MOUNT LAUREL, N.J. — Ceteris is pleased to welcome General Counsel, Daniel J. McCusker, to the company.  With more than 20 years in ARM leadership roles in legal and compliance within the collection industry, private sector and law firm arenas, Ceteris is confident that Dan’s expertise will make an immediate impact.  Dan’s high energy, positive attitude, and professionalism combined with his diverse knowledge and record of successes pairs perfectly with the Ceteris vision and values.

Jonathan Pike, CEO of Ceteris, said, “We are excited to welcome Dan to Ceteris as our new General Counsel and as a member of our Executive Team.  Dan brings a wealth of experience in all facets of legal and compliance plus executive management that will assist us in meeting our aggressive goals and initiatives.  Dan’s background in building legal networks, debt acquisitions and new lines of servicing businesses demonstrates our commitment to broadening the suite of services we offer our customers. Furthermore, Ceteris is quickly expanding to provide end-to end services at the forefront of our business model.”

Throughout his career Dan has worked with customers that include some of the top credit issuers, financial institutions, debt buyers, and a myriad of commercial entities. He holds a bachelor’s degree in Government & Politics from Widener University, and a Juris Doctorate from Roger Williams University School of Law.

About Ceteris Portfolio Services, LLC

Ceteris is a nationally licensed servicing company providing debt recovery solutions and other related services for consumers and commercial businesses across a broad range of financial assets.   Ceteris provides first- and third-party revenue cycle management, business process outsourcing and portfolio backup servicing to heavily regulated, high volume industries including banking, automotive finance, credit card, equipment leasing, medical, telecommunications, utilities, retail and other industries.  For more information please visit www.ceterisholdco.com/CPS.

The CARES Act, which includes—among many other things—modifications to credit reporting requirements for data furnishers during the pendency of the pandemic, caused a bit of confusion. On Tuesday, the Consumer Financial Protection Bureau (CFPB) aimed to clear some of that confusion up by releasing an FAQ on the topic of credit reporting during COVID-19.

The seven-page document covers 10 questions on the topic. Many of the questions deal with the CFPB’s policy statement outlining its supervisory and enforcement practices related to the pandemic, which was issued in early April. Below are summaries of the questions and answers.

Furnishers should pay special attention to FAQ 8, which details that reporting a disaster code does not meet the compliance requirements of the CARES Act.

Editor’s Note: While we provide the summaries below, we also encourage our readers to read the FAQs in full due to the sensitive nature of this topic.

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Question 1: What did the CFPB’s statement on consumer reporting—issued shortly after the CARES Act was enacted—say?

The CFPB noted that it expected furnishers to comply with the CARES Act, specifically related to the requirements on how to report accounts that were not delinquent prior to COVID-19. The CFPB also indicated that it would consider the individual circumstances of the credit reporting agencies and furnishers when evaluating compliance with requirements to investigate disputes in specific timeframes. The CFPB will be looking to see if the organization made good faith efforts to investigate disputes as quickly as possible. If the organization did not face any “impediments due to COVID-19,” then the normal timeframe applies.

Question 2: What did the CFPB’s statement say about enforcement of the requirement to report as current certain accounts for consumers impacted by COVID-19?

The CFPB states that it expects compliance with the FCRA and the CARES Act, and it “remains committed to vigorously enforcing” applicable laws. The CFPB then reiterates that it will review the specific circumstances of an organization and determine whether the organization made a good faith effort to comply as quickly as possible.

Question 3: What did the CFPB’s statement say about citing and suing furnishers for failure to investigate disputes within specific timeframes?

The CFPB states that it will provide some flexibility with timeframes based on the individual circumstances of the organization, acknowledging that—just like so many other businesses—furnishers faced operational and business challenges during the pandemic. However, the CFPB clarifies:

Statement did not say that the Bureau would give furnishers or consumer reporting agencies an unlimited time beyond the statutory deadlines to investigate disputes before the Bureau would take supervisory or enforcement action. Furnishers and consumer reporting agencies remain responsible for conducting reasonable investigations of consumer disputes in a timely fashion.

Question 4: The CARES Act calls for accommodations to pandemic-impacted consumers—what is an accommodation in this context?

