BIRMINGHAM, Ala. — ARM Compliance Business Solutions is excited to announce that Debra Ciskey has joined the company as a Senior Compliance Advisor. In this role, Debra will navigate ARM Compliance Business Solutions’ clients through the ever-changing regulatory compliance requirements of consumer financial laws by enhancing their Compliance Management System through policy development and implementation, training development, service provider oversight, audit controls and risk assessments.

2023 marks Debra’s 43rd year working in the collection industry.  Her introduction to the industry began when she answered a newspaper ad for a librarian at a “private company,” which happened to be the American Collectors Association. Library maintenance was just a part of her job as the Assistant Director of Public Affairs at ACA. 

Debra compiled ACA’s first FDCPA Guide with legal citations, which also became the participant workbook, with annual updates for the first decade with which ACA offered its FDCPA Seminars. Debra became an ACA Certified Instructor in 1983 and was a regular stand-in, initially, when member-instructors had last-minute conflicts. She was promoted to Director of Education in 1985 and guided the faculty, trained new instructors, wrote numerous new offerings for ACA Education—seminars and products—and led the effort on the production of the first computer-based training product that ACA offered on FDCPA compliance. Serving as ACA’s most-tenured instructor, she has taught more than 225 ACA seminars. 

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Debra left the ACA Staff in 1993 to join Anderson Financial Network, Inc., now known as Afni, Inc., where she was initially Director of Education, then Director of Compliance, until 2015. Debra was elected to the ACA board of directors in 2012 and served until her second term ended in 2018.  Debra directed compliance efforts at Wakefield & Associates during 2015-2019, then at CACi from 2020-2023. 

“I am delighted that Debra is joining the ARM Compliance Business Solutions team,” said Sara Woggerman, President of ARM Compliance Business Solutions. I have observed Debra’s leadership throughout the industry for many years and have admired her professionalism and clear explanations of complex operational and compliance issues. Her experience working for multiple companies throughout the industry and multiple industry changes will help our clients of all sizes.”

Debra stated, “I am thrilled to be joining the team at ARM Compliance Business Solutions! I’m looking forward to helping clients solve problems that often occur at the intersection of compliance and operations.  I like to think about the “and,” not the “or,” between compliance and ops, finding solutions that help collection agencies serve their clients and consumers.  I’ve also worked with creditors who needed to improve their internal collections and training processes. In today’s compliance world, we must have crucial conversations with clients as well, because regulators paint us all with the same brush.  My experience with auditors and enforcement staff will support our efforts as we move forward together.” 

About ARM Compliance Business Solutions, LLC. 

ARM Compliance Business Solutions, LLC. was formed in 2020 to provide professional advisory services to the accounts receivables management industry through its delivery of compliance risk assessments, outsourced compliance services, service provider oversight and role-based training. ARM Compliance Business Solutions is a recognized leader in compliance and operational strategies to improve the consumer experience and enhance business practices for their clients. For more information, visit www.armcbs.com or contact Sara Woggerman at sara@armcbs.com. 

Show Notes:

Section 1033 of Dodd-Frank authorized the #CFPB to write rules around personal financial data rights. Former CFPB Assistant Director, Corey Stone, joins the podcast to discuss the goals of 1033 and whether the proposals went far enough. 

The data landscape has changed since Congress included this “sleeper” section into the Act. Corey believes the last decade shows us that industry has caught up to what Congress had in mind back in 2011 and therefore the CFPB’s proposals may not be such a heavy lift after all. The question remains whether this will promote competition as the CFPB’s narrative suggests, or will it, like most regulations, result in a “too small to succeed” scenario. 

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DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests or Clark Hill PLC. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.

LAKE FOREST, Ill — Transworld Systems Inc. (TSI), the largest U.S. technology-enabled provider of accounts receivable management (ARM) solutions, announced today that Jeff Mersmann has joined the company as Executive Vice President. Mr. Mersmann joins TSI from Navient where he was President of the Pioneer Credit Recovery business unit responsible for leading collection operations. 

In his new role, Mr. Mersmann will be responsible for all consumer accounts receivable management (ARM) and collections operations globally, reporting to Joel Petersen, President of TSI. 

“Jeff’s 27 years of client-centric collections operations experience combined with TSI’s market-leading proprietary algorithms and omni-channel technology will deliver meaningful results for TSI clients,” said Joseph Laughlin, Chief Executive Officer of TSI. 

