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. 

—

Another day, another tough ruling for a TCPA defendant.

The Ninth Circuit Court of Appeals entered a ruling today aligning with the Seventh and Eleventh Circuit on the issue of the identity of the “called party” for purposes of express consent in the TCPA. The Court held that the caller must have the consent of the subscriber to the phone line called and may not rely on the consent of the intended recipient of the call.

[article_ad]

This is a real set back for callers hoping to make steady use of the express consent defense–it places the risk of wrong number calling on the caller, even where a consumer provides a wrong number or where a number changes hands without the caller’s knowledge.

The ruling does not address whether a caller can rely on the consent of a prior subscriber to a phone line where the number changes hands.

Court also rejects challenge to Marks.

Ruling can be found here: NL v Credit One

—

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

BLOOMINGTON, Minn. — Absolute Resolutions Corp., headquartered in Bloomington, MN, announced today that on behalf of their employees they have made financial contributions to several community groups in the Twin Cities focused on relief efforts and community support. 

“Minneapolis is our home, and the death of George Floyd has impacted so many across the country, but especially in our community. We felt it was of upmost importance to show support to our neighbors during this unprecedented time,” stated Chris Winkler, CEO. “Our hearts go out to the Floyd family and to all the residents and community members of Minneapolis impacted in the wake of his untimely death.” 

Absolute Resolutions Corp. has made contributions to Minneapolis Foundation of Minneapolis, Hamline Midway Coalition of St. Paul and Communities United Against Police Brutality of the Twin Cities. 

“These donations cannot undue the events that have engulfed the Twin Cities during the past week, but we entrust these organizations to ensure that the funds will stay local to help our fellow Minnesotans. As an employer and a member of the community we are committed to a safe work environment, safe neighborhoods, and above all kindness to one another” finished Winkler. 

About Absolute Resolutions Corp.

Absolute Resolutions Corp. is a certified professional receivables company headquartered in Bloomington, MN with offices in San Diego, CA and Scottsdale, AZ.  

About Minneapolis Foundation

One of the first community foundations in the world, The Minneapolis Foundation brings together people, ideas, and resources to improve lives, locally and globally.  

About Hamline Midway Coalition

Hamline Midway is an action-oriented, neighborhood-based organization that develops and supports initiatives in community building, transportation, local foods, placemaking and public space improvement, economic vitality, sustainability, and neighborhood identity. 

About Communities United Against Police Brutality

Communities United Against Police Brutality is a Twin-Cities based organization that works with the community to address excessive force by empowering the community to be agents of change. We provide support for survivors of police brutality and families of victims so they can reclaim their dignity and join the struggle to end police brutality. 

Links in emails and text messages have been a hot topic ever since the Consumer Financial Protection Bureau (CFPB) issued its proposed debt collection rules, which are yet to be finalized. In the meantime, a court analyzed links in an email under the false/deceptive/misleading context of the FDCPA and found that the linked information is part of the collection notice, at least in this particular situation.

[article_ad]

The Facts

In Zuniga v. TrueAccord, No. 18-cv-683 (D. N.M. June 1, 2020), defendant sent a collection notice via email. The notice contained a link to a page that contained three different payment plan options to pay off the full balance of $1,585: three installments of $529, six installments of $265, or nine installments of $177.

The problem occured when the plaintiff whipped out her calculator and realized that each of the payment plan options would add up to slightly more than the balance of the account if you mutliplied the installment payment amount by the number of installments. The differences ranged between $2 and $8 for the three different plans.

That first linked page, however, did not allow plaintiff to enter into one of the installment plans without certain further steps. Specifically, plaintiff had to click on another link related to the payment plan she desired, which would take her to another page that lists further detail about each payment plan. In the second linked page, each payment plan had equal payment installments, and a final payment that was slightly lower so that plaintiff would never pay more than the actual balance.

Plaintiff sued, however, arguing that the email contained false, deceptive and misleading information about the payment plans. Plaintiff mentioned she never intended to accept any of the payment plans because she couldn’t afford them. Regardless, she argued that the communciation would mislead consumers into accepting the shortest payment plan because the total difference between the actual balance and the plan calculated balance was lowest for that one—$2—compared to the longest payment plan—$8.

The Court’s Decision

The court found that plaintiff had standing to bring the case, but ultimately granted summary judgment in favor of defendant.

