This article is part of an ongoing Think Differently series, launched in October 2019. 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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Technology is redefining agent productivity

Call center agents are essential to the success of debt buyers and collection agencies – and also their biggest expense. Personnel spending accounts for up to 70 percent of costs, so the industry is constantly looking for ways to boost efficiency. Increasingly, that means adopting digital technology and data analytics.

“As AI (artificial intelligence) gets stronger and more powerful, the percentage of issues handled by automated robots, chats, and even text technology is going to increase. It’s coming pretty quickly,” said Bryce Payne, vice president of sales at TCN, a leading provider of cloud-based call center technology.

As a result, the traditional measure of call center efficiency – agent productivity – is overdue for an update. The number of calls handled and the time it takes to resolve a call are becoming less important. Today’s technology puts the focus on the ultimate productivity metric: net recoveries. That’s the difference between revenue received and the resources spent to generate that revenue – regardless of how many minutes the agent spends on the phone.

Agents bring different skills to the table

An agent with great skill at negotiating solutions to complex medical debt cases should handle more of those cases, while an agent that can relate better to consumers with credit card debts or quickly resolve smaller accounts should be given a different workload. And certain people will respond better to a phone call at 3 p.m. than at 9 a.m.

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“The continued progress and use of technology create an opportunity to better understand how people communicate and interact. For example: A consumer that owes $300 of auto debt may have different communications expectations than a consumer who owes $1,000 of student loan debt. Simply put: Increasing the uses of innovative technologies will expand our understanding about how technology can elegantly supplement collection opportunities,” said Dan Fox, head of product marketing and strategy at SmartAction, which builds cloud-based virtual agents.

Most agencies today are not equipped to segment their accounts into categories that enable higher net recoveries or optimize calling patterns, or to programmatically pair agents and individual accounts.

Modern machine learning technology can solve that problem, feeding agents a steady diet of what they do best while automating many simpler tasks. That’s good not only for the agency, but also for the agents, who may experience more job satisfaction and performance-based rewards—no small matter in an industry with near 100 percent annual employee turnover.   

“You’re looking for agents to get on the phone with authenticated customers who really want to be talking to a person, who need to be talking to a person. If a customer wants to set up a simple payment arrangement, or they need an extension on their bill, these are things they can do with a highly intelligent automated system,” said Fox.

Don’t forget the consumer

Data science and machine learning can also make the experience more agreeable to consumers, leading to better recovery rates. User experience is an underappreciated outcome and many analytics programs come up short in addressing it.

“As the technology advances, you’re going to see robo-agents handling a larger percentage of the calls that come in. The consumer will be given the option to solve their problem in a way that they’re more comfortable with,” Payne said.

Digital channels, including text messages, email, and chat windows, can increase conversions among consumers who prefer not to talk to an agent over the phone. Many people appreciate having more time to respond to a debt collection inquiry without experiencing a live conversation.

“The idea is to make it as easy as possible for the consumer to communicate with us. It doesn’t necessarily make it easier for us to communicate with the consumer,” said Hal Goldstein, Vice President, Operations, Client Services Inc.

New technology can allow agencies to drive better results without relying as heavily on the skills of their best collectors. More calls covered, with better, more timely information, and prioritization of more lucrative accounts should translate to higher revenues from all agents.

In theory, this could also reduce the need for labor. But it’s more likely to make individual agents more efficient and perhaps even keep them in the job longer. That could boost an agency’s bottom line, with no impact on employment.

But that doesn’t mean agents will be going away.

“I don’t think you’re ever going to replace the live agent completely. It’s going to be very, very difficult to get the technology to the point where it can handle all the various nuances of the call,” Payne said.

Technology adoption is lagging

For all the promise of new technology, a surprising number of collection agencies have yet to fully modernize and adopt digital methods. The technology is running ahead of implementation for a couple of reasons.