The CFPB defines this as any payment assistance or relief granted to pandemic-impacted consumers during the pandemic. The time frame includes from January 31, 2020, until 120 days after the termination of the national emergency. The CFPB provides examples, such as agreements to defer payments, make partial payments, forbearances, or loan modifications.

Question 5: Are furnishers required to provide accommodations to pandemic-impacted consumers?

The CARES Act requires certain accommodations for two types of loans: mortgages and Federally held student loans. Even if no accommodation is required, the CFPB encourages furnishers to work with borrowers.

Question 6: What are a furnisher’s reporting obligations if it provides an accommodation?

This answer is broken down depending on the scenario:

• If the account was current prior to the accommodation, then the furnisher must continue to report the account as current.
• If the account was delinquent prior to the accommodation, the furnisher cannot advance the delinquent status during the accommodation.
• If the consumer brings the account current during the accommodation, then the furnisher must report it as current.

Question 7: What should furnishers consider when reporting accounts?

The CFPB urges furnishers to look at the information they are reporting for the consumer as a whole. The following example is provided:

[I]nformation a furnisher provides about an account’s payment status, scheduled monthly payment, and the amount past due may all need to be updated to accurately reflect that a consumer’s account is current consistent with the CARES Act. Furnishers are encouraged to ensure they understand the data fields that the consumer reporting agencies to whom they report utilize and which standard data reporting formats may apply.

Question 8: Can furnishers comply with accommodation reporting requirements by using a special comment code, such as a natural or declared disaster or forbearance?

Reporting a disaster or forbearance code does not meet the CARES Act requirement. The CARES Act requires that the account remain current if it was current prior to the accommodation, or not to advance the delinquency if it was delinquent prior to the accommodation. Disaster or forbearance codes do not meet this standard.

Question 9: Can a furnisher report all of the consumer’s accounts as in forbearance?

Since the FCRA requires accuracy and integrity in the information reported, the CFPB states that furnishers should not lump accounts together like this.

Question 10: What must furnishers report when the accommodation ends?

The furnisher cannot report an account as delinquent after the accommodation ends if the consumer met his or her requirements during the accommodation period. Also, “[a] furnisher also cannot advance the delinquency of a consumer that was maintained pursuant to the CARES Act based on the time period covered by the accommodation after the accommodation ends.”

Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved.

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While we all await word of SCOTUS (hopefully) striking down the TCPA in the very near future, I bring word of an interesting case analyzing the definition of the word “system” in the TCPA—an often-overlooked part of the statute’s Sphyxian ATDS formulation.

The case is Panzarella v. Solutions, CIVIL ACTION NO. 18-3735, 2020 U.S. Dist. LEXIS 104746 (E.D. Pa. June 16, 2020) and be careful what you may be hearing about the case from other sources—it is way more important than people are making it out to be. (Just let me go first folks.)

Indeed, Panzarella is a case that almost ended the entire TCPAWorld as we know it (!) and it contains a very important take away for folks trying to manage TCPA risk (which is everyone reading this article). 

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Starting at the beginning, the TCPA governs automated telephone dialing systems, which are defined as “equipment” with the capacity to do… something. The precise functionalities required of an ATDS are the subject of endless debate but do not really play into Panzarella. Rather the issue there is what constitutes a dialing “system” to begin with? Or, perhaps better construed, what is the logical end to integrated components of “equipment” essential to a system placing a call and—if the “equipment” won’t function without those components—how can it be considered dialing equipment at all?

Ship of Theseus anyone?

In Panzerlla the Plaintiff argued that the Plaintiff’s dialer just can’t work without an attached database management system which—for whatever reason—has the ability to randomly generate phone numbers. Since the ability to randomly generate and dial numbers is the Holy Grail of TCPA application, the Plaintiff figures they have a sure thing—the “system” has the capacity to generate numbers and dial them. So, the argument goes, the system is an ATDS subject to the TCPA.

While I hate the argument, it actually isn’t terrible. In fact, it’s pretty good. We’ve seen courts stretch the definition of “system” much farther—for instance to encompass multiple cloud-based dialer domains that operate completely differently merely because they were accessible on a single computer. Eesh.

On the other hand we’ve seen courts refuse to deem a dialer capable of random dialing merely because an excel spreadsheet might be used to generate random numbers and all computers these days have an excel program icon on their desktop.