“I’m honored and excited to join TSI,” said Mr. Mersmann. “I’m looking forward to working with the talented team of professionals at TSI and leveraging the proprietary collection algorithms and technology to serve the needs of our customers.” 

About Transworld Systems Inc. 

TSI is the largest technology-enabled provider of Accounts Receivable Management (ARM) solutions in the United States. The Company’s solutions include debt collections, customer relationship management and business process outsourcing. TSI also owns UAS, a technology-enabled primary loan servicer for student loans. TSI differentiates itself with its collection analytics, digital collections technology, global scale, and an industry-leading compliance management system. Its clients include Fortune 100 corporations, financial institutions, hospitals, government agencies, property management companies, and small and medium-sized businesses. To learn more, please visit tsico.com.

Minor procedural errors can be frustrating for debt collectors because they can lead to litigation, even where the consumer has not suffered any real harm. In a bit of good news, however, a recent case has handed a shield to debt collectors when it comes to procedural errors in litigation. 

In Ingersoll v. Brandsness et al (21-cv-01060; D. Or. 2023), a consumer filed suit against a collection agency for violating the Fair Debt Collection Practices Act (FDCPA). The consumer included a claim against the agency for filing a motion for default in a prior collection suit against the consumer. 

The only problem: The consumer had filed an answer to the suit, so there was no basis for a default. The motion was filed in error by the law firm and quickly dismissed by the Court.

The consumer argued that this erroneous motion amounted to an improper attempt to collect a debt. However, the court dismissed the claim finding that the error was only a minor procedural misstep and did not amount to an FDCPA violation. The court focused on the harm (or lack thereof) to the consumer and pointed out that there was nothing to remedy as the issue was quickly resolved by the state court.

Read the opinion here.

insideARM Perspective

This is, undoubtedly, a win for debt collectors. This decision doesn’t mean your organization should throw caution to the wind, or ease up procedural checks and balances. However, decisions like this are great to keep on hand if your organization or your law firm partners find themselves on the receiving end of a lawsuit based only on a cured, no harm, procedural misstep.   

On April 4, the U.S. District Court for the Northern District of Texas declined to increase or treble the plaintiff’s $8,500 jury trial damages awarded under the Telephone Consumer Protection Act (TCPA) after failing to find that the defendant acted willfully or knowingly under TCPA § 227(c)(5)(B). Indeed, the judge cut the award to $6,500. Since the TCPA does not have a fee-shifting remedy, that $6,500 win for the plaintiff is the total outcome of this federal court jury trial.

In Noviello v. Adam Wines Consulting, LLC, the plaintiff brought claims against the defendant for alleged violations of the TCPA related to telemarketing calls and texts sent to his personal cell phone for the purpose of providing business financing. At trial, the plaintiff offered evidence of 10 text messages and three voicemails from the defendant despite the plaintiff’s registration on the federal Do Not Call (DNC) registry. The plaintiff also provided evidence that four of these text messages followed the plaintiff’s cease and desist demand. The jury awarded the plaintiff the maximum statutory penalty of $500 per violation for each of the 13 calls under the plaintiff’s federal DNC claim (for a verdict of $6,500). The jury also found the defendant liable for sending the four texts after the cease and desist demand, awarding the $500 maximum penalty for each of those texts as well (for a verdict of $2,000 or a total of $8,500). In sum, the jury awarded the maximum amount it could, short of a willfulness finding.

After trial, the plaintiff petitioned the district court to: (1) enter judgment separately for the jury’s awards under the federal DNC registry claim and the internal DNC list claim because those claims were separate counts, granting the plaintiff the maximum verdict of $8,500; and (2) treble the plaintiff’s damages because the evidence showed the defendant exhibited a reckless disregard for its compliance with the TCPA.

The court declined both requests and instead entered judgment for the plaintiff on the jury’s verdict for only $6,500, cutting the award by $2,000.

On the issue of the plaintiff’s overall award, the court found that § 227(c)(5) does not allow for an award of statutory damages for each violation during a call, but instead limits statutory damages to one award per call, limiting the plaintiff’s overall award to $500 on each of the 13 calls, regardless of the separate counts. This resulted in the $2,000 cut to the jury award.

