GENESCO, N.Y.—Coast Professional, Inc. (Coast) hosted the first annual Coast Cares’ Education Open golf tournament that raised over $40,000 for school districts in Livingston County including Geneseo, Mount Morris, Dansville, and York school districts. The tournament was held at the Livingston Country Club on 08/23/2019 and was designed to assist the school districts in providing underprivileged youth with access to materials, tools, and experiences that they may not otherwise have been afforded. 

Coast created the Coast Cares program to further the company’s community service and outreach efforts to extend beyond employee donations. While frequent and significant employee donations are the basis for the program, Coast Cares advances the company’s philanthropic initiatives and goals through events and volunteer efforts.  

The tournament featured over 100 golfers with turnout from Coast, the company’s subcontractors, and members of the school districts. The Coast Cares’ Education Open had over 100 local and national companies provide sponsorships and donations to further the cause. The total amount raised included $17,000 from Coast’s Dress Down for Charity Program donations from the company’s employees. 

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“This is by far the company’s largest event, donation, and community effort ever,” stated Jonathan Prince, Chief Operating Officer at Coast. “We wanted to develop a way to give back to children in our local community, raise more than we ever have, and have fun in the process. Community outreach is a key component of our culture, and this tournament suited our ambitious goal.”

“This event was the perfect way to celebrate our company, our employees, the school districts, and most importantly, to support underprivileged youth in our area,” stated Everett Stagg, President at Coast. “I want to thank our incredible team that facilitated the event, the substantial support from our sponsors, and the school districts for making this event possible. This will continue to be a pivotal event championed by our company going forward.” 

About Coast Professional, Inc.:

Coast Professional, Inc. is an accounts receivable management company, dedicated to the respectful and ethical collection of higher education and government debt. Coast provides professional collection services to over 200 campus-based colleges, universities, and government clients. Coast is a five-time honoree on the Inc. 5000 list for American’s Fastest-Growing Private Companies provided by Inc. Magazine and in 2019, was recognized for the fourth time as one of the “Best Places to Work In Collections” by insideARM.com and Best Companies Group. Since 1976, Coast has worked closely with clients to increase recoveries by assisting consumers in resolving their financial obligations. Coast’s success is exemplified by exceptional recoveries, superior service, and dedication to the highest levels of compliance. More information about Coast can be found at www.coastprofessional.com

Yesterday, the Eastern District of Washington did something rare: it awarded attorney fees and costs to a debt collector for defending a Fair Debt Collection Practices Act (FDCPA) case that the consumer brought in bad faith.

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In Vougas v. Suttell and Hammer, PS, No. 2:18-cv-331 (E.D. Wash. Sept. 3, 2019), the creditor obtained a judgment against the consumer for the amount owed on a credit card. The creditor hired Suttell and Hammer, PS (Suttell), a debt collection law firm, to collect on the judgment. Suttell sent a collection letter to the consumer to collect $14,968.09, which represents the unpaid balance on the account. The consumer filed an FDCPA claim alleging that the letter misrepresented the amount of the debt because the letter was silent as to interest or fees. The lawsuit also contained a state law claim for a similar allegation.

The court granted summary judgment in favor of Suttell, finding that there is nothing wrong with the letter it sent. Washington state law requires debt collectors to disclose the amount of the debt by listing the unpaid balance and interest/fees if any exist. The evidence presented in the case showed no indication that Suttell or the creditor ever tried to collect anything other than the unpaid balance—in other words, there was no evidence showing that Suttell or the creditor ever tried or intended to collect interest or fees. The consumer “produced nothing more than ‘bald assertions’ to controvert that fact.”

The court used the same reasoning to find in favor of Suttell on the FDCPA claim. The court stated that there is no affirmative duty for a debt collector to disclose that interest is not accruing and the consumer failed to cite any authority to show otherwise.

Most notably, the court states:

Given the lack of any authority cited by Vougas or evidence to support that Suttell indeed had violated the FDCPA, or the WCAA, the Court finds that the lawsuit was not undertaken in good faith. 