But Ponzarella’s argument was more than that Defendant’s system can make use of random numbers generated on a program available on the computer, it was that Defendant’s system must make use of a program that itself can separately, but non-essentially, generate such numbers.  So this is a bit of a tweener—this is the first case where a Plaintiff has argued that an essential component of a dialing system can undeniably perform a non-essential but statutorily-identified function: the ability to randomly generate numbers.

Interesting stuff.

The Court didn’t really take the issue head on, however, and elected instead to reject the first premise of Plainiff’s argument—that the database management system was part of the dialing “system” to begin with. And that ruling has big consequences. First, here’s the critical language:

Based on the record presented, the Court finds that the SQL server is distinct from the ININ dialing system.

Since the “system” making the calls—ININ—was distinct from the component that could generate numbers– the SQL server—the “system” could not perform the enumerated ATDS functions.

Cool. But why does the Court conclude SQL isn’t part of ININ if ININ can’t place calls without SQL’s help?

Interestingly the Court’s reasoning is based on the same basic premise underlying ACA Int’l rejection of the old 2015 TCPA Omnibus ruling—it must be so, because any other interpretation would render the application of the TCPA too expansive.

Everyone (hyperbole) uses SQL database technology. SQL serves as the back-end for a huge number of systems of record that, in turn, feed dialers. So if Plaintiff’s argument were accepted every one of those systems would qualify as an ATDS. And that—says the Panzrealla court—would render the TCPA far too expansive and far too broad.

I mean, if that were the case, then the mere storage of numbers in a database to be fed to a dialer to be automatically called would almost always trigger the TCPA. And that can’t be right.

See the trick folks?

My most sophisticated readers are smiling right now (I see you.) The Panzrealla Plaintiff’s argument essentially sought to harmonize Marks with Gadelhak by recognizing that the world’s most oft-used database management system has the ability (for some strange reason) to randomly or sequentially generate numbers. So, in essence, every system that can store (in a database) and dial numbers automatically would become an ATDS under either Marks or Gadelhak. It would have rendered the distinction in statutory ATDS interpretation meaningless as a practical matter and Marks would—in essence—have been the law wherever the argument was accepted.

Yikes.

Well we can thank the Panzrealla court for knocking that train off its TCPAWorld-ending tracks. Please don’t miss the importance of this one folks. If you see a “the-dialer-system-ncludes-the-database” argument keep this case handy!

One other critical take away here—pay attention to this one too—the SQL server was housed on different physical servers from the dialing software servers. Super important to the outcome here.

I know every single tech person out there is rolling their eyes saying “so what?” So this—normal people think that software programs residing in different metal cages are different systems even if they are connected through wires and are really no different than sequestration in virtual server environments in your techie brain. No but seriously—this stuff can make a world of difference and in Panzrella it probably resulted in the Defendant winning summary judgment. Here’s proof:

The database server being housed in separate hardware suggests that it should be considered a distinct system.

Notice that this ruling was made at the summary judgment stage, meaning that the court found–as a matter of law–that no reasonable juror could have concluded SQL was part of this dialing system. Would the court have still reached that conclusion if all the software components were sitting on a single Blade? Hmmmm….

Think of this as social distancing for your software components. (Too soon?) 

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Want to track the trends of TCPA definitions?
The iA Case Law Tracker helps you do that in less time than it takes to pour your morning cup of coffee.

AKRON, Ohio — Debt Sales Partners announced today that its website which initially launched over twenty years ago has been completely updated and is now live at www.debtsales.us.

 “Twenty-years ago our proprietary software drove the first 100% Internet based sale and it was groundbreaking for our industry. Technology has certainly evolved since then and we wanted to make sure we continued to stay ahead of the curve with our updated platform,”  said Debt Sales Partners President and founder, Michael Zoldan.

The website now details the expanded range of services Debt Sales Partners offers the industry. Over the past twenty years Debt Sales Partners or “DSP” has worked directly with buyers and sellers to identify additional needs for the receivables management business.  

After successfully entering the brokerage business, DSP developed a strategy of identifying ways to tailor existing services to each client’s unique needs. “Our complete suite of services is now detailed at our redesigned website making it easier to see what we can do and how we can partner for success,” concluded Zoldan.