On the issue of treble damages, the court declined to find that the defendant willfully or knowingly violated the TCPA. Turning to the evidence presented at trial, the court found that there was not enough evidence to establish that the person who informed the plaintiff that the defendant would cease future calls was the same person who then texted the plaintiff again following the cease and desist communication. Without more evidence tying these text messages to the same individual, the court found that the plaintiff’s arguments for general and specific deterrence did not support the finding of treble damages and declined to increase the jury’s award.

MANCHESTER, United Kingdom — Phillips & Cohen Associates (UK) Ltd, the Manchester-based deceased account management business, has completed the acquisition of Ardent Credit Services Ltd, the Liverpool-based debt recovery and credit management services provider, following approval from the Financial Conduct Authority (FCA). Ardent will now formally become a wholly owned subsidiary of PCA’s UK business.

Adam Cohen, Co-Founder and Chief Executive of Phillips & Cohen Associates, says the announcement will help accelerate plans for integrating the two companies: “An approval process that we expected to take months has been completed in weeks. In our view, this reflects the confidence the FCA has in the credibility, professionalism, and senior leadership of our two organisations,” he says.

“We can now move quickly with our plans for closer collaboration, building on our long-term strategy to further extend the range of services we can deliver to our clients in the UK and internationally.”

Plans for the intended acquisition were announced in February and were subject to FCA approval. Steve Murray, the Founder and CEO of Ardent Credit Services, will stay in an advisory capacity in the short term to ensure a smooth transition of the business. John Ricketts continues as Managing Director, reporting to the Chief Operating Officer at Phillips & Cohen Associates, Nick Cherry. 

In completing the acquisition, PCA is adding 26-years of proven expertise and excellence in the UK collections industry, having been attracted by Ardent’s ‘digital first’ approach to business and a like-minded approach to how customers should be treated, which goes above and beyond the remit of Treating Customers Fairly.

Nick Cherry says that the ambition now is to grow: “It’s an exciting time for the business, our people, and the local community as we have the ‘green light’ from the FCA to write the next chapter in the PCA/Ardent history,” he concludes.

That’s a long title for an article and one that makes some lofty claims about the power of Credit Counseling. The premise behind this lengthy, bold statement is simple, “Prioritizing consumer financial health and well-being is good for business.”  

Help Consumers Help Themselves

Collection representatives interact with people at a crisis point in their lives, which puts them in a unique position to offer real help to consumers just when they need it most.  Yes, obtaining a commitment from a consumer to make payment on an account is the purpose of collections, but if they are struggling to make payments on other credit lines or to afford essential housing and living expenses, what is the likelihood that they’ll be able to stick to any agreed upon payment arrangements?

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Fortunately, non-profit Credit Counseling exists to help consumers get a better handle on their finances, especially when they are having trouble managing their debt. By partnering with a reputable non-profit credit counseling agency, ARM entities will have a trusted resource for their representatives to give consumers, showing that their organization cares about the consumer’s overall financial health and not just the accounts they are collecting on. This can provide some emotional relief to collection teams and make it easier for them to request payment on an account when they know they can connect struggling people to a counseling agency for valuable financial guidance at the conclusion of the call. 

What do Credit Counselors Really Do?

Once connected to a counseling agency, a certified Credit Counselor will complete a thorough review of the consumer’s financial situation, prepare a current and projected budget, and provide recommendations and resources specific to their financial situation.  If appropriate, the consumer will have an opportunity to enroll in a Debt Management Program, which is a structured repayment program for unsecured debt where a consumer repays their creditors over a 3 – 5 year term. This is not a debt settlement program. Consumers will pay 100% of their debt back but at lower interest rates.  

Credit Counseling’s holistic budget counseling and debt management program strives to put clients in a better position to meet all of their expenses, rather than having to decide which bill they can afford to pay each month. Any improvement the client can make to their personal finances will lead to higher recovery rates for their creditors.

Reputation is Everything

Beyond meeting professional standards, ARM entities can demonstrate though daily interactions that they care about consumers’ overall financial well-being by building access to credit counseling into their collection processes. 

See what the CFPB says about credit counseling here.

Considerations when Choosing a Reputable Credit Counseling Partner

These are the questions to ask when confirming the reputation of a credit counseling partner?

