Against the backdrop of the big SCOTUS TCPA review and the monumental ATDS ruling in Glasser–that other firms are finally getting around to reporting on–the TCPAWorld continues to turn.

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One story we’ve been following is the saga of ringless voicemails. Notably, as the TCPA’s ATDS definition continues to constrict the battle over pre-recorded calls and RVM becomes the hottest front in the endless TCPA war. For those keeping track at home, the score is currently 3 cases to 0 in favor of RVM being subject to the TCPA, but that was before VoApps entered the fight in a big way a few months back with declarations from their founder and great new legal arguments.

Today is too jammed for us to relive all of the background together, but trust me when I say that the Defendant in the Saunders case–the first case considering the issue of whether RVM qualify as “calls” under the TCPA–recently filed a second summary judgment motion hoping to have that court determined that even though RVM are “calls” they are not calls to a number assigned to a wireless carrier; hence they are not subject to the TCPA’s restrictions on pre-recorded calls.

No dice.

The Court–glossing over the nuanced differences in the argument–granted Plaintiff’s ensuing motion to strike the summary judgment motion as a repetitive re-hash of the previous rulings in the case. The decision is Saunders v. Dyck O’Neal, Inc., Case No. 1:17-cv-00335, 2020 U.S. Dist. LEXIS 13262 (W.D. Mich. Jan. 22, 2020). Frustratingly the Court appears to hold that RVM are definitively subject to the statute without addressing the crucial issue:

the Court has already ruled—twice—that the Telephone Consumers Protection Act applies to the communications used by Defendant in this case.

But that’s not technically true. The Court previously held that RVM are “calls” but declined to grant Plaintiff’s summary judgment on the issue precisely because there were dangling issues surrounding whether such calls are actionable in this context. Defendant’s second MSJ was designed to clean up those issues. But rather than address them, the Court tosses the baby with the bathwater and uses some language that is sure to come back to haunt Defendant later in the case.

Interesting stuff. We’ll keep an eye on it.

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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. 

EDWARDSVILLE, Ill. — National Loan Exchange, Inc. (NLEX) announced today that the firm has teamed up with DebtNext Software to offer an online post-sale management tool exclusively for NLEX clients. This new technology platform enhances NLEX’s post-sale servicing by providing clients with a secure, centralized online portal where they can access and oversee post-sale account activity at their fingertips. 

“We’re excited about offering this new service as a value-add to our clients, especially to those sellers who have identified challenges or inefficiencies with post-sale account management,” said Tom Ludwig, NLEX’s General Counsel and Executive Vice President. “We are also thrilled to have this strategic partnership with DebtNext. They are one of the most experienced and trusted debt software companies in the industry, and they share our high standards for security and compliance.” 

NLEX’s new online portal will bring added transparency to post-sale account data. Clients using the service can also opt-in to receive notifications when important post-sale activity occurs. Additionally, they will be able to quickly access accurate dashboard reports regarding sales, account recalls, repurchases, direct pays, and media requests. The portal also streamlines the post-sale process by allowing for secure and real-time transaction management, including media, direct pays, and put backs.  

“We’re grateful to hear that our beta-testing clients are finding value in the new servicing,” added Ludwig. “They’re saying that the quality of information is outstanding and the dashboards are excellent at providing quick insight into the status of transactions and accounts. They’ve also cited improved efficiencies as well, including put-back turnarounds and media processing.” 

NLEX is formally launching the new service at the upcoming RMA Annual Conference in Las Vegas. For more information, https://www.nlex.com/postsale.aspx. 

About NLEX

National Loan Exchange, Inc. (NLEX) is a leading loan sale advisor in the United States and Canada. Over the course of 25 years, NLEX has closed more than 5,000 sales representing over $150 Billion in transactions. Our leadership and sales teams have a combined history in excess of 150 years in the financial services industry. NLEX offerings include national, state, and regional portfolios on behalf of many of the world’s top financial institutions. NLEX is a wholly-owned subsidiary of Heritage Global, Inc., a value-driven, innovative leader in asset valuations and transactions. Visit www.nlex.com and www.heritageglobalinc.com for more information. 