First, technology upgrades cost money and can temporarily disrupt business. In the short run, agent productivity might actually decline. Agencies should evaluate the impact of any potential changes and contrast that with expected long-term returns on investment.

“You may find that some changes are relatively small, but they will have a significant positive impact on the business. In those instances, it makes sense to move pretty quickly on them,” said Brian Sharp, Director, Analytics & Reporting, CBE Companies.

Second, management needs to buy into any new technology and commit to making changes required to implement it. Many agencies still use systems that were built decades ago. Do they really want to transform their workforce and inventory management systems to make sure the new technology pays off?

“It’s the initial investment that scares people the most. Is it actually going to do what it says,” said Matt Wolk, senior director, risk and contact center efficiency, at Neustar Inc., which provides data to help marketers connect with customers. “Start small. Work your way into it. One of the biggest failures we’ve seen is people try to go too big, too fast.”

In the long run, most agencies are likely to embrace AI and data analytics. Change is coming, and major improvements in agent productivity will follow. How to manage that change will be up to individual agencies, but the industry as a whole is clearly moving in that direction.

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About 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 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. 

Learn more at www.iainnovationcouncil.com

2020 members include:

NILES, Ill. — Unifin, Inc (Unifin), a Veteran Owned Small Business that has sub-contracted on the U.S. Department of Education’s (ED) Defaulted Student Loan contract since 2012 is seeking to establish sub-contracts on ED’s Next Generation Servicing Environment contract. 

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Located just outside of Chicago, Ill. inside the old Arrow Financials Services location on Touhy, Unifin has built out a new state of the art call center facility with a seat capacity of 400. Clint Daoud, EVP and Co-Founder stated, “It’s a bit surreal to come back to the place that gave me my first opportunity in the ARM space 20 years ago. We feel like we have some big shoes to fill by being in the space where Arrow once occupied, but we believe we have the team, technology, and know-how to get close!”

Unifin, Inc. is a full-service BPO & Accounts Receivable Management firm licensed and bonded nationally. With experience servicing multiple ED sub-contracts over the past 8 years, Unifin understands the demand, scope, and complexity that an ED sub-contract brings. With a focus on Protecting its client’s brand and image, Compliance, Superior Performance, and Complete Transparency, Unifin is positioned for aggressive growth as a Govt. Sub-Contractor, ARM agency and BPO. 

As veterans on the task order, Unifin’s management and staff understand the complexity and demanding challenges that come with the ED contract.  In addition to traditional collections and skip tracing efforts, Unifin has serviced the ED contract from A to Z. Over the past 8 years, Unifin has:

• Developed and trained a team of professional:
• Managers, Supervisors, and Trainers
• Collectors
• AWG reps
• Operations support representatives (Rehab callers that followed up on declined/NSF payments & missing/incomplete apps)
• Administrative Resolution representatives
• The infrastructure and financial backing in place to support as many agents as the contractor needs
• Physical and IT security to satisfy compliance with ED’s FISMA standards
• Knowledge and experience managing ED compliance audits
• Properly completing the Federal Declaration application
• Experience dealing with Federal requests and on-site agent interviews
• Training material and trainers that can satisfy ED’s requirements for Compliance, Privacy Act, and Security Awareness Training
• The expertise to manage accounts on ED’s DMCS (Titanium) system

Unifin also is:

• Veteran Owned 
• Small Business Self Certified
• Currently Sub-Contracting with a staff of trained ED contract professionals with clearance

For additional information about Unifin’s services, Inc. please contact Clint Daoud at clint@unifirns.com, 847-787-1980 or Scott Nicholson at snicholson@unifinrs.com, 630-674-5211.