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About Debt Sales Partners

Debt Sales Partners based in Akron, Ohio provides brokerage, data scrubbing and many other ancillary services to the Receivables Management industry at www.debtsales.us. The nation’s largest creditors and debt buyers have relied on their technology since 1999.

Yesterday, several consumer advocate groups sued the Consumer Financial Protection Bureau (CFPB) and Director Kathy Kraninger about the CFPB’s Taskforce assigned to review consumer financial laws and provide recommendations for improvement to the Director. According to the consumer advocates—including the National Association of Consumer Advocactes, the United States Public Research Group, and Kathleen Engel, who is a professor at Suffolk University—Taskforce is biased toward the industry. The lawsuit seeks to enjoin the Taskforce from continuing its work, make its records publicly-available, and to set aside its charter.

According to the 52-page complaint:

[D]espite the profound implications of the Taskforce’s work for consumer protections, Defendants have appointed to the Taskforce individuals who uniformly represent industry views. Indeed, the Chairman of the Taskforce, Todd Zywicki, believes that consumer protections are paternalistic, has argued that the CFPB is a “menace” “guarantee[d]” to manifest “bureaucratic pathologies,” and has worked on behalf of several large financial institutions to influence the Bureau and other agencies. All of his fellow Taskforce members have either expressed similar views or continue to work as industry consultants or lawyers.

The complaint notes the Taskforce’s lack of representation from consumer advocates should cause concern, as they will result in biased recommendations:

In the absence of any consumer representation on the Taskforce, and without the legally required public participation and transparency, consumer advocates and consumer finance law experts like Plaintiffs have been unable to participate in or follow along with the Taskforce’s work. These flagrant and ongoing violations continue to injure Plaintiffs and are of great concern, as the Taskforce has already begun working towards producing a final report due in January 2021.

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The consumer advocates argue that the biased composition of the Taskforce violate the Federal Advisory Committee Act (FACA), which, according to the complaint, “is a “sunshine law” designed to prevent special interest groups from exerting undue influence over the Executive Branch by using their membership on advisory committees to promote their private concerns.”

The Taskforce was initially announced back in October 2019, when the CFPB put a call out for applications for experts in the field. The Taskforce members were announced in January 2020, including the announcement that Zywicki would chair the group. In March, the Taskforce requested input through a Request for Information to help focus its mission. 

The U.S. Court of Appeals for the District of Columbia Circuit recently vacated a summary judgment order against a debtor on her claims against a debt owner and its debt collector for alleged violations of the federal Fair Debt Collection Practices Act because the debtor did not suffer a concrete injury-in-fact traceable to the alleged statutory violations and therefore lacked the required Article III standing.

A copy of the opinion in Frank v. Autovest, LLC is available here. 

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In May 2011, a consumer obtained financing to purchase a used car from a dealer.  The dealer immediately assigned its interest in the borrower’s financing agreement to an automobile finance company.  The borrower defaulted on the financing agreement and voluntarily surrendered her car to the finance company.

The debt owner subsequently acquired the debt from the finance company. The debt owner retained a debt collector which sent two letters to the debtor indicating that the debt owner had purchased the debt and requiring that the debtor make all future payments to the debt collector.

The debt collector sued the debtor in the Superior Court for the District of Columbia to collect the debt. The complaint attached a sworn “Verification of Complaint” and the debt collector’s counsel later filed affidavits in support of their fees and costs, including documenting that their fees were contingent upon recovery. The Superior Court initially defaulted the debtor, but later vacated the default after the debtor filed a motion and paid a $20 fee. 

After the debtor retained counsel, the debt collector dismissed its case against the borrower with prejudice.

The debtor then filed a putative class action in federal court against the debt owner and debt collector alleging that the affidavits filed in support of the debt collection suit contained “false, deceptive, or misleading representations” in violation of 15 U.S.C. section 1692e of the FDCPA, that the affidavits were designed to “harass, oppress, or abuse” the debtor in violation of section 1692d, and that this “unfair or unconscionable” debt-collection practice violated the FDCPA under section 1692f.  The debtor also claimed that the debt collector violated all these provisions of the FDCPA “by attempting to collect contractually unauthorized contingency fees.”