About DebtNext Software

DebtNext Software has been delivering robust solutions for their clients’ recovery management needs since its founding in 2003. Their industry-leading platform is currently used by some of the nation’s largest utility, telecommunications and financial services companies to help manage and optimize the placement of their accounts receivables with third-party collection vendors. DebtNext Software is headquartered in Copley, Ohio. For more information, visit www.debtnext.com, or email sales@debtnext.com. 

CHERRY HILL, N.J. — RS celebrated the season of giving by organizing Project S.A.F.E. (Supporting Armed Forces Engagement), a drive that collects food and supplies to the Armed Forces through SupportOurTroops.org. These men and women work tirelessly to protect our country and help others around the world. 

The drive was held to collect donations and create care packages. MRS placed containers across the three office locations encouraging support for the drive. 

“We have many former service members who work for us and their spirit of fighting for our country is an inspiration. In this hyper-partisan world we live in now, it is difficult sometimes to find something that everyone can support and unite around, thankfully support for our troops, and the great work they do, is universal. For all they do for our country, we felt the least we could do was show them our support by gathering and collecting the items they most needed,” said Co-CEO Jeff Freedman.

MRS collected over 13 boxes worth of donations, amounting to over 2,000 different items and weighing over 600 pounds. MRS is thankful for such enthusiastic participation so that continued support for the Armed Forces is possible.

“Like always, our staff rose to the occasion and went above and beyond in donating goods and items. We were blown away by the generosity. We are proud of our staff for all of their hard work but especially for their spirit of giving. It’s nice to know that our donations will bring some joy and happiness to the men and women who serve and protect our country particularly at this time of year,” said Freedman.

GREENVILLE, S.C. — Over the last several weeks, we have had the opportunity to engage with one of our favorite organizations, Fostering Great Ideas. FGI was the recipient of all the funds we raised during our year-end “12 Days of Giving” event. Now we’re reflecting on our year, and we can’t wait to see what 2020 holds!

In 2019, InvestiNet donated over $230,000 to local and national charitable organizations. One of InvestiNet’s core values is generosity with all resources, and employees at all levels take that to heart. 

InvestiNet also has a “Humanitarian Council” that leads and coordinates collective philanthropic efforts. Last year, the team coordinated donations of both time and money to 25 local organizations. We also hosted two community events at our new office in the Poe Mill community, which included a mural painting block party and a Trunk or Treat Halloween event for local families. 

In addition, any donation to a registered 501(C)3 by an employee is matched by InvestiNet. Employee matching donations to date total over $1.2 million. 

For more information about InvestiNet’s philanthropic endeavors, or to connect with us, contact HR@investinet.com.

Richard Cordray, former director of the Consumer Financial Protection Bureau (CFPB), is back in the spotlight. According to the Los Angeles Times, Cordray advised California’s Governor Gavin Newsom on the creation of the state’s own “mini-CFPB.” 

The idea of a mini-CFPB in California first came to light in April 2019, when a California Assemblywoman explored the idea at a press conference with Cordray. This month, almost exactly nine months later, the proposition for the mini-CFPB made its way into the Governor’s proposed budget for 2020-2021.  Lauren Valenzuela, Corporate Counsel for Performant Financial Corp., wrote an article for insideARM on the issue and summarized what role of the mini-CFPB:

The DFPI would have expanded enforcement authority to pursue “unfair and deceptive practices” and would give DFPI jurisdiction to supervise debt collectors, credit reporting agencies, FinTech companies, and other financial services providers previously unlicensed and unregulated by the Department of Business Oversight. 