The United States Supreme Court just granted a petition for a writ of certiorari in William P. Barr et al. v. American Association of Political Consultants, Inc. et al., No. 19-631, to review the Fourth Circuit’s decision striking down 47 U.S.C. 227(b)(1)(A)(iii) as unconstitutional. (Hold my breath for a second…)

First, some background for this case. Petitioners here, are William P. Barr, Attorney General of the United States (“Attorney General”) and the Federal Communications Commission (“FCC”). Respondents are an association of political consultants and various political organizations. In 2016, respondents sued Attorney General and the FCC in the Eastern District of North Carolina, alleging that “the government-debt exception to the automated0call restriction effects an impermissible form of content-based discrimination, in violation of the Free Speech Clause of the First Amendment.” (See Petition at p. 4.) The district court granted summary judgment in favor of the government and rejected respondents’ claim that the TCPA violates the First Amendment. However, upon appeal by respondents, the Fourth Circuit vacated the lower court’s judgment. The court concluded that “the government-debt exception renders that automated-call restriction ‘fatally underinclusive’ ‘by authorizing many of the intrusive calls that the automated call ban was enacted to prohibit,’ and by ‘imped[ing] the privacy interests of the automated call ban.’” The court of appeals therefore held that the TCPA provision “fails strict scrutiny review” and “violates the Free Speech Clause.” The court of appeals further denied rehearing en banc. (See Petition at pp. 5 and 6.)

Petitioners filed their Petition on November 14, 2019 and presented the Supreme Court with the following question:

Whether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute.

Respondents submitted their brief in support of certiorari on December 4, 2019. They agreed that certiorari should be granted, but on slightly different grounds. Respondents argue that although the Fourth Circuit held that the statute at issue is unconstitutional, it refused to invalidate the speech restriction or provide any other meaningful relief. Instead, the court of appeals “severed” an exception to the speech restriction, and its severability analysis was wrong and therefore required the Supreme Court’s urgent attention. (See Respondents’ Brief.) The question presented by respondents to the Supreme Court was:

Whether the TCPA’s automated-call prohibition is an unconstitutional content-based restriction of speech, and if so whether the Fourth Circuit erred in addressing the constitutional violation by broadening the prohibition to abridge more speech.

Now, attention please: as the Supreme Court granted the petition for a writ of certiorari today (although it did not explain the grounds for granting), this long-fought battle over the controversial robocall ban is likely going to have a winner (in some ways)… The whole TCPA World is watching closely and we will keep you updated as always.

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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. 

The United States Supreme Court just granted a petition for a writ of certiorari in William P. Barr et al. v. American Association of Political Consultants, Inc. et al., No. 19-631, to review the Fourth Circuit’s decision striking down 47 U.S.C. 227(b)(1)(A)(iii) as unconstitutional. (Hold my breath for a second…)

First, some background for this case. Petitioners here, are William P. Barr, Attorney General of the United States (“Attorney General”) and the Federal Communications Commission (“FCC”). Respondents are an association of political consultants and various political organizations. In 2016, respondents sued Attorney General and the FCC in the Eastern District of North Carolina, alleging that “the government-debt exception to the automated0call restriction effects an impermissible form of content-based discrimination, in violation of the Free Speech Clause of the First Amendment.” (See Petition at p. 4.) The district court granted summary judgment in favor of the government and rejected respondents’ claim that the TCPA violates the First Amendment. However, upon appeal by respondents, the Fourth Circuit vacated the lower court’s judgment. The court concluded that “the government-debt exception renders that automated-call restriction ‘fatally underinclusive’ ‘by authorizing many of the intrusive calls that the automated call ban was enacted to prohibit,’ and by ‘imped[ing] the privacy interests of the automated call ban.’” The court of appeals therefore held that the TCPA provision “fails strict scrutiny review” and “violates the Free Speech Clause.” The court of appeals further denied rehearing en banc. (See Petition at pp. 5 and 6.)

Petitioners filed their Petition on November 14, 2019 and presented the Supreme Court with the following question:

Whether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute.