Due to this lack of good faith, the court awarded attorney fees and costs to the debt collector under section 1692k(a)(3) of the FDCPA.

insideARM Perspective

If cases like this or Vedernikov are any indication, the tides seem to be turning in the courts. The cottage industry of plaintiffs’ counsel has been flooding debt collectors with hypertechnical lawsuits for some time now. Judge Cogan out of the Eastern District of New York recently dubbed these lawsuits as “lawyer’s cases” because the creativity of the claims goes beyond that which a least sophisticated consumer is capable of. Courts now are starting to see that the FDCPA is being used as a means of “debt evasion and to prop profits among the plaintiffs’ bar.” Will these recent rulings stop the hypertechnical “lawyer’s cases?” Probably not, but at least now debt collectors are armed with the knowledge that the courts are starting to see these suits for what they are.

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Trends, such as courts seeing through these hypertechnical claims, are becoming more apparent. You can keep up with it through iA’s Case Law Tracker, which allows you to conduct incisive and quick legal research in less time than it takes to pour your morning cup of coffee.

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

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The U.S. Court of Appeals for the Seventh Circuit recently affirmed judgment in favor of two debt collectors and against a debtor for his claims arising under the federal Fair Debt Collection Practices Act (FDCPA) and the Wisconsin Consumer Act (WCA). 

In so ruling, the Court held that the debtor did not create a triable issue of material fact to overcome summary judgment because he failed to present sufficient evidence that the transactions comprising the credit card debt on the underlying account were for “personal, family, or household purposes,” and therefore that the debt was a “consumer debt” subject to the FDCPA, 15 U.S.C. § 1692, et seq., and the WCA, Wis. Stat. §§ 421-427.

A copy of the opinion in Burton v. Kohn Law Firm is available here.

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A law firm filed suit against a debtor in Wisconsin state court to collect amounts due to its client debt collector.  The debtor denied knowledge of, or association with the issuer of the credit card at issue (“creditor”), and filed suit against the law firm alleging violations of the FDCPA and WCA for filing the state court action without first providing the debtor notice of his right to cure the default.

After the state court action was dismissed on the basis of the debtor’s denial that he incurred the underlying debt, the debtor amended his federal complaint against the law firm to add the debt collector as an additional defendant. 

In ruling upon the parties’ cross motions for summary judgment, the trial court entered judgment in favor of the law firm and the debt collector, holding that the debtor failed to establish that the debt at issue was a “consumer debt,” incurred for personal, family or household purposes, and therefore, was not subject to the FDCPA or WCA.  The instant appeal followed.

On appeal, the Seventh Circuit first examined the plain language of the FDCPA and WCA and its purpose to protect personal borrowers from abusive debt collection practices. 

As you may recall, the FDCPA defines a “debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes.” 15 U.S.C. § 1692a(5). Similarly, the WCA protects transactions involving a “customer,” Wis. Stat. § 421.301(13), and defines a “customer” as “a person … who seeks or acquires real or personal property, services, money or credit for personal, family or household purposes,” id. § 421.301(17).

Although the debtor maintained that the underlying debt was not his, the Seventh Circuit noted that he nonetheless may claim FDCPA protection by showing that the debt collector treated him as a “consumer” allegedly owing a consumer debt. Loja v. Main St. Acquisition Corp., 906 F.3d 680, 684 (7th Cir. 2018) (holding “that the definition of ‘consumer’ under the FDCPA includes consumers who have been alleged by debt collectors to owe debts that the consumers themselves contend they do not owe”).

However, the Court held, a plaintiff proceeding under this theory still must offer evidence to establish that the debt was a “consumer debt.” 

Thus, the issue to be decided on appeal was whether the debtor submitted sufficient evidence to create a triable issue of fact that the underlying credit card debt was incurred for personal, family, or household purposes.

The debtor argued that five pieces of evidence established that the debt incurred on the credit card account was consumer debt: (1) his statements that to the extent he was liable for the debt, it was a consumer debt; (2) the defendants’ treatment of the debt as a consumer debt by including FDCPA disclaimers on the collection letters, suing the debtor in his personal capacity, and sending communications to his personal address; (3) the law firm and the debt collector’s description of their consumer debt collection services on their websites; (4) an employee of the creditor’s email description of the underlying account as a “consumer account”; and (5) the billing statements listing purchases made on the credit card for personal, family, or household purposes.  The appellate court examined each of the debtor’s arguments in order.