Regarding standing, defendant argued that plaintiff did not—and could not—suffer any actual harm since its systems are designed to prevent overpayment, and plaintiff never intended to take advantage of any of the payment plans. The court, however, found that the specific sections of the FDCPA mentioned in the complaint confer a substantive right to plaintiff, and thus she had standing to bring the claims.

In reviewing the communciation to determine whether it was false, deceptive, or misleading, the court viewed the communication “as a whole.” Notably, the court considered the linked pages as part of the “whole” communication:

Furthermore, a least sophisticated consumer “is bound to read collection notices in their entirety” and, therefore, would click on the “Choose Option” hyperlinks to fully explore the payment options.

Ultimately, the court found that the email, read as a “whole” was not false, deceptive, or misleading because “the linked pages provide sufficiently clear information that a least sophisticated consumer woul dbe certain of his or her rights.” The court specifically found that just because plaintiff did the calcuations, a least sophistcated consumer would not:

The Court, however, would not expect a least sophisticated consumer to independently calculate those payments and discover, as Plaintiff did, that the payments exceed the balance due.

The court went further by finding that the bona fide error defense applies. The court states:

Specifically, the first linked page does not permit consumers to sign up for any of the installment options presented on that page but, instead, directs interested consumers to click on the “Choose Option” hyperlinks to access pages with complete payment information and sections for entering payment information. Hence, no reasonable jury, viewing the evidence in the light most favorable to Plaintiff, could find that Defendant subjectively intended for consumers to sign up for any of the installment options, as presented, in the first linked page.

. . . 

Even viewing the above evidence in the light most favorable to Plaintiff, no reasonable jury could find that Defendant acted unreasonably or in bad faith by presenting the highest payment in the first linked page when Defendant purposefully included the ‘Choose Option’ hyperlinks in the first linked page and did not provide a payment section in the first linked page.

insideARM Perspective

iA reached out to Kelly Knepper-Stephens, VP of Legal and Compliance at TrueAccord, for her thoughts. Kelly states:

The decision is very important as it is one of the first bona fide error cases evaluating the effectiveness of computer programming and product design. The Court concluded that when a product is programmed and designed to avoid a violation of the statute—here programmed only to permit payment of the exact amount owed—that the bona fide error defense applies and the debt collector is not liable. This is a big win for debt collectors developing and programming online tools for consumers to use.

—

Want to track how the courts are ruling on emails and hyperlinks?
The iA Case Law Tracker helps you do that in less time than it takes to pour your morning cup of coffee.

ST. PETERSBURG, Fla. — PSCU, the nation’s premier payments credit union service organization (CUSO), announced it has entered into an agreement with Telrock to offer its cloud-based collection and recovery software platform, Optimus, to PSCU Owners and other credit unions to improve their overall delinquent account management performance. 

Through this partnership, both PSCU and CU Recovery & The Loan Service Center, a PSCU company, will leverage Telrock’s leading-edge collection and recovery software platform to help credit unions achieve a higher level of efficiency, effectiveness and compliance across all products for both first- and third-party collections.  

“Performing and managing delinquent account activities is becoming increasingly complex and demanding, especially as we navigate the COVID-19 environment and the increased delinquencies we anticipate as a result of the pandemic,” said Steve Balmer, managing vice president of Delinquency Management for PSCU. “With Optimus, we will be in the unique position of having an expanded and enhanced set of collection and recovery capabilities that we will utilize to improve our own results, as well as make the platform easily available to credit unions for use in their own delinquency management efforts.”

Optimus’ key capabilities include a “smart” collector workbench with easy and secure access, embedded digital channel communications and omni-channel management to best align with consumer contact preferences, as well as an integrated self-serve web portal for member do-it-yourself (DIY) collection payment empowerment.

“It is the sum of its parts that enables Optimus to stand out from the outmoded legacy collection and recovery software systems in use today,” said Rob Fite, vice president of Business Development for Telrock. “Optimus was built from the ground up based on modern technology and intelligent design for use in the cloud. The result is a unified platform that provides a broad and powerful set of features and functions that enables the collection of any credit product during any stage of delinquency. With Optimus, PSCU and the credit unions it serves are gaining an unparalleled level of control, agility, flexibility, automation, insight and ease of use, all of which are critical features needed to succeed in today’s highly challenging collections environment.” 