Respondents submitted their brief in support of certiorari on December 4, 2019. They agreed that certiorari should be granted, but on slightly different grounds. Respondents argue that although the Fourth Circuit held that the statute at issue is unconstitutional, it refused to invalidate the speech restriction or provide any other meaningful relief. Instead, the court of appeals “severed” an exception to the speech restriction, and its severability analysis was wrong and therefore required the Supreme Court’s urgent attention. (See Respondents’ Brief.) The question presented by respondents to the Supreme Court was:

Whether the TCPA’s automated-call prohibition is an unconstitutional content-based restriction of speech, and if so whether the Fourth Circuit erred in addressing the constitutional violation by broadening the prohibition to abridge more speech.

Now, attention please: as the Supreme Court granted the petition for a writ of certiorari today (although it did not explain the grounds for granting), this long-fought battle over the controversial robocall ban is likely going to have a winner (in some ways)… The whole TCPA World is watching closely and we will keep you updated as always.

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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. 

MINNETONKA, Minn. — Central Portfolio Control, a full-service and nationally licensed collection agency, today announces a donation to Sharing & Caring Hands of Minneapolis, Minn. 

“Giving back has always been a key value at Central Portfolio Control,” says Chief Operating Officer, Mike Lesher. “We believe in helping not only our clients and consumers but also our local community. We take an active interest in our communities and hope that our donation to Sharing and Caring Hands brings much needed help those who are in the greatest need.”

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Founded in 1985, Sharing & Caring Hands is a 501(c)(3) charitable organization that provides a compassionate response to the needs of the poor. Set up to be a vehicle for volunteers to commit their time and resources towards making a difference in the lives of others, it is a safety net organization that assists people with whatever needs are not being met. Current services include food, clothing, showers, shelter, transportation assistance, medical assistance, dental care, furniture, school expenses, and much more. 

Sharing & Caring Hands provides aid to the over 20,000 people who come through Mary’s Place Transitional Shelter in Minneapolis each month. Run primarily by volunteers (with very few paid employees), the organization does not accept federal or state financial assistance and is not affiliated with United Way. It relies solely on donations of time, goods, services and money from the community it serves. 

“Sharing & Caring Hands is an important bridge of support for the poor in our communities.

Central Portfolio Control is proud to assist in their incredibly important mission,” continues Chief Executive Officer, Mark Hedge. “We are humbled to be able to help them support the individuals, families, and children in need in our communities.”

To learn more about Sharing & Caring Hands, please visit sharingandcaringhands.org.

About Central Portfolio Control

Founded in 1998 and headquartered in Minnetonka, Minn., Central Portfolio Control, or CPC, is a full-service and nationally licensed collection agency focused on the recovery of distressed accounts receivable. CPC manages accounts on behalf of creditor clients while maintaining the highest ethical and legal standards. Central Portfolio Control is a consumer-focused organization that employs high-quality professionals to implement our proven processes of compliant collection and recovery, delivering exceptional customer service and bottom-line results. 

On Thursday, the Consumer Finacial Protection Bureau (CFPB) revealed the membership of its newly-created taskforce assigned with reviewing current federal consumer finance laws and regulations. The taskforce will report recommendations for improving and strengthening the same to Director Kathleen Kraninger. 

The CFPB selected Todd Zywicki to chair the taskforce. Zywicki is a professor at George Mason Univesity Antonin Scalia Law School, a Senior Fellow of the Cato Insitute, and the former Executive Director of George Mason University’s Law and Economics Center. Zywicki was also regarded as a contender for the permanent director position at the CFPB after Former Director Richard Cordray stepped down. The role ultimately went to Kraninger.

Zywicki, who sits on the board of the Competitive Enterprises Institute (CEI), and the taskforce received praise from CEI’s Policy Analyst, Matthew Adams, who stated:

CEI has long called for the CFPB to create such a task force to fix government regulations that impede access to credit, and Professor Zywicki is ideally suited to head these efforts. The creation of this task force demonstrates yet another way the Bureau, under the leadership of Kathleen Kraninger, is becoming less of an unwarranted menace to financial institutions and more pro-consumer.