The debtor testified at her deposition that she “was being scammed” in the debt collection suit because she had “never heard” of the debt collector.  The debtor admitted that she did not take any action or “refrain from doing anything” because of the affidavits.  She also admitted she did not make any payments to the debt collector because of the affidavits.

The federal trial court granted the debt owner and debt collector’s motions for summary judgment finding that any misstatements in the affidavits were not actionable because they were immaterial and did not affect the borrower’s “ability to respond or to dispute the debt.”

This appeal followed.

Although the trial court did not examine the debtor’s standing, the D.C. Circuit began its analysis by evaluating standing because it has “an independent obligation to assure that standing exists.” Article III requires that a plaintiff have “a concrete and particularized injury-in-fact traceable to the defendant’s conduct and redressable by a favorable judicial order” for standing to exist.  When opposing summary judgment, a “plaintiff must demonstrate standing by affidavit or other evidence.”

Here, the D.C. Circuit held that the debtor failed to meet her burden because she did not “identify a concrete personal injury traceable to the false representations” in the affidavits.  To the contrary, her testimony established “that she neither took nor failed to take any action because of these statements.”  She also did not testify that the affidavits “confused, misled, or harmed” her. 

Although the debtor claimed that the lawsuit stressed and inconvenienced her, the debtor “never connected those general harms to the affidavits,” as required to confer Article III standing on her alleged FDCPA claims.

The D.C. Circuit rejected the debtor’s argument that the “court costs and attorney’s fees” that she incurred in defense of the suit were sufficient to establish standing because “the record contains no evidence linking these expenses to the alleged statutory violations.”

The debtor also argued that she suffered an informational injury sufficient to establish standing because the debt collector and the debt owner denied her “access to truthful information.” To demonstrate a cognizable informational injury a plaintiff must prove that she “1) has been deprived of information that, on her interpretation, a statute requires a third party to disclose, and (2) suffers, by being denied access to that information, the type of harm Congress sought to prevent by requiring disclosure.”

Here, the D.C. Circuit determined that the borrower could not satisfy the second requirement because her testimony established no “detrimental reliance—or any other harm—based on the misrepresentations in the . . . affidavits.”

The debtor also argued that her claims were the type of injuries that Congress “sought to curb” with the FDCPA and that the FDCPA authorizes a private right of action. Thus, the debtor claimed that she did not have to prove “any additional harm.” 

However, as you may recall, in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the Supreme Court made it clear that even for a statutory violation, “Article III standing requires a concrete injury.” Although Congress may identify and elevate an intangible harm, this “does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”  Nowhere does the FDCPA state “that every violation of the provisions implicated here—no matter how immaterial the infraction— creates a cognizable injury.”

The D.C. Circuit held that simply pointing to alleged false statements in the affidavits is  not enough to establish standing because “not all inaccuracies cause harm or present any material risk of harm.” Although a misrepresentation in a debt collector’s affidavit filed in court could cause a borrower to suffer “a concrete and particularized injury,” that was not the case here.  Thus, even if the debt collector and debt owner violated the FDCPA, the borrower lacked Article III standing.

Finally, the D.C. Circuit examined the debtor’s argument that her subjective response to the affidavits was immaterial, because the proper inquiry is the “affidavits’ likely effect on a hypothetical unsophisticated debtor.”

The Court rejected this argument because it confused “standing with the merits.” Although the “unsophisticated consumer (or in some courts, the least sophisticated consumer)” is the correct substantive standard that courts use to evaluate the borrower’s FDCPA claims, this does not relieve a consumer from the threshold requirement “to establish Article III standing—including a concrete and particularized injury-in-fact.” This is because, as broad as Congress’s powers are to “to define and create injuries,” Congress “cannot override constitutional limits.”

Thus, the D.C. Circuit vacated the trial court’s summary judgment order and remanded the case to be dismissed for lack of jurisdiction.

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Want to track trends in industry-related court decisions?
The iA Case Law Tracker helps you do that in less time than it takes to pour your morning cup of coffee.

Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved. 