…

Specifically, the DFPI’s activities would include:

• Offering services to empower and educate consumers, especially older Americans, students, military service members, and recent immigrants; 
• Licensing and examining new industries that are currently under-regulated;
• Analyzing patterns and developments in the market to inform evidence-based policies and enforcement;
• Establishing a new Financial Technology Innovation Office that will proactively cultivate the responsible development of new consumer financial products;
• Offering legal support for the administration of the new law; and 
• Expanding existing administrative and information technology staff to support the Department’s increased regulatory responsibilities. 

Cordray, who was appointed by President Obama and served as the CFPB’s first director, announced he was resigning from the top role in November 2017, eleven months after President Trump took office. Following his departure, there was some uncertainty about who would succeed him, but ultimately President Trump’s pick, Mick Mulvaney, became acting director while a new permanent director was sought. The permanent role went to current Director Kathleen Kraninger, who was confirmed in December 2018. 

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insideARM Perspective

Oh boy, here we go again. California, already known as a weird state for its laws and regulations in general, is about to get even more weird, at least for the financial services industry. While at the CFPB, Cordray implemented some tactics questioned by the industry during his tenure, including the often-criticized practice of regulation-by-enforcement. 

The Los Angeles Times quoted Cordray as saying things like, “[i]t was astonishing to me that California wasn’t in the business of regulating debt collectors” and that the mini-CFPB will “have to constantly be fighting to protect consumers” due to expected push-back from the industry.

Time will only tell what California’s mini-CFPB will ultimately look like, but it sounds like debt collection regulation, enforcement, and supervision will definitely be on the table.

New Jersey’s legislature has referred a new bill to its Consumer Affairs Committee that would impact how medical debt is handled prior to being referred to a collection agency. If passed, the bill would require healthcare professionals and facilities to provide income-based repayment options for patients before sending debts to collection agencies. Four primary sponsors and two co-sponsors introduced the bill on January 14, 2020. 

Specifically, the bill requires that:

• Healthcare professionals and facilities wait at least 90 days after first providing the patient with a bill before referring the debt for collection or legal action.
• Prior to the referral of the debt, the healthcare professional or facility must offer the patient an income-based repayment option where the payments do not exceed 15% of the patient’s discretionary income.
• The debt not be referred to a collection agency if the patient is in compliance with the payment plan—defined as making 11 scheduled payments in a 12-month period.
• Healthcare professionals or facilities discharge the debt—including any accrued interest—if the patient dies or becomes fully and permanently disabled, or defer the debt—without charging interest during the deferment period—during the period of disability if a patient becomes temporarily totally disabled. 

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insideARM Perspective

If this bill is passed, healthcare providers may find themselves needing to overhaul their payment processes. It seems unlikely that providers—especially smaller medical offices—have the capability to administer such a program. This capability or resource gap is the reason why providers refer debts to agencies, which are much better equipped to administer nuanced payment plans. The bill would be better suited if the income-based repayment plan could be administered through a collection agency.

The bill as written leaves certain crucial details vague. What, exactly, is “discretionary income”? Are providers left to determine that themselves? Wouldn’t it be better to provide a precise calculation of what is considered discretionary in order to prevent confusion and to create uniformity? What about the disability—who or what exactly certifies when the patient is considered disabled.

Leslie Bender, Chief Strategy Officer and General Counsel at BCA Financial Services, provides further insight:

There has been a growing concern about “surprise billing” and understanding the root causes of “surprise billing” is complicated, at best. Not only is it challenging for the insureds to stay up-to-date on what their plan covers, it is also challenging for healthcare professionals and institutional healthcare providers to understand all of the plan types and which services are covered.  While this can lead to billing mistakes and reimbursement errors, because it is the physician who has a more constant face to face relationship with the patient, a fair amount of the frustration is directed at the healthcare provider who may simply be navigating the same uncertain waters of what is/is not covered and how to address it. New Jersey’s new law, if enacted, creates an even more complex layer of issues. 