Joining Zywicki on the task force are Dr. J. Howard Beales, III, Dr. Thomas Durkin, and L. Jean Noonan. Beales is a former professor at George Washington University and former director of the Bureau of Consumer Protection at the Federal Trade Commission (FTC). Durkin is a retired economist with the Federal Reserve Board. Noonan is a partner at the law firm Hudson Cook, former General Counsel at the Farm Credit Administration, and former Associate Director fo the FTC’s Bureau of Consumer Protection’s Credit Practice.

Director Kraninger states: 

The Taskforce will conduct a thorough examination of our current regulatory framework and report on how we can improve federal consumer financial laws to benefit and protect consumers. I look forward to the work the Taskforce will undertake and reviewing their recommendations.

The CFPB first announced the taskforce in October 2019, where it sought applications from persons with significant experience and professional recognition in consumer protection, markets, laws, and regulations. 

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insideARM Perspective

The CFPB’s regulatory spectrum might seem narrow—consumer finance—but the reach is quite broad. There are myriad laws and regulations that govern this segment of the financial industry, and not all of them jive well with each other. An example relevant to the debt collection industry is whether or not the CFPB has the authority to regulate the collection of healthcare debt. At one point, the CFPB implied that it did, but its proposed debt collection rules seem to imply otherwise. (See Consumer Relations Consortium comment to the debt collection NPRM, pp. 4-6.) If an example exists in the niche industry of debt collection, there are likely many more examples in the broader industry of consumer financial services. Charging a taskforce to review all relevant laws and regulations as a whole will help pinpoint gaps, which is the first step toward finding solutions.

Editor’s Note: This article is authored by John Rossman and Michael Etmund from the law firm Moss & Barnett, and is published here with permission from the authors.

The effective date of the California Consumer Privacy Act (CCPA) was January 1, 2020.  Unfortunately, the California legislature rushed the CCPA into law with broad language and scant guidance. Further, it is presumed that consumer attorneys will target financial services companies – including banks, fintechs, automobile lenders, debt collectors and debt buyers – for alleged violations of the CCPA with individual and class action lawsuits brought under the Rosenthal Act or other provisions of State or Federal law. Thus, it is crucial that all financial services companies understand how to comply with the CCPA.  

Your company is most likely not exempt from the CCPA

The CCPA applies to for-profit entities that:

1. Generate annual gross revenue of $25,000,000; or,  
2. Alone, or in combination, annually buy, receive, sell or share for commercial purposes the personal information  of 50,000 or more consumers, households or devices; or,
3. Derive 50% or more of annual revenue from selling consumers’ personal information

There is a common misperception that if a company complies with Federal privacy laws – such as GLBA or HIPAA – the company is exempt from complying with the CCPA. This is not entirely true. There are many categories of consumer information typically collected by financial services companies (such as biometric data and internet activity information, for instance) that are arguably not subject to GLBA and HIPAA. Thus, the handling of these categories of data for accounts otherwise covered by the GLBA or HIPAA would likely fall within the purview of the CCPA. Accordingly, the most efficient manner to service all data on such accounts would be to comply with the CCPA.

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Your Company Website Should be Updated Immediately to Reflect a CCPA-Compliant Privacy Policy

While the inclusion of a privacy policy in a company website is a best practice for businesses, the CCPA requires disclosures to consumers regarding at least 11 categories of personal consumer information.  In addition, the CCPA requires that a company must disclose policies regarding gathering, sharing, retaining and deleting information and the California consumers’ rights regarding the data.  

The first step in drafting a CCPA-compliant privacy policy is to map the categories of data maintained by your company and the sources of that data.  The completed data mapping will provide the information necessary to begin crafting a CCPA-compliant privacy policy and will provide an opportunity for your company to evaluate the data it collects and the utility of that data.  