• Are they a member of one of the two major industry associations, the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA)? This can be verified by visiting the Association’s websites: NFCC and FCAA

• Are they licensed to operate in the states that you do business? Some counseling agencies are licensed to operate nationally, while others may be licensed in just a handful of states. If you are a large collection agency, then it will be important to have national coverage, however, if you are an agency that operates in just a few states then you may want to consider working with a smaller agency doing business in the same area. 

• Does the agency have the capacity and partnering experience to handle your referral business?  You want to work with a counseling agency that recognizes that the quality of their performance as a referral partner is a reflection on the referring organization. Can they do “on the spot” counseling or do they need to schedule appointments? Do they have the reporting capabilities to track the metrics that are important to you.

Promote Credit Counseling with your Creditor Partners

Currently, the policy of many banks is to pull accounts back from collections if a credit counseling agency wants to include the account in a debt management program. This policy disincentivizes collection agencies from referring consumers to credit counseling for further assistance that would ultimately make them better payers. The collections and credit counseling industries should make a joint effort to encourage creditors to allow our industries to work more closely together for the benefit of consumers. At this point, it would be a great step to start the conversation with your creditor partners by pointing out the potential benefits mentioned in this article and suggest a 1 or 2-year pilot.

TAMPA, Fla. — OneTouch Direct, a global business process outsourcing company, today announced the formation of its newest company subsidiary, OTD Americas and the launch of state-of-the-art centers in Bogota (3 sites), Colombia, with ready available sites in Mexico City (3 sites) and added options for Eastern Europe and Asia.

OneTouch Direct with OTD Americas is focused on extending its suite of services for full account management for every phase of the account lifecycle. OTD Americas has invested in recruiting senior level industry leaders recognized for top tier partnership management, best in class performance delivery and quality service. These leaders have a long career history of working together successfully and providing unique contact services, collections, customer service (AML, loyalty retention, reactivation, education) programs for world recognized brands.

OTD Americas offers integrated omni-channel customer engagement solutions for care, customer service, collections, customer retention, back-office support and specialty program solutions designed to drive exceptional customer interactions and enhance our clients’ brands in US managed state of the art centers across Latin America. Focused on facilitating our clients’ low cost, high value strategic growth initiatives, OTD Americas partners with global brands to provide scalable, data-driven solutions across the full customer account lifecycle. 

“OTD Americas creates a significant global footprint with multiple operation and data center sites throughout the US, Colombia, Mexico, Asia, and Eastern Europe,” said Chris Reed, EVP of OneTouch Direct, “which complements our corporate strategy to provide multi delivery quality solutions for our client partners and their customers.” 

As an established contact center market, Bogota, Colombia, has excellent infrastructure, technology, utilities, and telephony combined with strong cultural and economic ties to the United States. Bogota offers a convenient, travel safe location with a highly skilled workforce, cost advantages, and proximity to the United States. In Bogota, OTD Americas’ state-of-the-art contact centers are strategically located in central business districts, university towns, and technical or commercial hubs with high-caliber candidates and convenient to public transportation, public services, retail stores ensuring workforce stability and low attrition rates.

With the formation of OTD Americas, we offer a choice of multiple state of the art facilities with a world class agent workplace supporting over 8,000 employees including a bilingual, US bicultural contact center featuring a robust personal development program including paid English language classroom program, hair and nail salon, indoor sports field, and 24-hour health care with doctor onsite among other employee focused amenities. With leading edge data and telephony technology using US-based co-lo centers, OTD Americas ensures high levels of security and strict compliance with industry standards.

About OTD Americas

OTD Americas, the nearshore subsidiary arm for OneTouch Direct, provides full service contact solutions from state of the art centers in Colombia, Mexico, Asia, and Eastern Europe with the ability to build to suit upon client demand. As a contact center outsourcing company, OTD Americas offers integrated omni-channel customer engagement for customer service, collections, back office support, and custom technology solutions designed to drive exceptional customer interactions and enhance our clients’ brands. Partnering with leading global brands representing clients in Banking and Financial Services, Consumer Auto, FinTech, Healthcare, Insurance, Media, Retail and e-commerce, Technology, Telecom, and Utilities industries, OTD Americas is focused on facilitating our clients’ strategic growth with Class A workplace, leveraging exceptional employee attrition rates, and ensuring brand protection in a competitive unique cost benefit structure. Our global delivery model offers flexible onshore, nearshore, offshore, and WAHA service options spanning the US, Mexico, Colombia, Asia, and Eastern Europe. 