Moreover, the law would propose to defer or eliminate medical debts associated with providing care and treatment to a patient in the case of permanent disability, death, and temporary disability. The debt elimination is categoric and does not take into account medical bills or expenses that are covered by health insurance – or that arose from accidents or injuries in which a third party is liable? It seems illogical to eliminate or defer medical bills if and when a third party or health insurance is readily available to cover them. Another concern—could legislation like this inadvertently disincent healthcare providers from providing treatment to terminally ill or disabled patients?

Akron, OH — DebtNext Software today announced a new service offering: the DebtNext Collection Agency Accreditation (DNCAA). The DNCAA includes an on-site review, a detailed interview process with key management associates and a method to demonstrate an agency’s comprehensive policies, procedures and best practices. The DNCAA Findings Report creates a new way for ARM Vendor’s to share its story as an industry leader.

“The benefits were immediately obvious to me and I volunteered to be their first client” said Bill Howard, Senior Vice President of FirstPoint Collection Resources, Inc. He continued that “this objective third party assessment has already been shared with clients and prospects and garnered positive feedback and results.” 

Features and benefits of the DNCAA include:

• Summary and Exceptional Value Add (EVA) of each topic
• Overview & Insight into the Organization’s People, Systems and Processes
• Findings Report and validation letter that can be used for marketing and RFP support

The DNCAA is available today. For more information on the DNCAA please visit www.debtnext.com/enhanced-services or contact sales@debtnext.com.

About FirstPoint

FirstPoint is a leading provider of revenue cycle services that include Call Center, Early-out, Extended Business Office and Third-Party Debt Collections. Our roots date back to 1949 and we pride ourselves in doing business the right way by providing a superior level of service to our clients and their customers. FirstPoint is licensed and bonded nationally and is PPMS certified through the American Collectors Association International.

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About DebtNext Software

DebtNext Software has been delivering robust solutions for their clients’ recovery management needs since its founding in 2003. They utilize advanced technology combined with a breadth of industry knowledge to build function-rich solutions to drive recovery optimization and the management of third-party collection vendors. Their industry-leading Platform is currently used by some of the nation’s largest utility, telecommunications, financial services and accounts receivable management firms to fully illuminate their recovery management processes.

NILES, Ill. — Last year was full of growth for UNIFIN, INC, and one of the things we incorporated into our business is giving back to our community. Last year was no different, and we spent time helping out a few different local charities and ended our year helping Little Elves of Love.

Little Elves of Love aims to provide comfort to children diagnosed with cancer and other unfortunate diseases and situations. Partnered up with the Shriners Hospitals for Children- Chicago, Little Elves of Love donates toys of any kind to patients residing in the hospital during the holiday season and homeless shelters.

UNIFIN, INC. has been a supporter of Little Elves of Love for years and will continue to support and host a toy drive in hopes of collecting plenty of generous presents to give to these children just in time for Christmas morning.

Overall, it was a great year, both for business and for helping the community. Being able to give back to those in need, especially in the local Chicagoland area, makes it all worthwhile. Going into 2020, we plan to keep up the pattern, and are already working on our next charity for the month of February!

SAN FRANCISCO, Calif. — LiveVox, the leading provider of customer service and digital engagement tools, today announced the acquisition of SpeechIQ. 

SpeechIQ is an AI-driven speech analytics and quality assurance platform that will enable LiveVox to substantially strengthen its WFO application suite. Founded in 2015 and headquartered in Columbus, Ohio, SpeechIQ is an easy-to-use, cost-effective solution that helps drive agent productivity, operational efficiency, and improved customer engagement in contact centers. 

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Powered by a proprietary speech recognition engine that very quickly and accurately transcribes calls, SpeechIQ offers numerous features, including the ability to redact calls, search by keyword lists, retrieve and listen to calls, create manual and automated scorecards, and evaluate call sentiment – all supported by a complete reporting suite and full API. 