Devise Strategy to Respond to “Verifiable Consumer Requests” to Identify and Delete Data

Two of the key consumer protection features of the CCPA is the right of the consumer to request disclosure of what data is collected about the consumer and the right to request deletion of a consumer’s information.  Companies should be ready to respond to such requests immediately. The law requires that a company respond to requests for categories of information or requests for deletion within 45 days, with one 45 day extension.  

Please note that a company must only respond to a “verifiable consumer request.”  Thus, it is crucial that a company be able to verify the consumer request before responding.  Further, there are exemptions to the consumer’s right to require a company to delete information including:

1. Data needed to complete a transaction;  
2. Data necessary to comply with legal obligations; and, 
3. Data to use in a lawful manner that is compatible with the context in which the consumer provided the information.  

Every company should immediately have in place a strategy for responding to such consumer requests for disclosure and/or deletion in a matter that conforms to the law.  If your company’s responses to consumer requests will be identical, templates for responding to consumer requests in writing and scripting for responding to consumer requests by phone is highly recommended to ensure consistency. 

Author’s Note: This article is provided only as a general discussion of legal principles and ideas. Every situation is unique and must be reviewed by a licensed attorney to determine the appropriate application of the law to any particular fact scenario.  If you have a legal question, consult with an attorney. The reader of this publication will not rely upon anything herein as legal advice and will not substitute anything contained herein for obtaining legal advice from an attorney.  No attorney-client relationship is formed by the publication or reading of this document. Moss & Barnett assumes no liability for typographical or other errors contained herein or for changes in the law affecting anything discussed herein. 

ROCHESTER, N.Y. — The employees of Continental Service Group, Inc., dba ConServe, joined together in the month of December to support local agencies that provide programs to the homeless and disadvantaged people of our communities.  ConServe’s Jeans For Charity program, along with the company’s “Matching Gift Program,” generously donated to House of Mercy, Buffalo City Mission and the Open Door Mission. This ongoing initiative symbolizes ConServe’s commitment to its corporate mission of helping to improve the human condition.

Rochester Open Door Mission Executive Director, Anna Valeria-Iseman states, “We are so thrilled and full of gratitude to be part of this incredibly generous show of support. Open Door distributed 1,300 pounds of clothing in December, 2019 and is more than we have received in any other month for as long as we have tracked that data. This means that more and more families are coming to us for assistance. To be blessed with this level of support for much-needed items, for men, women, and children right here in Rochester, is amazing.”

“Our Jeans for Charity program provides our employees with the opportunity to enjoy dressing down while making a difference in our community,” said George Huyler, ConServe’s Vice President of Human Resources.  “At ConServe, our corporate culture is based upon doing the right thing, at the right time, the right way. Helping people and giving back to our communities exemplifies the moral and ethical fiber of our employees while capturing the essence of our mission statement – our people helping to improve the human condition. We take great pride in being outstanding role models for business, while being a good corporate citizen in all aspects of our operations.”

About ConServe

ConServe is a top-performing and award-winning provider of accounts receivable management services specializing in customized recovery solutions for our Clients. Anchored in ethics and compliance and steadfast in our pursuit of excellence, we are a consumer-centric organization that operates as an extension of our Clients’ valued brands.  For over 34 years, we have partnered with our Clients to provide unmatched customer service while simultaneously helping them achieve their accounts receivable management goals.  Visit ConServe online at: www.conserve-arm.com

About ConServe’s Jeans For Charity Program

ConServe’s Jeans For Charity initiative began in 2008 when their employees had an idea to launch a program that would provide a way of giving back to their communities.  ConServe employees can participate in monthly charitable donations, benefitting a wide-range of not-for-profits (501-C-3) organizations, in exchange for having the option of dressing down and wearing jeans to work for the entire month. The funds raised by the employees’ generosity are supplemented by the organization’s Matching Gift Program – symbolizing ConServe’s commitment to good corporate citizenship. This ongoing initiative is just one of the ways in which ConServe supports varied and diverse community agencies. To date, the program has donated over $997,900 to local community organizations.  