About OneTouch Direct

OneTouch Direct, parent company for OTD Americas, is a US based business process outsourcing company delivering best-in-class customer experiences (CX) for some of the world’s largest and most loved brands. Rooted in our passion and deep expertise, OneTouch Direct creates unified brand experiences that break the rules and foster meaningful relationships. For over 20 years, our people-centric, data driven outsourcing solutions have powered better revenues and profitability across the full customer life cycle. For more information visit https://www.onetouchdirect.com/.

MINNEAPOLIS, Minn — DCM Services, Inc. (“DCMS”), a portfolio company of NMS Capital (“NMS”) names Scott Weddle to the position of Chief Operating Officer. 

Scott brings over 35 years of industry experience and has held various leadership positions at top-tier organizations, most recently at Fortitude Re and HomeServe USA. Scott provided leadership and expertise as the Assistant Vice President at Fortitude Re managing all telephony and technology applications while leading and forecasting multiple high-volume contact centers both directly within the domestic US and indirectly through offshore resources located in Manila. At HomeServe, he served as Vice President of Operations, leading an international team responsible for the strategic direction of the contact center and claims operations. 

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Michael Rosenthal, Chief Executive Officer of DCM Services commented, “Scott is a results-driven leader with a passion for building high-performance teams and creating a culture of accountability and continuous improvement. As COO of our company, Scott will leverage his expertise in operational strategy, process optimization, and team leadership to drive growth and deliver exceptional results for our customers and stakeholders, while improving on our already dynamic culture. We are excited to have him on board and look forward to his contributions to our success.”

About DCM Services

Minneapolis-based DCM Services is the industry leader in estate and specialty account resolution services, maximizing the value of client portfolios across financial services, healthcare, auto, retail, telecom, credit union, government, and utility industries through innovation and performance. Its recovery solutions offer a full range of services, from proprietary web-based solutions to full outsourcing, maintaining an unmatched spectrum of innovative solutions that increase recoveries, protect brand value, and enhance survivor relationships – with respect and sensitivity. For more information on all DCM Services’ offerings, please visit www.dcmservices.com. 

On March 30, 2023, a three-judge panel of the Superior Court of Pennsylvania held in a precedential opinion that debt collectors can send collection letters to debtors after the expiration of the statute of limitations without violating federal or Pennsylvania law, so long as the debt collector does not file suit in court.

The panel rejected plaintiff Starleen Matteo’s appeal of an Erie County judge’s decision to sustain preliminary objections filed by defendant EOS USA, Inc. on the grounds that its dunning letter did not violate the Fair Debt Collection Practices Act (FDCPA) or the Pennsylvania Fair Credit Extension Uniformity Act (FCEUA).

Matteo claimed that the EOS letter was false, misleading, and deceptive because “it offered financial freedom even though such freedom had already been obtained by virtue of the statute of limitations” and because it stated that EOS “was there to ‘help’ and ‘assist’ the debtor,” but did not advise her that the statute of limitations had already expired on her past due Verizon bill.

The court disagreed, opining that the expiration of a statute of limitations does not invalidate a debt, but simply makes it legally unenforceable: “As long as the debt collector does not initiate or threaten legal action on a time-barred debt, it is permitted to seek voluntary repayment without advising that the statute of limitations has run.” 

The court also rejected Matteo’s argument that the letter constituted a settlement offer because the letter did not use the word “settle” or imply that it was referring to settlement of the debt.  However, the court reasoned, in dicta, that even if the letter had contained such language, “this, standing alone, would not render the letter false, deceptive or misleading because there is nothing improper about a settlement offer.”  To that end, the court concluded, “the phrases, ‘willingness to work with you’ and ‘discuss other options’ cannot reasonably be read to imply a threat of litigation.”

Finally, the court upheld the trial judge’s ruling that Matteo did not plead an “ascertainable loss” by receiving the letter, as required by the FDCPA and FCEUA.

The Matteo opinion is a welcome outcome for the industry in Pennsylvania, but is not likely to have seen its last day in the news: Matteo’s counsel told Law360 he will request rehearing en banc and, if that fails, appeal to the Supreme Court of Pennsylvania.

Read the opinion here