First, as to the debtor’s own contention that his own statements suffice to prove that the debt was a consumer debt, the Seventh Circuit noted that the debtor’s representations in this case directly conflicted with those in the state court action. 

Specifically, his complaint in the federal action alleged that “[t]o the extent that [debtor] entered into a credit agreement with [creditor], such agreement was entered into for personal, family or household purposes,” yet in the state court action, he maintained that he never applied for, had knowledge of, or made purchases or payments towards the account.  Without any affidavit or sworn testimony to support his claims, the debtor’s allegations alone failed to establish that the debt at issue was a “consumer debt,” and the Seventh Circuit rejected the debtor’s self-serving statements.

Next, the Court reviewed the debtor’s argument that the law firm and the debt collector’s treatment of the debt — including use of FDCPA disclaimers in collection letters — established that the debt was a consumer debt.  The Seventh Circuit also rejected this argument, noting that courts “have held repeatedly that merely including FDCPA disclaimers on debt collection letters is insufficient evidence that the debt was a consumer debt because debt collectors may be exercising caution and including disclaimers on all communications with debtors simply to avoid any FDCPA liability.” See, e.g., Gburek v. Litton Loan Serv. LP, 614 F.3d 380, 386 n.3 (7th Cir. 2010) (noting that evidence that letter included disclaimer identifying it as attempt to collect a debt “does not automatically trigger the protections of the FDCPA”). 

The Seventh Circuit was also unpersuaded by the debtor’s arguments that filing of the state court action and mailing of communications to the debtor’s home address established the debt as a consumer debt, because an individual can be sued in a personal capacity for a business debt, and can carry on business activities from his residence. 

Without lengthy analysis, the Seventh Circuit also rejected the debtor’s argument that the debt was a consumer debt because the law firm and the debt collector advertised services collecting consumer debt on their websites, concluding that such general descriptions of their services have no bearing on the debt they attempted to collect from the debtor in this case.

The Court next analyzed the debtor’s argument that the district court improperly excluded an email from the creditor which identified the debtor’s account in default as “a consumer account.”  The email, sent by an employee of the creditor in response to an inquiry from the debtor’s counsel, was characterized by the trial court as “a statement made by someone other than the declarant to prove the truth of the matter asserted (that the debt was consumer debt),” and excluded as inadmissible hearsay. 

On appeal, the debtor contended that the email was not inadmissible hearsay, but instead, an admissible statement of an opposing party under Fed. R. Evid. 801(d)(2)(C).  However, because the email was offered to provide the truth of the matter asserted — i.e. establish that the creditor itself stated the account was a consumer account — the Seventh Circuit concluded that the email was correctly characterized as hearsay.  Fed. R. Evid. 801(c), 802.  Moreover, the Court found that the exception under Rule 801(d)(2)(C) did not apply, because the email came from an employee of the creditor — who was not a party to the lawsuit — and cannot be attributed to the opposing parties here, the law firm and the debt collector. 

Alternatively, the debtor argued that the email was admissible under the residual exception to the hearsay rule, Rule 807.  Rule 807(a) provides that a statement not otherwise subject to a hearsay exception “is not excluded by the rule against hearsay” if: (1) the statement has equivalent circumstantial guarantees of trustworthiness; (2) it is offered as evidence of a material fact; (3) it is more probative on the point for which it is offered than any other evidence that the proponent can obtain through reasonable efforts; and (4) admitting it will best serve the purposes of these rules and the interests of justice. Fed. R. Evid. 807(a).