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Plaintiff Gary Cannioto filed a lawsuit against a defendant debt collection agency, Simon’s Agency, Inc., for “repeatedly placing automated calls to him in an attempt to collect a debt from someone else” in Cannioto v. Simon’s Agency, Case # 19-CV-6686-FPG, 2020 U.S. Dist. LEXIS 95774 (W.D.N.Y. May 29, 2020); the TCPA claim has survived the opinion.  The defendant had moved to dismiss the complaint, and in response, Plaintiff filed a motion to amend the complaint.

[article_ad] Plaintiff’s proposed amended complaint alleges that: his cell phone began ringing and when he answered, he heard a prerecorded message asking to speak with a woman about an unpaid debt. The message then directed him to wait on the line to speak with a representative to let them know whether or not he was indeed the debtor.  Plaintiff waited and told a representative they had the wrong person.  The rep assured him they’d stop calling; yet at least 16 more automated calls were made to him as he reiterated to other representatives the debtor was not him or known to him.

The Court held the plaintiff’s FDCPA claim failed because he didn’t allege certain threshold facts.  As to the remaining TCPA ATDS violation claim, the Defendant argued it was inadequately pled, but the court was not swayed.  Plaintiff’s proposed complaint alleged that a prerecorded message told him to wait to speak with the next available representative.  Furthermore, he claimed that the defendant’s “automated system requested that Plaintiff indicate by pressing specific numbers whether or not he was [the debtor]…and that Defendant’s predictive dialers have the capacity to store or produce telephone numbers to be called, using a random or sequential number generator.”  Therefore, the court held that the “Plaintiff’s claim adequately states a claim for violation of the TCPA.”

At the end of the day, an ATDS can be plausibly inferred at the pleadings stage with allegations of a robotic voice, lack of a human response, and generic content.  Here Plaintiff cleared that threshold, and so the court allowed his claim to proceed.  We’ll keep an eye on this one as it develops.

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Want to track TCPA trends?
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Last month, insideARM published an article about how debt collectors—who, like many others, are currently facing uncertain times due to the COVID-19 pandemic—can fill the country’s need for contact tracers. The Centers for Disease Control (CDC) itself states that contract tracing is a core disease control measure and is a key strategy for preventing further spread of COVID-19. Debt collectors are experienced in contact center work where they deal with people’s sensitive financial information and understand the heightened need for consumer data privacy. However, the COVID-19 contact tracing saga turned into a big mess in Texas (and it is not related to a debt collection agency).

Texas awarded a whopping $295 million contact-tracing contract to a company called MTX Group. The contract called for MTX to hire contact tracers and to build a new contact center to handle the calls. The problems started almost immediately, with concerns being raised about how quickly the contract was granted and questions about the company’s experience in handling such work. Most recently, the Houston Chronicle reported several other concerning allegations: 

• That the CEO of the company falsely claimed to have a Ph.D.;
• That the company mistakenly uploaded some training documents to their workforce that were not supposed to be disseminated, raising concerns of how well-equipped the company is to handle sensitive information; and
• That employees are using their personal computers and email addresses despite dealing with people’s sensitive health data.

Oddly enough, a lot of the issues addressed above could be alleviated using debt collection agencies to do this sensitive, critical work.

• Collection agencies have call centers that are already built and staffed, alleviating the need for building new contact centers or training an entire new workforce.
• Collection agencies are accustomed to dealing with sensitive consumer information and preventing third-party disclosure of such information.
• Collection agencies already work on secure systems which take compliance, data privacy, and data protection into account, largely due to the highly regulated and highly audited nature of the industry.
• While shifting their agents to a work-from-home environment, collection agencies provided company-owned equipment so that agents can work from those secure systems.
• Many collection agencies conduct background checks upon hire of their employees, and certain state regulatory bodies—like Nevada—require a review of information about the company’s officers in order to get the company licensed.
• Collection agencies are experienced in training a call center workforce, especially in pivoting as client requirements, regulations, and laws change—which they do often.
• Collectors do more than just collection debt—they are skilled in customer care and in listening.

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If ever there were an application that is uniquely matched to an industry, this is it. Contact tracing and debt collection require the exact same skills. And many in the industry stand available to be deployed right now. This just requires some pivoting. Reach out to your local health department—they are the ones coordinating the effort.

This article is part of the iA Think Differently series. Written by or recorded with members of the iA Innovation Council, the series showcases thought leadership in analytics, communications, payments, and compliance technology for the accounts receivable management industry.