“SpeechIQ is a terrific addition to our digital and data-centric approach to communications,” stated LiveVox CEO Louis Summe.  “Their capabilities continue to fulfill our pledge to make digital transformation easier for our clients.” 

Joining the two platforms will equip organizations with the ability to measure, monitor and improve customer conversations across all channels while identifying the potential for operational efficiencies through analytics.  It will also further bolster LiveVox’s posture on Compliant Communication, as the transaction couples the industry-leading risk mitigation platform with an integrated speech analytics solution. 

“We’re thrilled to be part of the LiveVox family,” said SpeechIQ CEO Nick Bandy. “Our capabilities will enable all LiveVox customers to easily unlock the vast amount of insights within their call recordings.” 

This is the second acquisition LiveVox has announced in a month. In December 2019 LiveVox shared its plans to onboard Teckst, bringing mobile messaging to its communication suite. 

About LiveVox

LiveVox is the only one-stop-shop for true omnichannel engagement that unifies modern channels, CRM, and WFO functionality into a single cloud customer engagement platform. Facilitating over 14B interactions annually, LiveVox makes omnichannel easy by unifying all conversations and interactions in one place. Founded in 2000, LiveVox is headquartered in San Francisco with offices in Atlanta, Denver, St. Louis, Colombia, and Bangalore. To learn more, visit www.livevox.com. 

About SpeechIQ

Founded in 2015, SpeechIQ is an advanced speech analytics and quality management platform.  Headquartered in Columbus, Ohio, the platform delivers an easy-to-use, cost-effective solution that drives agent productivity, operations efficiency, and improved customer engagement. To learn more, visit www.speechiq.com.

Tuesday was a big day in the Seventh Circuit with three significant court decisions: two from the Court of Appeals and one from the Northern District of Illinois. They span the gamut of being good to bad for the industry—something that the iA Case Law Tracker makes super simple to keep up with. As with most things in life, it’s best to just rip off the bandaid, so let’s start with the bad news and end on a positive note.

Context Required for Creditor ID

Steffek v. Client Servs., No. 19-1491 (7th Cir. Jan. 21, 2020) deals with the issue of identifying the creditor to whom the debt is owed. The debt collector sent a collection letter that listed “RE: CHASE BANK USA, N.A.” in the header but provided no further context on the creditor information. The consumer sued, arguing that it’s unclear from the letter whether Chase is the current creditor or if the account was sold. After discovery showed that Chase was indeed the current creditor, the district court granted summary judgment in favor of the debt collector.

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Not so fast, says the Seventh Circuit. According to the court, the determination of who the actual creditor is should not be the be-all-end-all of analysis on the creditor identification issue. The question is whether the letter clearly identifies the current creditor in such a way that is understandable to the unsophisticated consumer. 

The Seventh Circuit determined that the letter in question here does not pass this test. The court agreed that the letter doesn’t explicitly need to use labels such as “creditor” or “owner of the debt,” but simply stating the creditor’s name without any context does not pass muster. 

Ultimately, the court reversed the district court’s decision and remanded the matter with instruction to enter summary judgment in favor of the consumer.

A Split Decision: Envelopes and Settlement Offers

While Steffek is a hard decision to read, we now come to a half-and-half decision dealing with envelopes and settlement offers. The facts of Preston v. Midland Credit Mgmt., No. 18-3119 (7th. Cir. Jan. 21, 2020), start off with a plot similar to the movie Inception—there was an envelope within an envelope. The debt collector sent a settlement offer letter to the consumer. The letter was enclosed in an envelope that had “TIME SENSITIVE DOCUMENT” typed on it. This envelope was encased in a larger envelope that contained a glassine window for the address information and no other markings. 

The consumer sued, alleging that the markings on the envelope violate § 1692f(8) of the FDCPA which prohibits language or symbols on the envelope. The district court dismissed the envelope claim, finding that the markings fall under the benign language exception since “TIME SENSITIVE DOCUMENT” does not in any way imply that the contents within are related to the collection of a debt. 