About the House of Mercy

The House of Mercy is dedicated to serving and advocating for Rochester, NY’s homeless citizens, providing food, shelter, clothing, and advocacy.  The House of Mercy never closes its doors on people in need and they strive to be a beacon of hope for the poorest of the poor, and never give up on the thousands of people they serve each month.  Visit them online at www.houseofmercyrochester.org

About Buffalo City Mission

The Buffalo City Mission, founded in 1917, is a not-for-profit organization that provides preventative, emergency and long-term recovery services to thousands of people who are homeless or impoverished. The Mission includes: Women and Children’s Shelter (Cornerstone Manor); the Men’s Community Center; the Mission Vehicle Donation Program; and the Dick Road thrift store location to better serve our community. Visit them online at:  www.buffalocitymission.org

About Open Door Mission

The Open Door Mission is a Christian Rescue Mission founded to provide for the spiritual and physical needs of the impoverished and homeless men, women and children of Rochester, NY by restoring hope and changing lives. Established in 1952, the Open Door Mission is a privately funded 501(c)(3) non-profit organization chartered in the state of New York that relies primarily upon the private donations from the community to run its programs. Visit them online at: www.opendoormissionrocny.org

If a law firm sends a letter seeking to collect the correct amount, from the correct consumer, on behalf of the correct creditor, can the consumer still sue, claiming the firm violated the FDCPA because no attorney was “meaningfully involved” in preparing the letter?  The Sixth Circuit recently held the answer is “no” in Buchholz v. Meyer Njus Tanick, P.A., _F.3d_, 2020 WL 35431  (6th Cir. 2020), because the consumer suffered no “concrete injury” as a result of the letter and therefore lacked standing to pursue the claim in federal court.  The Buchholz decision should provide powerful support for creditors’ rights attorneys who are fighting against “meaningful involvement” claims.

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The plaintiff in Buchholz, a Michigan resident, received two letters from a Minneapolis-based law firm, defendant Meyer Njus Tanick, PA (“MNT”) regarding accounts he owed to Synchrony Bank.  Id. at *1.  Both letters allegedly included a “pre-populated or stock signature” of Karna Harms, who plaintiff claimed was MNT’s only Michigan-based attorney.  Id. Buchholz alleged that given the high volume of letters processed by Harms and the other MNT attorneys, no attorney could engage in a “in a meaningful review of the underlying accounts prior to determining whether to send the collection letters.”  Id.  According to Buchholz, sending the letter on firm letterhead created the impression that an attorney “has reviewed the file and made the professional considered determination to send the letter.”  Id. Importantly, however, Buchholz did not claim these were not his accounts, or that the letters contained in any inaccuracies. 

The Sixth Circuit affirmed the district court’s decision to dismiss the complaint for lack of subject matter jurisdiction, because Buchholz lacked standing under Article III of the Constitution.  As the Court noted: “Not all disputes have a home in federal court. Article III limits the judicial power to resolving actual ‘Cases’ and ‘Controversies,’ not theoretical questions.” Id. at *2.  Plaintiffs are required to show they suffered a “concrete” injury, i.e., an injury that is “real and not abstract.”  Id.  That injury must also be “fairly traceable” to the challenged conduct of the defendant.  Id. 

The Buchholz Court rejected the argument that plaintiff had standing to sue because he allegedly suffered undue “anxiety” that he would be sued if he did not promptly pay.  Id. at *5.  “In other words, Buchholz is anxious about the consequences of his decision to not pay the debts that he does not dispute he owes.”  Id. at *6.  This type of “self-inflicted” injury does not confer standing.  Id. 