The Seventh Circuit concluded that the email did not satisfy any of these conditions because: (1) the statement was not made under oath or subject to cross-examination; (2) the debtor sought to introduce the email to show the creditor stated the account was a consumer account, but such distinction did not provide a factual dispute of whether the debt was a consumer debt; (3) the debtor could have obtained sworn deposition or in-court testimony of the creditor’s employee or any other representative through reasonable efforts, and; (4) the debtor failed to establish that admitting the email will “serve the purposes of these rules and the interests of justice.”  Accordingly, the appellate court agreed with the district court’s determination that the creditor’s email was properly excluded as inadmissible hearsay.

Lastly, the Seventh Circuit considered the debtor’s argument that the billing statements on the account demonstrate that the debt in question was a consumer debt. 

While the statements showed that most charges to the account were purchases of low dollar amounts primarily at gas stations and convenience stores, they also shed no light on why these charges were incurred. 

Because the debtor was unable to explain whether these transactions were for a consumer as opposed to a business purpose, the billing statements failed to provide adequate information for a trier of fact to conclude that his purchases were made for personal, family, or household purposes. Cf. Matin v. Fulton, Friedman & Gullace LLP, 826 F. Supp. 2d 808, 812 (E.D. Pa. 2011) (finding the court “lack[ed] sufficient information to determine whether the purchases were made for primarily personal, family, or household purposes” based on account statement where plaintiff was “unable to recall what purchases she made on her credit card and the purpose for those purchases”).

For the foregoing reasons, the Seventh Circuit concluded that the trial court properly determined that the debtor failed to submit sufficient evidence to create a triable issue of material fact that the underlying debt at issue was a “consumer debt” for the purpose of the FDCPA and WCA.  Accordingly, judgment in favor of the law firm and the debt collector and against the debtor was affirmed.

Plaintiffs who file for bankruptcy often list potential Fair Debt Collection Practices Act (FDCPA) claims on their schedule of assets. On Friday, August 30, the District of New Jersey calling out a plaintiff for concealing FDCPA claims from the bankruptcy court by failing to update the court of all FDCPA claims filed throughout the bankruptcy proceeding. 

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According to PACER, Igor Litvak of The Litvak Law Firm, PLLC represented plaintiff in the bankruptcy proceeding while Yaakov Saks of Saks Stein, PLLC represented the plaintiff in eight separate FDCPA claims. The decision discussed here is combined from two of these cases: Vedernikov v. Atl. Credit & Fin., Inc., No. 18-15273 (D.N.J. Aug. 30, 2019) and Vedernikov v. Oliphant Financial, LLC, No. 18-17365 (D.N.J. Aug. 30, 2019). Plaintiff initiated all eight FDCPA claims after he filed for bankruptcy but before the bankruptcy court issued a discharge. 

The court noted, however, that plaintiff did not disclose all of these claims to the bankruptcy court. Plaintiff filed two updates to his schedule of assets. While the first update notified the court that plaintiff initiated several FDCPA lawsuits, the second update did not—likely because there were no new lawsuits filed in the week-long time frame between the two updates. However, five FDCPA claims were filed after these first two updates, but plaintiff failed to update the bankruptcy court about them.

A timeline is helpful here:

• 10/08/2018: Plaintiff files for bankruptcy, listing a single “potential FDCPA” claim valued at $1,000.
• 10/23/2018: FDCPA lawsuit 1 filed.
• 10/24/2018: FDCPA lawsuit 2 and 3 filed.
• 11/20/2018: Plaintiff updates bankruptcy schedule of assets. 
• 11/27/2018: Plaintiff again updates bankruptcy schedule of assets.
• 12/12/2018: FDCPA lawsuits 4, 5, and 6 filed.
• 12/18/2018: FDCPA lawsuit 7 filed.
• 12/27/2018: Trustee declared that bankruptcy estate was fully administered and there was no property available for distribution.
• 01/30/2019: FDCPA lawsuit 8 filed.
• 02/01/2019: Bankruptcy court discharges plaintiff’s bankruptcy petition.