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Ever since Karel Capek coined the term “robot” in his 1920 play R.U.R., the world has been fascinated by the concept of machines that can perform human tasks. For generations now, Hollywood films, comic books, TV sitcoms and cartoons (who doesn’t remember George Jetson’s maid Rosey?) have featured robots as helpers, heroes, and villains alike.

Real advancement in robotics began after WWII, and by the 1980s, many manual tasks in manufacturing and agriculture had been replaced by robots who could do the job better, faster, and cheaper. For the past thirty-plus years, a multitude of industries has added robotic automation to improve production, efficiency, precision, and to control costs.

Meanwhile, the call center industry has relentlessly remained a business model reliant on human interaction. Sure, IVRs and other interactive tools have been added that allow for greater efficiencies, but they are primarily used for simple tasks and have a limited scope of function. Attempts to teach computers to speak and process human language date back to the 1950s but until recently, computing power was just not significant enough to cross the divide (hat tip to Gordon Moore) to AI-driven natural language conversations.

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In the 1990s, great progress was made in natural language processing (NLP), which allowed computers to analyze and learn massive amounts of natural language data, leading to the introduction of famous ‘bots like Siri, Alexa, Cortana and the aptly named Google Assistant. Today, we can ask Siri for directions, have Alexa tell us the weather, and request a haircut appointment from Assistant.

Chatbots, driven by NLP software, have been used extensively for internet chatting for years and technology has gotten progressively better across all communication mediums, yet advancements in standard IVR technology have been uneven. One of the greatest barriers to conversational IVR adoption is credibility with customers.

It’s virtually impossible to find someone who hasn’t had a bad experience with an IVR when making airline reservations or trying to get information from a bank. We’ve all been infuriated when the limited options provided by the IVR don’t come anywhere near addressing our concerns or reason for the call. And how many times have you hit the zero button or screamed “Operator” or “Agent,” only to be returned to the main menu and have the whole loop start again! Years of these frustrating types of interactions have trained many consumers to just ask for a live person the second they hear a recorded voice. Bad IVR interactions have gone a long way in convincing consumers that their problem is unique and complicated and can only be solved by a fellow human being.

A ‘bot for a collection call center environment makes perfect sense. We all know these truths to be self-evident: human collection agents are, by nature, inconsistent, they spend a preponderance of their day on non-revenue generating tasks, wage increases are being mandated by state legislatures across the US, which further reduces thin margins, and customers do not like to wait on hold and frequently abandon calls.

Now, if someone would just invent a call center ‘bot that can answer all calls, handle non-revenue generating tasks, reduce costs, allow us to provide greater flexibility and service to customers… and won’t frustrate consumers and leave them screaming “Agent” while furiously pounding the zero button! Surely we can do that by now, right?

Turns out, we can.

A number of companies decided that NLP was far enough along that a functional interactive call center agent could be created, trained, and utilized for conversations with customers. Continuous advances in NLP and AI have made this futuristic technology a reality in operation today.

Several organizations market this technology to the call center industry and MRS has created our own Interactive Voice Agent – who we call Adam. We’ve been using “him” since 2018. Post beta testing, Adam has gained traction for us as we rolled him out to a cross-section of our client base.

We saw a fairly progressive adoption of Adam, but 2020 has put him on skates! COVID-19 has introduced a variety of behavioral changes to our country, one of which is time-shifting. Since many of us are confined to our homes, we’ve lost our perspective of work time versus home time. We’ve seen an increase in calls handled by Adam throughout the day, including after-hours, when agents would not likely be available. Having a virtual collection agent that is immune to COVID-19 and works 24/7 has more than a few advantages.

Adam has made a revolutionary impact on our environment. Today, many types of calls such as disputes, fraud, bankruptcy, and deceased notifications no longer are handled by a live agent; they are directed to Adam, who can handle them efficiently. Agents are freed up to conduct more complicated negotiations and generate revenue. Customers in collections seldom have many options but with our digital-focus, we are giving them the opportunity to choose the manner in which they interact with us.