The Seventh Circuit was not convinced and took a more literal reading of § 1692f(8). While the debt collector argued that Congress’ intent behind § 1692f(8) was to protect the privacy of consumers, the Seventh Circuit said that the statute and its application are clear so there is no need to delve into congressional intent. A clear reading of the statute, according to the court, does not lead to absurd results—it still allows for markings placed on envelopes by, for example, the postal service in order to facilitate the delivery of mail. However, the “TIME SENSITIVE DOCUMENT” text goes beyond what is permitted in § 1692f(8). Due to this, the court reversed the dismissal. 

Editor’s Note: Oddly enough, the Seventh Circuit did not discuss the impact of this marked envelope being encased in a larger envelope. It seems that to the court an envelope is an envelope no matter how it’s sliced. 

Another claim brought by the consumer in Preston relates to the settlement offer contained within the letter. The letter contained three options to settle the debt with due dates. The consumer’s argument was that this, along with the “TIME SENSITIVE DOCUMENT” marking on the envelope, created a false sense of urgency and was false, deceptive, and misleading. 

Both the district court and the Seventh Circuit disagreed with the consumer. The letter’s saving grace, according to the courts, was that it included a safe harbor disclosure of “we are not obligated to renew this offer.” 

On the Verge of Sanctioning Plaintiff’s Counsel for Manufactured Claims

It’s no secret to debt collectors that some consumer attorneys bait FDCPA in order to manufacture claims against debt collectors, and thus force debt collectors into settlements. Back in September, the Northern District of Illinois called out plaintiffs’ counsel—a lawyer from Community Lawyers Group, Ltd.—for his scheme of faxing credit report disputes to obscure numbers in an effort to manufacture claims against a debt collector. In the September opinion, the court called out the following:

• “In the instant case plaintiffs (more specifically their attorneys) were the principal author of the harm of which they complain.”
• “Although the FDCPA is well intentioned, the mandatory recovery of attorney’s fees to a successful plaintiff has turned FDCPA cases into a profitable vein of litigation upon which entire firms focus their practices, provided, of course, the firms can keep finding plaintiffs. Indeed, as the Seventh Circuit has noted, the driving force behind these cases are the attorneys (particularly class action attorneys) and their quest for attorney’s fees.”
• “In the instant case, it appears to this court that plaintiffs’ attorneys’ actions were designed to avoid defendant’s procedures reasonably adapted to avoid errors, for the purpose of manufacturing a lawsuit. . . And, this is not the first time these lawyers have attempted this sort of stunt.”

After all of this, the debt collector filed a motion for attorney fees against plaintiff’s counsel. In the Irvin v. Nationwide Credit & Collection, Inc., No. 18-cv-2945 (N.D. Ill. Jan 21, 2020) decision, it’s obvious the court has had it with the plaintiff’s attorneys. Unfortunately, the court denied the motion for fees because the debt collector brought the motion only under the FDCPA’s fee-shifting statute. The court found that its authority to order fees from plaintiff’s counsel is uncertain under the FDCPA. 

However, the court stated in not so many words that had this motion been brought under a Rule 11 motion for sanctions, the outcome might have been very different. The decision ends with the following:

Plaintiff’s counsel, Celetha Chatman and Michael Wood, have been admonished and warned repeatedly by this and other courts in this and other districts concerning their misconduct in fabricating FDCPA cases for the purpose of collecting attorney’s fees. Should that conduct occur in the future, this court will not hesitate to impose severe sanctions on these lawyers. 

What does this mean for debt collectors? If you have any claims from these attorneys—especially if these claims are before Judge Gettleman—it’s time to get aggressive with defense strategies and move for sanctions where appropriate.

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There are more court decisions published each day than news publications can handle… want an easy way to keep up? The iA Case Law Tracker can help you keep up and conduct incisive and quick legal research in less time than it takes to pour your morning cup of coffee.