Optimus will be available to Owner and non-Owner credit unions through PSCU and CU Recovery & The Loan Service Center. For more information, contact bdsupport@curecovery.com.

About PSCU

PSCU, the nation’s premier payments CUSO, supports the success of 1,500 credit unions representing more than 3.8 billion transactions annually. Committed to service excellence and focused on innovation, PSCU’s payment processing, risk management, data and analytics, loyalty programs, digital banking, marketing, strategic consulting and mobile platforms help deliver possibilities and seamless member experiences. Comprehensive, 24/7/365 member support is provided by contact centers located throughout the United States. The origin of PSCU’s model is collaboration and scale, and the company has leveraged its influence on behalf of credit unions and their members for more than 40 years. Today, PSCU provides an end-to-end, competitive advantage that enables credit unions to securely grow and meet evolving consumer demands. For more information, visit pscu.com. 

About Telrock

Headquartered in Atlanta, GA, and London, England, Telrock is a global technology provider of SaaS-based software solutions for enterprise-wide collections and recovery, and digital channel customer engagement. Their clients include major banks, other credit providers, and business process-outsource companies in North America and Europe. Telrock’s solutions are SaaS-based; are built on highly scalable modern, open-source technologies; and are deployed in secure PCI-compliant data centers. Visit www.telrock.com to learn more.

Editor’s Note: This article was originally published on the Maurice Wutscher blog and is republished here with permission.

—

The Office of the Comptroller of the Currency (OCC) recently issued its final rule clarifying the “Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred”. The OCC adopted the rule as proposed. A copy of the Federal Register Notice is available at:  Link to Notice.

Effective Date:

The OCC states that its final rule “applies to all national banks and state and federal savings associations and will take effect 60 days after publication in the Federal Register,” which is expected imminently.

[article_ad]

Parallel FDIC Rulemaking:

As we previously reported, in late 2019, the OCC and the Federal Deposit Insurance Corporation (FDIC) both issued proposed rules to “fix” the potential problems arising from the ruling in Madden v. Midland Funding, LLC, 786 F.3d 246 (2nd Cir. 2015), which called into question the “valid when made” doctrine.

The OCC notes that the “FDIC’s proposed regulatory text also would address additional subsequent events, including changes in state law and changes in the relevant commercial paper rate.” On this issue, the OCC states its position that “the result would generally be the same for loans made by OCC-regulated banks.”

DISCUSSION

As you may recall, federal law in part allows national banks and federal savings associations to charge interest at the “most favored lender” rate — i.e., the maximum rate permitted to any state-chartered or licensed lending institution in the state where the bank is located — and authorizes national banks and federal savings associations to make contracts and engage in the business of banking, including making, purchasing, and selling loans.

FDIC-insured state banks generally have parallel rights under other federal law.

However, as we reported in our prior update, the U.S. Court of Appeals for the Second Circuit in Madden essentially held that loans that are completely legal when made by a national bank subsequently become illegal if the national bank sells or assigns them to a non-national bank purchaser or assignee.

According to the Second Circuit, the federal banking laws only preempt state usury laws as long as the loan remains in the hands of a national bank, but not if the loan is subsequently sold or assigned to an entity that is not a national bank or a person collecting interest for a national bank.

This meant that the loan purchaser defendant in the Madden case, which was not a national bank or a person collecting interest for a national bank, violated the federal Fair Debt Collection Practices Act by charging illegal interest on the loans it purchased from national banks.

The Supreme Court of the United States subsequently denied the defendant’s petition for a writ of certiorari in June of 2016. This essentially allowed the Madden ruling to stay in effect.

The OCC states that its final rule “clarifies that when a bank transfers a loan, the interest permissible before the transfer continues to be permissible after the transfer.”

Importantly, in issuing its final rule, the OCC expressly considered — and rejected — several issues raised by various commenters, including:

• “[T]he OCC does not have the authority to issue this regulation”;
• “[T]he OCC’s proposal was subject to, but did not comply with, the substantive and procedural provisions in 12 U.S.C. 25b”; 
• There is no need for the rule, as there is “no evidence that legal uncertainty” under Madden and similar rulings “has had negative effects on banks or markets”;
• “[T]he OCC’s proposal did not comply with the Administrative Procedure Act (APA)”;
• The OCC’s rule “would facilitate predatory lending by promoting rent-a-charter relationships and allowing nonbanks to evade otherwise applicable state law”.

