This article is part of the iA Think Differently series. Written by 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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There’s no shortage of consumers and companies rocked by COVID-19. The speed and degree with which this has touched every entity in our country are unlike anything any of us have ever seen. Although this period has been filled with moments of sadness, loss, fear, confusion, uncertainty, and anxiety, many companies have led the charge to make sure their employees and customers are cared for by finding ways to adapt and thrive despite these unforeseen circumstances.

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The Big Picture

In collections and recovery, we are no strangers to helping consumers when they’re going through difficult times. However, this cycle is different. The sheer volume of consumers that will suddenly be faced with short and long term unemployment is staggering. TransUnion recently published in their COVID-19 Pandemic’s Financial Impact on U.S. Consumers report that 61% of consumers surveyed indicated their household income has been impacted. The report also says that the hardest-hit states in the West are California (68%), Washington (70%) and Nevada (77%). In the Northeast, New York comes in at 67% and notably, in the south, Louisianna is an outlier at 71%. Of these, 8% believe this will impact them in the future and 14% are unsure what the future holds.

Short and Long Term Impacts

Taking this data into account, many collection leaders are re-forecasting delinquency and losses in a world of firsts and with a lot of unanswered questions. How long will jobs be affected in the short-term? How many will be affected indefinitely due to companies’ inability to survive or remain viable during this time? TransUnion reports that 66% of consumers are concerned about their ability to pay current bills, with the highest concern being their ability to repay credit cards, utilities, mortgage payments (this percentage is higher for those with children) and rent.

The Industry Response

As many of us know, when delinquency and losses rise, especially at this speed and to this degree, companies have to make significant strategic decisions. Based on conversations with leaders and a look at various forecasts, I predict the first light wave of delinquent and impacted customers will flow through to charge-off beginning in September. This is significant because you will have pandemic-related delinquency in every single bucket, on top of the pre-COVID-19 delinquency that already existed and has likely only gotten riskier.  Companies will need to take immediate action to be prepared for when peak pre and post-charge-off delinquency levels hit the system. Here’s what I anticipate to be the top collection strategy priorities for the remainder of the year:

Immediate Considerations

A whitepaper recently published by the team at Boston Consulting Group and 2nd Order Solutions offers several solid suggestions and considerations for the immediate term: reallocate any underutilized staff, prepare for the reality of reduced outbound calling, clarify roles — especially among decision-makers — to ensure quicker deployment of desired changes, increase non-phone outreach (letters, SMS, etc.), and proactively design offers to help consumers through the immediate decline in their ability to pay.

Long Term Considerations

Many collection strategy execs are hustling through an exercise to size increased delinquency, re-forecast expenses and do their best at estimating future losses. While all leaders are trying to figure out the impacts, conscientious leaders are also working on the other side of the equation and determining how to offset all of those impacts. After all, that’s what collection strategy professionals get paid to do. 

After companies have pulled out all of the stops to help customers, it will be time to buckle down and design the plan for what’s to come. I break this down into three categories 1) capacity 2) expense reduction (to offset the increased delinquency costs) and 3) loss mitigation.

Capacity 

After forecasting the future demand, a solid and well-thought-out capacity plan will be essential. Considerations need to include the future insource/outsource allocations, as well as the viability of other traditional post-charge-off streams; debt sales (lower price due to higher available volume), legal referral, internal and agency. Any companies that haven’t outsourced before should seriously consider this as part of their ongoing strategy. As with every delinquency bubble, there will be an initial first-party peak starting anywhere from July – September (depending on loan terms) and lasting for the unforeseeable future. After that, we’ll slowly start to see a decline as consumers purge through (brace yourselves third party). Flexibility in staffing will be the most cost-effective and streamlined way to adjust month to month. 

Expense/Loss Mitigation

Increasing staff due to higher demands will inevitability increase the cost to collect. The smartest way to offset this increased need in staffing is to look for ways to fully deploy any and all self-service options available to you.