Ultimately, the court found that plaintiff acted in bad faith. Plaintiff had a duty to disclose to the bankruptcy court any potential claims and, in this case, he failed to do so. According to the court, Plaintiff was aware of the additional FDCPA claims before the bankruptcy discharge occurred. This is shown by plaintiff’s statements in the other court filings and plaintiff’s own bankruptcy filing, which listed the defendants of these FDCPA claims as unsecured creditors. The court stated:

By shielding the FDCPA Matters from the bankruptcy court. Vedernikov secured a benefit for himself in the bankruptcy proceeding while attempting to protect his interests in the FDCPA Matters. Such behavior runs afoul of Vedernikov’s duties as a debtor and threatens the integrity of the bankruptcy process. Vedernikov’s response to the [Order to Show Cause] shows that he fails to comprehend his duty to disclose and would like the Court to simply wait until he decides if he is going to comply with the Bankruptcy Code. This position “assault[s] the dignity or authority of” the Court and the Bankruptcy Court.

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Want to be the first to know of cases where the court calls out FDCPA plaintiffs or their counsel? You can do so through iA’s Case Law Tracker, which allows you to conduct incisive and quick legal research in less time than it takes to pour your morning cup of coffee.

A Virginia district court just held that a manually placed call—agent dialed all ten digits folks—may still have been an ATDS call because it was placed from a workstation that had access to cloud-based dialer domains; even though the agent placing the call lacked credentials to access those domains. Making matters worse—the court expressly finds that a popular contact solution has the capacity to store and produce numbers using a random or sequential number generator.

That’s bolder than I hope to ever use in a post again.

Here’s the key language you need to understand:

Five9 Virtual Contact Center (“VCC”) domain, which includes dialing modes such as the “Power Mode,” “Progressive Mode,” and “Predictive Mode” that do have the capacity to store and produce numbers using a random or sequential number generator and then automatically dial such numbers (i.e., almost certainly would qualify as ATDSs).

Wow. What in the (TCPA) world is happening in Virginia?

Ok. Let’s break this down.

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The case at issue is Morgan v. On Deck Capital, CASE NO. 3:17-CV-00045, 2019 U.S. Dist. LEXIS 147757 (W.D. Va. Aug. 29, 2019). The court denies summary judgment to the Defendant finding that the five9 manual solution used to place the calls to the Plaintiff may qualify as an ATDS.

In analyzing the issue—the court applies the statutory definition of ATDS—there’s that bold again. Specifically, the court finds equipment only qualifies as an ATDS if the dialer has the capacity to randomly or sequentially generate numbers. (Interestingly, the court gets to this conclusion with very little analysis—it just quotes the statute and moves forward.)

So things seem to be going very well for the defendant. Indeed, the facts of the case seemingly could not get any better. The call at issue was placed in a mode that literally required the agent to dial all ten numbers. The agent was part of a siloed and dedicated calling team that had no access to any “regular” dialers- they were credentialed only to use the manual mode. Indeed the agent worked in a building that was purely manual—so we have a degree of human intervention and a completely sealed environment. Doesn’t get much better than that.

But we also have a problem—the cloud. All of Defendant’s agents were given the same hardware—laptops—that had the same cloud-domain portals and apps loaded and at the ready. So the same computer used to place the calls to the Plaintiff could also have been used—by one of a handful of employees with the proper credentials—to make calls in other modes. (Weird that computers make calls these days huh?)

That raises the metaphysical question—what is a dialing “system”? Is it merely the specific dialing apparatus used to make the call at issue, or does it include the hardware that the agent logs into in order to facilitate launching the call?

Betting heavy that the answer is the former, the Defendant introduced a crush of evidence about the manual dialing mode: it presented evidence that the manual telephones use separate hardware, separate software, a separate server, separate settings, and are administered separately, and therefore constitute separate systems. That’s just what they should have done.

But in response, Plaintiff introduces evidence that every agent received virtually identical computers, including the same pre-loaded links to five9 dialing domains, and”[m]ultiple domains can be accessed from the same physical workstation” if the user has the necessary credentials.

Returning to the metaphysics, the Court concludes the jury must decide: it finds a question of fact as to whether the “system” used to make the calls includes these other five9 “ecosystems.”