This video 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.

—

Today I’m talking with Louis Summe, CEO of Livevox, a provider of cloud contact center solutions for enterprises. LiveVox makes true omnichannel easy with an out of the box omnichannel platform that enables seamless digital engagement without the traditional integration costs or complexities.

Louis has some great advice for BPO companies that provide call center and collection services for creditors. Spoiler alert – one piece of advice is in the photo below.

[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.]

Transcript

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:

[article_ad]

On Thursday, May 28, Nevada’s governor issued a declaration that outlined “Phase Two” of the state’s COVID-19 reopening guidelines. The declaration lists the “when and how” directions for the reopening of certain types of businesses and community organizations. The declaration also states that any prior directive not expressly discussed in the declaration is extended to June 30—the order stopping collection activities is one of the ones not discussed.

[article_ad]

Nevada’s governor initially provided guidance for the closure of non-essential businesses. On March 20, that guidance became an order. An update notice from the Nevada Department of Business and Industry, Financial Institutions Division clarified that collection agencies are non-essential. 

The Phase 2 declaration allows businesses such as beauty salons, breweries, mini-golf, and gaming/casinos to phase into reopening. 

insideARM Perspective

The new declaration contains several precautions that reopening busineses should take in order to protect their employees and the public. While reopening in Nevada is not yet an option for industry members, it may be an option in other states. This is by no means an exhaustive list, but it does provide a starting point and direction for businesses that are considering reopening. Below is a snip of this guidance:

NEW YORK, N.Y. — CFG Merchant Solutions (“CFGMS”), a leading financier of small and medium-sized enterprises (“SMEs”), announced today that the company is building upon its partnership with Arena Investors, LP (“Arena”), in conjunction with Ceteris Portfolio Services (“Ceteris), an Arena servicing affiliate, in servicing and providing liquidity to Platinum Rapid Funding’s (“PRF”) merchant portfolio.   CFGMS has been a leading capital provider to SMEs and an originator of advances to growing merchants, providing in excess of $400 million merchant cash advances since 2015.  Arena has been CFGMS’s primary capital partner since 2016.   

CFGMS and Arena are determined to prioritize the needs of PRF’s existing customers in the wake of the COVID-19 crises and its resulting impact on small businesses across the country.    

“Arena is pleased to continue its partnership with CFGMS and its senior management team consisting of CEO, Andrew Coon, Chief Legal Officer and General Counsel, Robert Martini, and President, William Gallagher.  Together, we remain deeply committed to serving the needs of PRF’s existing customers, particularly for ongoing financing and liquidity needs in an environment when even much larger businesses struggle to attract capital,” said Victor Dupont, who leads Arena’s investments in the financing of the SME sector.  “We welcome further involvement with PRF’s customers and their affiliated ISOs and are committed to working collaboratively with all throughout the COVID-19 crises and beyond”.  

“Arena and its affiliates have built a reputation as a group that combines uniquely flexible capital with broad-based expertise in servicing, resolutions, and SME finance,” said Coon. “So, while we excel at sourcing, originations, and underwriting, we felt that they brought a critical level of IP and know-how that is uniquely suited to benefit all parties in today’s environment. Combining forces to offer a broader set of servicing solutions to the MCA market segment made complete sense.”

Jonathan Pike, CEO of Ceteris, added:  “Ceteris is excited to work with CFGMS and Arena by offering best-in-class servicing strategies and assisting merchants in a difficult economic environment.”

The Small Business Association (“SBA”) estimates that traditional banks still reject approximately 90 percent of SME loan applications. Since 2015, CFGMS has emerged as a proven platform that leverages sales partner relationships, analytics, and proprietary underwriting to provide SMEs with a straightforward and streamlined access to critical funding.  The company addresses the fundamental capital needs of SME owners across a broad credit spectrum and through every stage of a business’s life cycle.

SMEs across a wide variety of industries that include restaurants, retail stores, salons, spas, dry cleaners, auto body shops, and professional offices. All of these businesses, and more,  rely on CFGMS to secure the necessary capital they need to grow.