1. SMS and Email – If you haven’t already done so, you should accelerate the adoption of SMS and email. They are easy to stand-up and well-tested in the industry.
2. Self-Service Web Portal – In an environment where consumer education and the need to reduce capacity demands are top priority, a self-service web portal is a no-brainer. It can serve as a centralized place to educate consumers on their options, as well as help them to guide themselves through negotiations; payments, payment plans, settlements, etc. This will significantly streamline the process for consumers and will help alleviate some of the capacity constraints and expenses for lenders. When sourcing a solution, finding one that allows for the greatest amount of customization is your best bet. You’ll want the flexibility to modify the decision engine and models behind the portal as frequently as you need to given the uncertainty surrounding this ever-changing crisis. 
3. Virtual agents should come to the forefront. This technology has been tested throughout the industry and I believe COVID-19 will be a catalyst for further adoption. 

Conclusion

This will be a long and challenging time for many consumers. But we’re built for this and are best positioned to help them as they navigate this unknown territory. Many for the first time. This is a starting, high-level list based on what we know now, but the number of solutions and levers is unlimited and will be ever-changing and evolving as we learn more. While I’ve cited some solutions requiring initial investment, I’m confident 1) the right solutions will pay you back and 2) there are a lot of levers that do not require an investment that can be pulled immediately. We’ll talk about those and others as we work to keep you informed.

Want to learn more?

Join me on the first of our new Webinar Series: Leading Strategically Through the Recovery: The Industry Outlook, TOMORROW, April 22nd at 1 PM EDT, sponsored by LiveVox.  

Then plan to attend our upcoming iAST – Strategy and Tech Digital Conference July 21st – 23rd.

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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:

Editor’s Note: This article was originally published on Messer Strickler’s blog and is republished here with permission.

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Many business owners have incurred, and will continue to incur, substantial financial losses as a result of the COVID-19 pandemic. Because these losses may be covered by commercial business insurance policies we have been assisting our clients by reviewing their policies and making claims for coverage.  Not surprisingly, insurance companies are quick to provide coverage for COVID-19 related losses.  This, however, should not deter you from pursuing coverage in appropriate cases.  We are glad to assist you in determining whether your business insurance policy provides coverage and making a claim if appropriate.

Lawsuits are already being filed regarding COVID-19 insurance coverage.  One lawsuit which we are following, Big Onion Tavern Group, LLC et al. v. Society Insurance, Inc. is particularly instructive. This lawsuit was filed in the U.S. District Court for the Northern District of Illinois on March 27, 2020. 

The Big Onion Shutdown & Insurance Claim

Big Onion Tavern Group, LLC (“Big Onion”) operates several Chicago area restaurants.  After Illinois Governor Pritzker issued Executive Orders closing restaurants and all “non-essential” businesses in an effort to stop the spread of the coronavirus (the “Closure Orders”) Big Onion and its restaurants made claims for business interruption coverage under their Commercial Business Owners Insurance Policies issued by  Society Insurance, Inc. (“Society”).  

According to Big Onion, even before it could make these claims Society’s CEO had issued a memorandum to its agents stating that Society’s “…policies would likely not provide coverage for losses due to a ‘governmental imposed shutdown due to COVID-19 (coronavirus)’.”  Society thereafter denied the Big Onion claims on the grounds that the losses were not covered because “…the ‘actual or alleged presence of the coronavirus,’ which led to the Closure Orders that prohibited Plaintiffs from operating their businesses, does not constitute ‘direct physical loss’.” 

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Big Onion Sues for Insurance Coverage

Quickly thereafter Big Onion and its restaurants filed a Complaint for declaratory judgment, indemnification, breach of contract and bad faith denial of coverage in the U.S. District Court for the Northern District of Illinois.  In its Complaint, Big Onion argues that the  Commercial Business Owners Insurance Polices provide coverage for losses incurred due to a “necessary suspension” of their operations, including when their businesses are forced to close due to government orders, such as the Closure Orders.  Big Onion argues that Society’s denial of the claims is contrary to the law because “Illinois courts have consistently held that the presence of a dangerous substance in a property constitutes ‘physical loss or damage’.”