And here’s the key—which I already highlighted at the start of this whole thing—the Court finds that some of these other Five9 ecosystems include dialer modes that have the capacity to randomly or sequentially generate numbers. (The court essentially entered a finding in Plaintiff’s favor on this issue determining that five9’s predictive dialer “almost certainly” had the needed capacity.) That means, of course, that a district court has just found that the dialer you are likely using qualifies as an ATDS even under the narrow non-Marks-ified statutory definition.

So yes. A district court just held that *your* cloud-based manual process may be an ATDS if all of *your* agents use the same or similar hardware with access to multiple dialing domains—even if individual agents lack necessary credentials and are siloed from agents who have them— and one of the domains used by *your* agents is a predictive dialer.

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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 Consumer Financial Protection Bureau (CFPB) settled with Financial Credit Services, Inc. d/b/a Asset Recovery Associates (ARA), a debt buyer and debt collector, over allegations that ARA threatened to take actions that it did not intend to take, including threatening arrest, litigation, garnished wages, and negative marks on the consumer’s credit report (despite the company credit reporting accounts). Other allegations include falsely representing that the company’s employees were attorneys. ARA neither admits nor denies these allegations.

According to the consent order entered on August 28, 2019, ARA will pay $200,000 as a civil penalty to the CFPB and $36,878.81 for redress to consumers. ARA must also submit a compliance plan to the CFPB within 45 days that details steps it plans to take to comply with applicable consumer protection laws and the terms of the consent order.

The Supreme Court’s landmark decision in Spokeo v. Robins, 136 S. Ct. 1540 (2016), seemingly held so much promise for TCPAWorld. After all, how could a single phone call or text message create a real injury in fact? That should seemingly put an end to abusive class action litigation where the plaintiffs command multi-million dollar settlements despite not suffering one iota of harm. But then courts got creative, and found ways of inventing harm where none really existed.

Until now. In a landmark decision, the Eleventh Circuit just dismissed a TCPA class action for lack of standing where the named plaintiff only received a single text message. See Salcedo v. Hanna, No. 17-14077 (11th Cir. Aug. 28, 2019).

In a familiar fact pattern, the plaintiff in Salcedo allegedly received a single text message, and tried to blow it up into a significant class action. The defendant responded with a motion to dismiss for lack of Article III standing. The district court denied the motion but – seeing the importance of it – certified the issue for interlocutory appeal. The Eleventh Circuit accepted The appeal and reversed, finding that the plaintiff lacked standing.

The plaintiff in Salcedo relied on the same standing arguments we see in virtually every TCPA case. That receiving and opening the text wasted his time. That both he and his phone were tied up and unavailable for other purposes. And the single text message somehow invaded the plaintiff’s right to privacy.

These type of allegations have been sufficient to survive jurisdictional motions throughout the country, but the Eleventh Circuit was having none of it. Notably, the court distinguished single-fax cases, which involved actual usage of paper, toner, and ink, and legitimately tied up a fax machine for around a minute. The court held that those type of tangible costs are simply lacking in a text case, particularly when the plaintiff did not allege that he was charged per text.

The court also noted that a text message is “qualitatively different” from a fax when it comes to intangible costs, such as tying up a machine. Fax machines, the court reasoned, are only capable of receiving one fax at a time, and it can take a minute or more for a single fax to be received. A cell phone, by contrast, can receive multiple messages at a time, and the user can access the phone’s other messages while the message is being received. Accordingly, circuit precedent conferring standing for receipt of a fax simply had no bearing on standing for receipt of a single text.

As is common in Eleventh Circuit jurisprudence, the court was also unpersuaded by Eleventh Circuit jurisprudence. The court quickly rejected Van Patten v. Vertical Fitness, 847 F.3d 1037 (9th Cir. 2017), simply stating “we find our sister circuit’s decision involving this precise issue unpersuasive.” So do we.

With no precedent to guide it, the court turned to the congressional purpose in enacting the TCPA to determine whether receipt of a single, unsolicited text message confers standing. In what became a bit of a buzzword throughout the decision, the court held: “Congress’s legislative findings about telemarketing suggest that the receipt of a single text message is qualitatively different from the kinds of things Congress was concerned about when it enacted the TCPA.” The court further noted that, because cell phones are “taken outside of the home,” they do not have the level of intrusion into home privacy that receipt of telemarketing calls to a residential line entails.