The Sixth Circuit also rejected the notion that Buchholz had standing to sue based the defendants’ alleged “procedural violation” of failing to conduct a meaningful attorney review before sending the letters.  The Court stated:

[E]ven assuming MNT violated the statute by misrepresenting that an attorney had reviewed Buchholz’s debts, we find ourselves, like we were in Hagy, unable to identify any harm to come from that violation. Buchholz gives us no reason to believe he did not owe the debts. He does not allege, for example, that the statute of limitations has expired, that res judicata precludes MNT from collecting the debts, or even that MNT miscalculated the amounts he allegedly owes. . . . We are at a loss for how MNT’s letters caused any harm, much less harm that Congress intended to prevent when it enacted the FDCPA. 

Id. at *9.  In sum, because Buchholz was unable to show he suffered the type of harm that Congress tried to prevent when it passed the FDCPA, or harm that was cognizable at common law, the Sixth Circuit held the district court had correctly dismissed his complaint for lack of Article III standing. Id. at *10.

The Buchholz decision contains a well-reasoned application of the Supreme Court’s Article III jurisprudence, but perhaps more-importantly, the outcome of the case just makes sense.  The FDCPA does not give a consumer a license to sue the attorney retained by his creditor just because the consumer disagrees with the procedure they think the attorney used when preparing a letter for his client.  If the contents of the letter are accurate, then the FDCPA has not been violated. Well done, Sixth Circuit. Well done.   

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Want a tool that helps you keep up with all of the relevant industry case law? The iA Case Law Tracker can help you conduct incisive and quick legal research in less time than it takes to pour your morning cup of coffee.

For a case that “turns in part on what constitutes an automatic telephone dialing system (“ATDS”) under the TCPA” “to conserve the parties’ and judicial resources” the Honorable Judge Cecilia M. Altonaga, for the Southern District of Florida has stayed a case, pending FCC and 11^th Circuit rulings on the definition of an ATDS, in Barnes v. Cs Mktg. LLC, 2020 U.S. Dist. LEXIS 1054. This may spark another historic avenue for the defense to stave off ATDS claims.

In this Barnes case, the Plaintiffs brought a class action for alleged TCPA violations asserting that the Defendants commissioned automated telemarketing calls to them without their prior express consent, under an agreement between the Defendants and a third party.  A threshold issue in this case is whether the equipment used falls within the definition of an ATDS. The plaintiff testified yes; the Defendants testified no.

As a refresher, the TCPA defines the terms ATDS as equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator; to dial such numbers.”  The FCC is authorized to interpret the TCPA and prescribe rules to implement it.  The FCC’s orders regarding the ATDS definition, were recently overturned in ACA International v. FCC, 885 F. 3d 687 (D.C. Cir. 2018) because of the inconsistency where a function of an autodialer is to dial numbers without human intervention, yet a device could still qualify as an autodialer under the FCC even if it needed human intervention.  Id. at 703.  Since ACA In’l, the FCC has twice sought public comment on how to interpret and apply the definition of an ATDS, but has not yet issued a decision.  Additionally, there is an appeal pending with the 11^th circuit,  Glasser v. Hilton Grand Vacations Co., LLC, where the sole issue is whether the Defendant’s dialing system, which has some human intervention, constitutes an ATDS.

Judge Altonaga held that if the FCC adopts a definition that “to be an ATDS, equipment must (a) use a random or sequential number to store or produce numbers and dial those numbers without human intervention, or (b) that predictive dialers do not meet the statutory ATDS definition, that decision will bind the court and may require dismissal.”  Therefore the Court granted a stay pending the FCC, and 11^th circuit Glasser, decisions.  The Court noted that the Plaintiffs here would suffer little prejudice because their ATDS claims had already been litigated and collected on in a different case against the third party that made the calls.  Here, Plaintiffs seeks to hold the Defendant liable for calls to numbers provided by the third party, not numbers randomly generated by the third party’s dialer, so the court held the parties and the court would certainly benefit from a clarification the ATDS definition.

TCPAWorld will keep track of developments as to the FCC and 11^th circuit rulings, as well as whether this argument becomes a successful tool for defendants nationwide.  Stay tuned.

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