Claim for Loss of Business Income Coverage

In its Complaint, Big Onion argues that pursuant to its Policies Society “…agreed to ‘pay for the actual loss of Business Income’ sustained by Plaintiffs ‘due to the necessary suspension’ of Plaintiffs’ operations during the period of business interruption caused ‘by direct physical loss or damage to covered property’ at the insureds premises.”  Big Onion claims that “[w]ith respect to business interruption losses, ‘suspension’ means (1) ‘the partial slowdown or complete cessation of your business activities’; or (2) ‘that part or all of the described premises is rendered untenantable if coverage for Business Income applies.’” Big Onion further claims that Society “…also promised to ‘pay necessary Extra Expense’ Plaintiffs incur during the period of interruption that they ‘would not have incurred if there had been no direct physical loss or damage to covered property at the described premises.”  In this connection Big Onion claims that “[t]he continuous presence of the coronavirus on or around Plaintiffs premises has rendered the premises unsafe and unfit for their intended use and therefore caused physical property damage or loss under the Policies.”  

Big Onion further argues that its Policies, unlike many other commercial policies, do not include an exclusion for loss caused by viruses. Big Onion argues that the existence of such exclusions in policies indicates that when policies such as theirs don’t include such exclusions that coverage should be provided.  The logical conclusion here is that “… if a virus could never result in a ‘physical loss’ to property, there would be no need for such an exclusion.”   

Claim for Civil Authority Coverage

Big Onion also claims that the “Civil Authority” coverage provision in the Polices provide coverage.  Specifically, Big Onion claims that through its Policies Society had “…promised to provide coverage for losses incurred due to government actions ‘taken in response to dangerous physical conditions,’ even if those dangerous physical conditions cause damage to property at locations other than those insured under the policies.”  Big Onion claims: “Civil Authority coverage is triggered when any non-excluded cause results in ‘damage to property other than property’ at the Plaintiffs’ premises and is intended to cover losses resulting from governmental actions ‘taken in response to dangerous physical conditions.’” 

Here Big Onion claims it is entitled to coverage because the March 15, 2020 Closure Order was issued by Governor Pritzker “… in direct response to these dangerous physical conditions, and prohibited the public from accessing Plaintiffs’ restaurants, thereby causing the necessary suspension of their operations and triggering the Civil Authority coverage under the Policies.” Similarly, Big Onion argues that the March 20, 2020 Closure Order triggered Civil Authority coverage by closing  “non-essential” businesses in Illinois including restaurants “…in direct response to the continued and increasing presence of the coronavirus on property or around plaintiffs’ premises.”  

Big Onion’s Claim for Bad Faith Claims Handling 

Finally, Big Onion asserts a claim against Society for bad faith denial of coverage under the Illinois Insurance Code.  Big Onion claims that Society acted in bad faith by denying the insurance claims immediately upon receipt, without conducting any investigation, “…let alone a ‘reasonable investigation based on all available information’ as required under Illinois law. See 215 ILCS 5/154.6.”  Big Onion claims that this as well as Society’s “…failure to provide reasonable and accurate explanations of the bases in its denials” constitute “improper claims practices” under the Insurance Code.  Accordingly, Big Onion is seeking damages and its attorneys’ fees and costs incurred in prosecuting its claim for coverage pursuant to the Insurance Code under 215 ILCS 5/155.

Conclusion 

If your business has incurred substantial financial losses as a result of the COVID-19 pandemic and you have a business insurance policy you should determine whether you have coverage for those losses.  Don’t be dissuaded if your agent tells you there is no coverage. As was the case with Society, your agent may have been instructed to turn you away at the gate.  But like Big Onion, you have several facially credible arguments for coverage  It is always best to understand your policy and know your arguments for coverage before making a claim.  This helps you avoid rejection by insurers which practice the “three D’s of insurance companies; Deny, Delay and Defend.”  

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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Adding an arbitration clause to previously-agreed upon terms and conditions (Ts and Cs) does not automatically ensure that a subsequent TCPA dispute is arbitral – at least under New York law. It all depends – of course – on the facts.