For questions or funding solutions, please contact: 

• William Gallagher 
•  (646) 880-3817
• WGallagher@CFGMS.com
• Ryan Banda 
• (856) 545-8322
• rbanda@ceterisassetsolutions.com  

About CFGMS

Headquartered in New York, N.Y., CFGMS specializes in providing financing to support the growth and development of underserved small-to-medium sized businesses that lack access to traditional bank funding.  Founded in 2010, CFGMS’s affiliated company, CapFlow Funding Group, provides factoring, purchase order finance, and asset-based lending solutions. CFGMS and CapFlow have together provided over $1 billion in liquidity solutions to their SME clients. For more information please visit www.cfgmerchantsolutions.com

About Arena Investors, LP

Arena Investors is a privately held, SEC-registered, global alternative investment firm which combines mandate flexibility, proprietary sourcing and systems-plus-servicing to enable solutions for those seeking capital.  The firm was founded in 2015 and is headquartered in New York with additional offices in Jacksonville, London, and San Francisco.  For more information, please visit www.arenaco.com.

About Ceteris Portfolio Services

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.

EDMONTON, Alberta — When you think of a debt collection agency, the first word that comes to mind is possibly not “friendly.”

But friendly is exactly the vibe MetCredit is going for with its entirely new look and feel.

The national collection agency, founded in 1973, has always done things differently, says President and CEO Brian Summerfelt. And with the dramatic impact of COVID-19 transforming the business landscape, it was time to put forward a face that projects MetCredit’s helpful, enthusiastic approach to receivables management. 

[article_ad]

“We’ve always been a people business,” says Mr Summerfelt. “The new look captures the proactive, think-outside-the-box professionalism and innovation you see daily in our offices across Canada. It stirs the feeling of moving people forward in a remarkably positive and empowering way.”

MetCredit has rolled out a bold new logo with an “M” icon that hearkens to the days when the brand was known as Metropolitan Credit Adjusters, conjuring a pair of dimensional high-rise towers with an elegant maple leaf unfurling from the negative space between them—this is a national agency, after all. The font is bold, modern and confident: it’s a stylistic nod to the big banks and telecommunication leaders who have long been key clients, without forsaking the thousands of start-ups, small businesses and midsized organizations MetCredit serves, in communities from coast to coast, to the northernmost reaches of Canada.

Where the friendliness really comes to life, though, is in the website and branded materials. Everything is built upon a set of playful 3D characters, styled to reflect the varied dimensionality of collecting debt across a vast and varied country.

The new MetCredit.com homepage features a bearded entrepreneur in a business suit and helmet—stopping a puck at the front of a hockey net. “Canada’s All-Star Collection Agency,” proclaims the copy. 

Gracing the BC page is a businessman sporting green-tinted shades. Alberta’s mascot dons a cowboy hat, and Saskatchewan’s a watermelon helmet, a tribute to a tradition celebrating the province’s CFL football team. The stereotypes are intentional, at once playful and a little campy, Mr. Summerfelt says.

“We wanted to show that we deeply love and ‘get’ Canadians, because as a nationwide team we live the differences from one region to another,” he says. “I was born and grew up in Saskatchewan, so to me the watermelon is not a stereotype. It’s an emblem of regional pride. These are the diverse places our employees and customers live, work and play. I think it all comes across with an authenticity no one else could pull off, just like how we collect. We first connect.”

The completely re-imagined website includes a French version for Canada’s Francophone businesses, and includes MyMetCredit.com, a unique AI-powered web application that assists clients in submitting accounts for collection easily and comprehensively, at any time.

“This is a new era, when businesses in Canada and around the world are going through a painful, unprecedented reset,” Mr. Summerfelt says. “It’s important not to take ourselves too seriously, to reconnect with why we are all in this business—to make some very bold changes and lead with marked conviction into the new reality. That is what our rebrand embodies.”

For more information, please visit MetCredit.com, contact media@graphos.ca or @metcredit.

This video 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.

—

Today I’m talking with Andy Shumway, President and Lex Patterson, VP Sales of DAKCS, an Ogden, Utah-based technology company (owned by Beyond Investments) that supports collections and accounts receivable management. They create highly configurable, innovative cloud and on-premise debt collection software solutions for medical and healthcare, financial services, law firms, government, and first-party accounts receivable.

We talked about how their clients are moving from a phase of mitigating risk to planning for the future, and what that future will look like.

[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.]

Transcript

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:

[article_ad]