Adam has handled call spikes without abandoned calls and taken payments after hours at a rate that has surprised and delighted us. Since launching in April 2018, in addition to engaging customers regarding Special Handling accounts, Adam has also collected over $5 million. $3 million of that happened in the first four and a half months of 2020, as he handled over 375,000 calls!

Adam is just one example in our industry where a ‘bot is paying dividends and having a real impact on an organization. We are in an age where technology has provided us with immediate satisfaction in many parts of our life. I’m old enough to remember my 14.4 modem and watching my internet feed appear one line at a time. Today, my internet moves faster than I can blink my eyes. The collection industry is no different. We need to satisfy our customers with speed and accuracy or they will go elsewhere. Taking a giant leap like this requires risk, but it’s one worth taking. No giant, transformative change to any industry happens without risk-taking, but done right, the rewards will be substantial and game-changing.

The industry needs to think differently about this technology and understand how critical it is to evolve at the same speed as our society. As we deal with margins being compressed by rising wages and compliance, a Collectorbot is a logical solution for the future of the industry. Our customers are tech-savvy; they want to be serviced on their terms, in their timeframe, and they want it to be efficient, friendly, and quick. Essentially, they want it all and we have to give it to them to survive.

“Hi, I’m Adam with MRS Associates. This call may be monitored and recorded. How can I help you today?”

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[Editor’s note: If you are interested in topics like strategy, testing and scenario planning, you should not miss insideARM’s next conference, iA Strategy & Tech – a completely virtual event – July 21-23. It’s a masterclass in collections strategy.]  

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The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2020 members include:

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ARLINGTON, Va., — Numeracle™, the pioneer of call blocking and labeling visibility in the calling ecosystem, will host a webinar on June 18th at 12 p.m. EST featuring a live panel of industry experts, including leadership from the ATIS/SIP Forum IP-NNI JointTask Force, NetNumber, and Somos.

During this interactive webinar, the panelists will explore, in-depth, the challenge of STIR/SHAKEN attestation for enterprises and what you can do about it, whether you’re an enterprise, service provider, RespOrg, or other communications solution provider.

Panelists include:

• Rebekah Johnson, Founder & CEO, Numeracle
• Chris Wendt, ATIS/SIP Forum IP-NNI JointTask Force Co-Chair; STI-GA Technical Committee Co-Chair; and Director, Comcast
• Mary Retka, Vice President, IndustryRelations and Public Policy, Somos
• Doug Ranalli, Founder, Chief Strategy Officer, NetNumber

Topics include:

• STIR/SHAKEN and the Enterprise
• Delegated Certificates
• KYC (Know Your Customer) and Enterprise Identity in the Calling Ecosystem
• Attestation (Levels A, B, and C) and “Verified Caller” Status

“While the base STIR/SHAKEN framework establishes a chain of trust back to the originating service provider, to reap the full benefits of STIR/SHAKEN, the chain of trust must extend beyond the service provider and back to the enterprise placing the call,” said Rebekah Johnson, Founder and CEO, Numeracle. “With the expertise of our industry panelists, we’ll be diving into this topic from a number of different perspectives to illuminate the challenges and provide recommendations on the solution for VerifiedEnterprise Calls.”

 Who should attend:

• Enterprises who are unclear of what their role in STIR/SHAKEN is, especially those already experiencing challenges with accurate call presentation
• BPOs, hosted cloud service providers, hosted PBXs, Unified Communications providers, Communications Platform as a Service (CPaaS) providers, Contact Centers, or other communications vendors working to ensure clients’ calls are accurately presented and delivered during STIR/SHAKEN
• RespOrgs working to ensure the numbers they provision will be assigned A Level Attestation
• Service  providers working to ensure clients, and their clients’ clients calls are delivered as Verified Calls

This virtual event will take place from 12 p.m. – 1 p.m. EST on Thursday, June 18, 2020. Click here to register for this free webinar or visit https://www.numeracle.com/webinar for more information.

About Numeracle
‍
‍Numeracle is working with telecom carriers, call blocking and labeling analytics providers, device manufacturers, and industry leaders to deliver a path to visibility and control in the new calling ecosystem. Through the company’s technology vision and industry leadership, Numeracle is laying the foundation for returning trust and transparency to customer communications. To learn more about Numeracle’s call blocking and labeling solutions for call originators and call centers, visit www.numeracle.com.