In Engen v. Grocery Delivery E Services USA Inc., 2020 U.S. Dist. LEXIS 63658, Case No. 19-cv-2433 (ECT/TNL), United States District Court for the District of Minnesota, decided April 10, 2020, Amanda Engen opened an account online with Grocery Delivery EServices USA Inc. (HelloFresh) and clicked a box next to the phrase, “I accept the terms and conditions and I have read the privacy policy.”

The words “terms and conditions” were hyperlinked to the then-effective Ts and Cs (as of January 21, 2017), including the right of HelloFresh “to revise and amend… [them] from time to time to reflect changes in market conditions affecting our business, changes in technology, changes in payment methods, changes in relevant laws and regulatory requirements and changes in our system’s capabilities.”

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The language went on to state that Mrs. Engen would be subject to “the policies and terms and conditions in force at the time that you order Products from us, unless any change to those policies or these terms and conditions is required to be made by law or governmental authority (in which case it will apply to orders previously placed by you), or if we notify you of the change to those policies or these terms and conditions before we send you the Confirmation (in which case we have the right to assume that you have accepted the change to the terms and conditions, unless you notify us to the contrary within seven working days of receipt by you of the Products).”

After agreeing, Mrs. Engen placed an order for a meal kit, but after receiving the product, she purportedly “deactivated” her account. Thereafter, in February of 2017, HelloFresh added an arbitration clause to the Ts and Cs, which was amended in June 2018 to include a class action waiver provision.

Two years after her original order, in January of 2019, the plaintiff logged on to her account, “reactivated” her meal kit subscription and placed an order, which she cancelled the same day. HelloFresh then called her several times allegedly trying to get her to “re-subscribe and purchase meal kits.” As a result of those calls, Mrs. Engen’s TCPA class action lawsuit ensued.

HelloFresh moved to compel arbitration, arguing that under the original Ts and Cs it had properly added the arbitration clause, that promotional emails it had sent thereafter and before Mrs. Engen reactivated her account provided “‘actual, or at least constructive notice’” of the new terms and that she had agreed to those Ts and Cs (including the arbitration clause) “by reactivating her subscription and placing the meal-kit subscription order” in January 2019. Thus, she had agreed to arbitrate disputes. Mrs. Engen asserted she had no notice and never agreed to the revised Ts and Cs, including the arbitration clause.

In the final analysis, District Judge Eric C. Tostrud sided with Mrs. Engen. Applying New York contract law, as provided under the Ts and Cs, the Court blessed the HelloFresh addition of the arbitration clause but would go no further.

As to those HelloFresh emails that ostensibly provided Mrs. Engen actual or at least constructive notice, the Court noted they were not sent to notify Mrs. Engen of the modifications to the Ts and Cs and do not even mention such changes. True, there was a single sentence with a “Terms of Use” hyperlink in each email, but “it is not clear and conspicuous. It is ‘buried at the bottom of the page’ where a recipient is not likely to see it and less likely to understand its significance.” The Court parried HelloFresh’s reliance on other cases where the purpose of the “email…was to notify customers of the revised terms of service…and mentioned the addition of an arbitration clause explicitly, and … described how a customer’s continued use would bind him to the revised terms.” Here that was not the case.

As for the January 2019 website visit, Judge Tostrud noted that “HelloFresh acknowledges that Mrs. Engen’s January 6, 2019 visit to its website cannot alone show that she had notice of or assented to the 2018 Terms and Conditions. This makes sense. As far as the record shows, that visit did not require Mrs. Engen to affirmatively acknowledge HelloFresh’s Terms and Conditions through a clickwrap or similar feature, and no record evidence suggests that the visit placed her on inquiry notice of the revised Terms and Conditions.”

TCPAWorld lesson learned? – under New York law, at least, obtain affirmative acknowledgment of arbitration or other claim-related modifications to previously-agreed upon Ts and Cs as the best way to avoid the fate of HelloFresh here.

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Want to be the first to learn about and track trends on industry-impacting issues like this? The iA Case Law Tracker can help you do that in less time than it takes to pour your morning cup of coffee.

SUNNYVALE, Calif. — Nearly 22 million have Americans lost their jobs over a few short weeks due to the coronavirus pandemic. Record-high unemployment numbers pose unique challenges for collections agents as borrowers find it increasingly difficult to repay their debt.