The court ultimately held that receiving a single unsolicited text message does not involve the type of harm that federal courts are empowered to address. A text message does not tie up a machine and prevent it from accomplishing other tasks in the same manner as a fax does. And it does not involve the type of invasion of private affairs that wiretapping or eavesdropping into a phone conversation involve.

Simply put, because there is no harm in any meaningful sense, the plaintiff lacks standing.

And although Salcedo is significant in its own right, the approach the court took to the TCPA could have significant implications for other lurking TCPA issues that have yet to be addressed in the Eleventh Circuit. The court was not particularly impressed with regulatory pronouncements, and instead looked to the intent of Congress in passing the TCPA – in particular, the congressional purpose on abusive telemarketing practices. That could have major implications for ATDS and First Amendment challenges, both of which rely heavily on the abusive-telemarketing purpose of the TCPA rather than the amorphous blob it has become. 

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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.

Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) published its biennial report on the credit card market. The Bureau’s report is intended to focus on the CARD Act’s impact on the credit card market. However, the Bureau notes that, due to the passage of time, such correlations are difficult to make. Because of this, future reports will focus more on the credit card market as a whole (while still discussing the CARD Act’s impact where appropriate).

Overall, the Bureau notes that the credit card market continues to grow. Outstanding balances continued to grow, ending 2018 “nominally above” pre-recession levels. The total credit line across all consumer credit cards was $4.3 trillion in 2018. Credit card applications have slightly declined since their peak in 2016.

Late payments and default rates have modestly risen since the prior report, but remain below pre-recession levels. According to the report, “Rates of credit card delinquency and charge-off have declined sharply since their peak during the recession, and remain lower than they were before the recession. Both indicators have increased slightly in recent years.”

The report also discusses debt collection and the differences between a creditor and a third-party debt collector communicating with consumers. Below are quotes from the report on specific pertinent points.

• On the use of digital servicing channels. “Cardholders increasingly use and service their cards through digital portals, including those accessed via mobile devices.”
• On collection calls. “Since the 2017 Report, issuers have lowered the range of their daily limits on debt collection phone calls for delinquent credit card accounts. Over that same period, the volume of balances settled through for-profit debt settlement companies (DSCs) grew at a faster rate than issuers’ overall accounts receivable did.”
• On communicating with consumers internally versus through third-party debt collectors. “Issuers have lowered their daily limits on debt collection phone calls for delinquent credit card accounts since the Bureau’s last report. Average daily attempts remained well below these stated limits, which is consistent with findings from the 2017 Report. Most issuers now supplement their internal collections communication strategy with email and text messages, but these channels are used primarily for account servicing and not for delivering required collections notices. Issuers’ third-party collection networks typically do not use email and text.”

insideARM Perspective

The report’s discussion on contact methods used by creditors and their third-party debt collectors is important because it relates to the Bureau’s Notice of Proposed Rulemaking for debt collection (NPRM). The report notes that creditors were able to decrease the number of collection calls by using more modern forms of communication with consumers. The report also notes that debt collectors do not typically use these same communication channels. Let’s explore that a little bit.

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Consumer preference in contact methods is the most important factor. Due to uncertainty and fear of endless class-action liability, many debt collectors have been reluctant to incorporate electronic forms of communication, such as text messages and email. In the NPRM, the Bureau aims to provide clear procedures on how debt collectors can safely begin to use these electronic communication channels. This is an incredible first step, and the Bureau should be applauded for this. With a few changes (as will be expressed in industry comments), they can help debt collectors communicate with consumers through the consumers’ preferred channels. If a creditor typically communicates with the consumer using electronic methods, it can be jarring to suddenly receive snail mail and telephone calls regarding the same account. Continuity in communication methods is essential as it increases the likelihood that the consumer will receive important information about their account.

BUFFALO GROVE, Ill.—Ceannate Corp., the only higher ed-health-tech company in the country, is happy to announce the hiring of Julie Mitchell-Barney as their VP of Higher Education Partnerships. Mitchell-Barney has nearly 30 years of experience working within Higher Education, on both the sales side of college collections and financial campus solutions from both lenders and higher education institutions. 

