the employee did not know whether Palisades Acquisition’s predecessors in interest sent a notice of assignment to the plaintiff.

The plaintiff moved to certify a putative class consisting of debtors included in the debt portfolio at issue who were subject to allegedly unlawful collection efforts by Houslanger & Associates and had money taken from them through either an income execution or a bank account garnishment. The defendants objected. After the magistrate judge heard oral argument, the parties submitted additional briefing to address whether the plaintiff has standing in light of TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). The magistrate judge issued a report & recommendation finding that the plaintiff had standing and the class should be certified. The defendants again objected. After briefing, the district court judge adopted the magistrate judge’s report & recommendation.

Both the magistrate and district judges found that the plaintiff had standing because the defendants allegedly deprived the plaintiff of more than $500 for several months by enforcing a default judgment in a manner that allegedly violated the FDCPA and state law. Further, the plaintiff alleged that the defendants still claim that they have a right to enforce that judgment if they so choose. The district court judge also agreed that the proposed class satisfied the requirements for class certification.