Prodigal’s Natural Language Engine identified a surge in consumer stress beginning March 15 amidst the pandemic, with borrowers expressing fears about both their health (particularly among elderly borrowers) as well as loss of employment or a reduction in hours. Prodigal was able to automatically identify these trends due to its scale of anonymized speech data aggregation across multiple customers.

Prodigal’s smart reports were shared with all clients for free within two weeks of the announcement of enforceable shutdown orders. All agencies and lenders receiving reports with domain-specific trends on borrower behavior benefited from Prodigal’s economies of scale and Unifin was able to react swiftly to address the evolving situation. 

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Unifin prides itself on its initiatives of supporting, assisting and educating borrowers throughout the debt repayment process. All agents are highly trained to engage and collaborate over the phone. However, some agents had inadvertently failed to acknowledge the stressful situation borrowers might be in and thus did not show the requisite level of empathy. Agents are typically primed to collect debt as quickly as possible but Unifin wanted to encourage a different behavior in response to the current situation. “Unifin has a very thorough and graded coaching program for agents.  They were not only early to empathize with the situation the borrowers were in but also swift in incorporating the right response to the crisis” said Shantanu Gangal, Prodigal CEO.

At Unifin, any sort of aggressive behavior by agents to collect from borrowers constitutes a high-level infraction. Unifin was particularly interested in identifying violations from among thousands of daily calls in order to proactively educate collectors on increasing empathy towards borrowers during these troubled times. Prodigal provided Unifin with a quick mechanism to identify agents violating the moral code of conduct established during the pandemic. 

“Prodigal has time and again demonstrated its deep understanding of the ARM industry and their 40+ domain-specific tags were a powerful tool to slice and dice infractions by our agents,” said Clint Daoud, Unifin EVP. Prodigal independently flagged all conversations of this nature and made the trends prominently visible on its interface, simplifying the process of identifying agents who were repeat offenders or in need of coaching.

Thanks to Prodigal’s input, Unifin was able to incentivize recommended behaviors among its agents by swiftly identifying dozens of calls where agents had shown great consideration. Prodigal’s data also enabled Unifin to identify agents who had committed severe infractions so they could be guided to improve. By partnering with Prodigal, Unifin has been ahead of the curve in responding to an unprecedented ongoing macroeconomic situation.

Further analysis of the trends observed by Prodigal can be found in this whitepaper. 

About Prodigal

Prodigal’s machine learning-driven speech intelligence software empowers ARM executives with actionable insights on 100% of the calls towards higher revenue and lower compliance risk. For further information about Prodigal products, feel free to reach out to shantanu@prodigaltech.com or (650) 802-7795.

About Unifin

Unifin, Inc. is a full service BPO and Accounts Receivable Management firm licensed and bonded nationally. For additional information about Unifin’s services, Inc. please contact sales@unifinrs.com or (847)-787-1980.

CAMAS, Wash. — The Intelitech Group, a leading consulting and business analytics provider in the Accounts Recovery industry, has begun offering their Collector Training solution, StackUp™, to recovery organizations through the end of June 2020 to assist with COVID-19 related issued.  StackUp has been modified to address many of the problems agencies are dealing with as a result of the pandemic.

“We’ve been receiving a good amount of feedback from recovery organizations with the struggles they are going through and wanted to help.” Said Bryan Houston, Managing Partner at The Intelitech Group. “StackUp seemed like a good fit of something we could offer to help with COVID-19 as it’s already setup for training.” Continued Houston.

StackUp is Intelitech’s latest training solution that utilizes gamification providing an enjoyable way for collectors to be educated on topics like industry changes, communications, compliance, as well as industry regulations such as HIPAA, TCPA, FDCPA, GBLA and additional CFPB topics.

In order to receive the offer, organizations will need to insert a promotional code during the setup process, which is available on Intelitech’s StackUp landing page.