Julie is a consummate higher education professional and has an extensive background with both higher education institutions and revenue maximization firms in the sector. She has provided solutions in all areas from first-party servicing to third-party debt collection. Julie deeply understands the needs of higher education institutions and has created innovative solutions for her companies. At Ceannate, we expect Julie’s expertise to create key channels for distribution of the various businesses that address student success from enrollment to well-after graduation. Julie joins Ceannate because she wants to “work with a company that continuously engages across the student-wellness path and which is focused on assisting positive student outcomes.” 

Julie will handle relationships for Ceannate’s higher education institutions. These include Meta, i3 Group, and Financial Management Systems (FMS). 

About Meta

Meta is the nation’s first tele-therapy app built specifically for college students. Meta offers real-time, video counseling with licensed mental health professionals from the privacy of an Android or Apple smartphone. Meta’s mission is to circumvent the stigma surrounding mental health by offering in-need users an easy way to receive counseling without having to visit a live location. The app is free to download and sessions can be paid for through insurance or a credit card. Providers can join Meta for a small subscription fee and are able to offer Meta counseling to their existing clients as an alternative method. www.meta.app.

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About i-3 Group

Since 2009, i3 has improved loan repayment rates and reduced cohort default rates for over 2 million students at higher education institutions including community colleges, technical schools, state colleges, and large national universities. i3 today offers GradSTAT, a data collection solution to help colleges collect salary and employment data on their alumni. GradSTAT data on student employment and financial outcomes helps schools report outcomes for their students for accreditation, regulatory requirements and for institutional research. www.i-3group.com.

About FMS

FMS Investment Corp (dba Financial Management Systems) provides custom BPO solutions to both government and private sector education partners. FMS develops and executes a variety of accounts receivable management (ARM) solutions, each tailored to the individual needs of our clients, but always focused on reducing costs and increasing revenues. At all times, our service delivery centers on providing our clientele with the project management expertise necessary to best serve their consumers and program participants. www.fmsdc.com/.

ROCHESTER, NY–Throughout the month of August, ConServe employees hosted a school supply drive at their Fairport, Henrietta, and Cheetowaga offices in partnership with the Rochester Chamber of Commerce, United Way of Greater Rochester and the Jewish Family Service of Rochester (Pencils and Paper Supply Drive) and the WNY Heroes, Inc. (Operation: Backpack). Together, their employees collected more than 10 boxes filled with new school supplies on behalf of these organizations and our community.

“This school supply drive was a great opportunity for our employees to band together in helping families and students obtain the supplies they need to reach their full potential this school year,” said George Huyler, Vice President of Human Resources at ConServe. “Our employees embrace the principle of good corporate citizenship and strive to attain these goals in their daily work and personal lives – improving the human condition in our communities is part of the ConServe mission statement.” 

About ConServe
ConServe is a top-performing award-winning provider of accounts receivable management services specializing in customized recovery solutions for our Clients. Anchored with ethics and compliance, and steadfast in our pursuit of excellence, we are a consumer-centric organization that operates as an extension of our Client’s valued brand. For over 33 years, we have partnered with our Clients to give them peace of mind while simultaneously helping them achieve their goals. Visit us online at: https://conserve-arm.com/

About Pencils and Paper School Supply Drive
Pencils and Paper in partnership with The Greater Rochester Chamber of Commerce, United Way of Greater Rochester and Jewish Family Services of Rochester operates a free store to serve the educational and creative needs of children in the Greater Rochester area by providing school supplies to teachers at high poverty schools. To learn more about this program visit: https://www.pencilsandpaper.org/

About WNY Heroes – Operation: Backpack
WNY Heroes, Inc. provides backpacks filled with essential school supplies to school age children in all grades prior to the start of each new school year. These supplies allow children to have the tools they need to be successful in school. This is all possible due to the support of and donations from local businesses and sponsors. To learn more about this program visit: https://wnyheroes.org/grants-programs/back-to-school-backpack/