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About the Intelitech Group

The Intelitech Group™, a pioneer in delivering account scoring and segmentation to the ARM industry since 1999, provides consulting and technology solutions to help agencies work smarter to achieve optimal results. Leveraging industry expertise and market intelligence with machine-learning, The Intelitech Group brings extensive knowledge, insights and practical tools to help agencies delve deep into all facets of the organization to measure, analyze and implement results-oriented solutions. For additional information, visit www.intelitechgroup.com.

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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As I have recently remarked, the TCPA is the biggest cash cow in the history of American class action practice.

Apropos: Friday a court entered an order approving an attorney fee request of $89,116,333.33 in favor of a group of TCPA plaintiff lawyers that successfully pursued a certified TCPA class action to trial against a collector.

Now that’s a payday. Think it’ll encourage more TCPA suits?

The case–Perez v. Rash Curtis & Assocs., Case No. 4:16-cv-03396-YGR, 2020 U.S. Dist. LEXIS 68161, (N.D. Cal. April 17, 2020)–resulted in a $267MM verdict against the collector related to dialer calls to cell phones obtained via skip tracing. We covered the case last year.

Notably, the Court refused to apply the Golan line of cases–authorizing the reduction of TCPA awards in certified class actions on constitutional grounds–and held that there was no objective way to reduce the award.  The Court does note, however, that at some point the judgment becomes uncollectable and “[TCPA] cases such as these plead for settlement.”

This case calls out for further in-depth analysis. More to come TCPAWorld.

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Want to be the first to learn about and track trends on industry-impacting issues like this? The iA Case Law Tracker can help you do that in less time than it takes to pour your morning cup of coffee.

This article is part of the iA Think Differently series. Written by 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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I know that many collection agencies are scrambling to keep up with the changing state rules and client decisions about who is considered essential, whether agents can work remotely, and whether/under what circumstances you can engage in proactive outbound collection efforts. I have heard from numerous CEOs who say their main priority right now is keeping as many people employed as possible, for as long as possible.

I also know that so many public and private organizations are struggling to keep up with the increased volume of phone calls from consumers who need loans processed, unemployment claims processed, account information, public health information, or any number of other types of help.

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The collection industry has thousands of trained call center agents, many of whom are now set up to work from home, who are idle or soon may become idle because they are not allowed to engage in collection efforts. 

In addition to the roller coaster of changing rules I already mentioned, Members of Congress have proposed bills that, if passed, would put limitations on collection efforts for months following a declared disaster. 

Are you taking the time to think differently about the types of services you could provide and who your clients could be?

Could your agents be trained to take those overflow unemployment calls? Could they answer questions for local hospitals or health departments? Could they help with overflow calls from your local utility company? Could they take calls for the federal government? The IRS? The CDC? Do you know what else is going to be needed a lot in the coming weeks/months? Contact tracers. 

Professional collection agencies have a workforce of employees uniquely trained in matters of privacy, patience, empathy, and complex problem-solving. You are uniquely qualified to pivot in this chaotic time to provide a service that others can’t. If you haven’t done so already, I’d suggest giving this some serious consideration.

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Stephanie Eidelman is the CEO of insideARM and The iA Institute and leads the iA Innovation Council.

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:

Editor’s Note: For all related insideARM articles and other information, please check insideARM’s COVID-19 Impact resources page.

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Below is a quick roundup of updated state guidance regarding COVID-19 regulations and executive orders.

New York and Maryland
Requiring face masks for employees.

New York issued an executive order that requires employers who are still operating as essential businesses to provide protective face coverings for their employees who are present in the workplace amid the emergency. The coverings are to be provided at the employer’s expense. New York’s executive order is here. 

Maryland issued a similar executive order, except the Maryland order seems to be limited in scope to retail establishments. The order’s definition of “retail establishment” seems to be limited to businesses that are physically customer-facing.

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Oregon
Prohibiting the garnishment of stimulus checks.

The new trend in town is regulators blocking CARES Act stimulus checks from involuntary collections, such as garnishments and attachments. Massachusetts’ Attorney General issued such guidance last week, and it seems that the domino effect is beginning. Oregon has now issued an executive order forbidding the garnishment of stimulus check money.

The executive order states that during the pendency of the COVID-19 emergency period, financial institutions that receive deposits of stimulus money must treat such money “in the same manner as federal benefit payments” unless the garnishment states that it is an award of restitution for a civil judgment based on a criminal offense. 

The order goes into effect immediately, and Oregon’s Attorney General and Department of Justice are to provide further guidance regarding these directives.

New Jersey
Tightening restrictions on open essential businesses.

New Jersey’s governor issued a new executive order on April 10 that places tighter restrictions on businesses that remain open as essential businesses. While many of the restrictions apply to retail and construction businesses, there is a section (section 5) that discusses the obligations of owners of buildings used for essential businesses, such as office parks and residential buildings. The requirements include frequent cleaning and disinfecting high-touch areas on top of maintaining normal cleaning procedures, and ensuring that the facility has sufficient workers to perform cleaning protocol.

Washington State
Prohibiting evictions and foreclosures.

On April 16, Washingon’s governor extended the state’s prohibitions against evictions and other measures—it now goes through June 4, 2020. The extension also issues strict prohibitions for landlords, property owners, and property managers, including the prohibition of treating unpaid rent as an enforceable debt that is collectible where the non-payment was a result of COVID-19. Other prohibitions include issuing notices to vacate, seeking evictions, and assessing late fees or other charges for non-payments or late payments.

ANN ARBOR, Mich. — HealPay, a leading payment solutions provider, announced today a 90-day trial offer to firms currently experiencing difficulties during the outbreak of COVID-19. The offer includes access to HealPay’s standard Portal and IVR payment software. Both solutions are agentless/self-service, require no additional hardware, and are compliant with the FDCPA and other industry regulations.

“Countless businesses are suddenly required to work remotely for an unknown period of time,” says Co-Founder and CEO, Erick Bzovi. “Our technology allows collections firms and billers to communicate with and provide payment access to clients and consumers quickly, easily, and remotely.”

HealPay’s online and phone payment software provides 24/7 convenient access with the ability to make a payment by credit card, debit card, or ACH. Organizations in accounts receivables, consumer finance, healthcare, and charitable and religious organizations industries are able to offer customers a convenient payment experience while being compliant with the latest industry regulations.

Businesses can visit HealPay.com/Trial to learn more about the trial offer and get started.

About HealPay  

HealPay provides innovative, consumer-centric payment solutions to businesses nationwide. Attorneys, collections, receivables, charitable organizations, property managers, finance companies, and other types of billers rely on our solutions to accept multiple payment types online and over the phone with or without a human agent. 

Editor’s Note: This article previously appeared on the Ontario Systems Blog and is republished here with permission.

The insideARM COVID-19 Impact resources page contains all of the latest news as well as official state notices and other information to help your company navigate these uncertain waters. 

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State responses to the COVID-19 pandemic are changing fast. For all of us, it’s a very uncertain time. Now that unemployment claims have topped 6.65 million, governments are trying to lessen the financial pain for consumers already struggling to pay their debts. In many cases, the impact on third-party collection agencies has been severe.

What should you be doing to keep calm, carry on, and manage risk in these unprecedented times?

Earlier this week, I sat down with two of my Ontario Systems colleagues—Compliance Consultant Director Sara Woggerman and Senior Director of Product Engineering and Product Management Dan Womack— for our first weekly COVID-19 crisis management webinar, “Understanding ‘Inconvenient Time’ and State Restrictions During This Most Inconvenient Time.” We discussed what ARM businesses need to consider and do to successfully navigate the new legal landscape in the age of COVID-19. (You can access the full webinar recording here.)

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State Stay-at-Home Orders: How to Operate Responsibly

State stay-at-home orders have caused enormous disruption for many ARM agencies. Our goal is to help you weather the storm by keeping you informed so you can adapt to changing circumstances in compliance with state and federal mandates.

Before we discuss how you might approach collections in the COVID-19 era, let’s talk about the operational adjustments you’ll need to make in the days and weeks ahead.

Determine whether you’re an essential business

Review the definition of financial services or financial affiliates under your state’s definition. Some states are changing their definitions after issuing a stay-at-home order or within the order itself. In the case of commercial debt, you’ll want to review the definitions of the debt and debt collector under state laws.

Identify any remote work requirements or barriers

Certain states prohibit remote collections entirely. Others allow it but impose additional requirements. Some states have temporarily waived branch licensing requirements. If you’re looking for real-time updates, Cornerstone Support’s Coronavirus guidance (for both employment matters and collection activity) is an outstanding resource.

Pro tips

• Catalog your remote workers’ locations. Some states require this information.
• Call your insurance company to find out if they need the information as well.
• Be ready to defend against future negligence claims by having collectors attest, in writing, to the fact that they are working in a private, closed-off area of their home; are adhering to your policies and procedures; and are following your workstation expectation with regard to clean desk, password protections, etc.

Guidelines and Restrictions Governing Collection Activity

State guidelines and mandates related to suspension of debt vary widely, and they’re changing often. For the duration of the COVID-19 crisis, someone in your organization should be dedicated to staying on top of these changes. In addition to Cornerstone Support, insideARM, ACA International, and the Receivables Management Association International (RMAI) are great sources of COVID-19 guidance.

Consumer attorneys read the civil liability section of the Fair Debt Collection Practices Act (FDCPA) frequently, if not daily. Right now, most ARM leaders aren’t thinking long term about exposures they might be creating. But there are some things you need to do today to close gaps and prevent exposure later.

Credit reporting

You’ll need to determine how state-ordered suspension of collection activity or deferment of payments may affect consumers whose data you’re reporting. Then you’ll need to decide whether you’ll furnish any new data or accounts.

Earlier this week, the CFPB issued guidance on the Fair Credit Reporting Act (FCRA). As a result of the pandemic, the CFPB will consider the consumer reporting agency or furnisher’s individual circumstances when dispute responses are delayed beyond the 30-day guideline. As long as you’re making a good-faith effort to investigate disputes as quickly as possible, the CFPB will not cite an examination or bring an enforcement action.

Pro tip

See the Consumer Data Industry Association (CIDA) FAQ document 58 for codes collectors should use for accounts affected by a natural or declared disaster.

Payment processing

You’ll need to establish a policy that outlines how deferred payments will be handled. The legal risks posed by preauthorized EFTs, payment plans, checks on record, etc., will differ from payments the consumer-initiated themselves via portal, phone, or IVR.

In states that have prohibited collection activity, your safest bet is to suspend any payment plans involving charging credit cards or debiting accounts until you have contacted the consumer. Understand, some agencies have taken the position that unless the state order or law specifically prohibits the collector from processing previously authorized payment arrangements, they are willing to assume the risk of noncompliance.

Interacting with consumers

The FDCPA’s inconvenient time provision is alive and well. As always, you’re prohibited from contacting consumers at a time or place affected by a natural disaster or declared state of emergency.

Many consumers have been deeply affected by COVID-19, whether they’re sick, caring for someone, in the hospital, or unemployed. I recommend asking consumers outright whether and how the crisis is affecting them so you can successfully defend an inadvertent violation of the inconvenient time provision.

It’s important not to let the use of a dialer or any sort of prerecorded message block your ability to detect consumers who are particularly hard hit by this crisis.

Pro tips

• Stop workflows for any communications you and your legal counsel deem high risk.
• Provide agents with scripts that account for consumers’ stress and unease. Empathy is crucial during this time.
• If you are the middleman between consumers and a creditor and law firm, stay in close contact with the law firm so you’ll know how they’re responding to the crisis (e.g., suspending garnishment).

Bottom Line: Consult Your Attorney, and Proceed with Care

Language in some states’ collection restrictions leaves room for interpretation. Instead of mandating a suspension of activity, they “urge” or “encourage” certain steps. Discuss these guidelines with your attorney, and consider his or her input and your risk tolerance before making any decisions.

It’s also important to document everything you’re doing in response to this crisis including technology changes, script changes, and relocation of personnel. Keep these details well organized in a central location. Any change you make is a deviation from standard policy, so you must be prepared to show that you had reasonable procedures in place to comply with COVID-19 state mandates and existing federal law.