Everyone in TCPAWorld is familiar with the two Reyes cases. In Good Reyes, the Second Circuit held that contractual consent cannot be revoked unilaterally. Which makes sense, because contracts are binding, and you can’t back out of contractual promises at will. But in Bad Reyes, the Southern District of Florida became one of the first courts to hold that the FCC’s 2003 and 2008 ATDS orders survived ACA International. See Reyes v. BCA Fin. Servs., Inc., 2018 U.S. Dist. LEXIS 80690 (S.D. Fla. May 14, 2018). So the name “Reyes” took on a whole new meaning in TCPAWorld.

Well, Bad Reyes just became not so bad after all. The court just granted a motion to stay pending FCC action on the definition of an ATDS. Reyes, No.: 1:16-cv-24077-JG, Dkt. No. 200 (S.D. Fla. July 10, 2019).

Significantly, the court addressed the “indefinite stay” argument by saying that it may revisit the stay if the FCC hasn’t acted by January 13, 2020. Although the length of a stay should not really be a factor in the primary jurisdiction analysis, it is the favorite argument of the plaintiff’s bar. Not-so-bad-anymore Reyes provides one response to that argument that we have seen other courts and arbitrators adopt: pick a reasonable date by which the court or arbitrator can re-evaluate the stay. That way, the court or arbitrator can be assured that the case will continue to move while still providing an opportunity for the agency with primary jurisdiction to define an ATDS to weigh in.

Stay tuned, folks, we have you covered on all things Reyes – good, bad, and not-so-bad-anymore.

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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. 

A judge in the Eastern District of New York recently discussed in an opinion that Fair Debt Collection Practices (FDCPA) cases based on technicalities don’t serve the underlying purpose of the FDCPA to protect consumers.

Ocampo v. Client Services, Inc., No. 1:18-cv-4326 (E.D.N.Y. Jul. 3, 2019) centered on a claim that a collection letter did not properly identify the creditor to whom the debt was owed. The letter stated “Re: Synchrony Walmart MC” and this, according to plaintiff, does not satisfy the FDCPA’s requirement.

The court disagreed. The court reasoned that a least sophisticated consumer would not be confused by the letter since it clearly lays out that the account has been placed for collections and the letter only lists one entity that could be the creditor: Synchrony Walmart MC. Considering there was only one entity named, the court did not agree that including “Re” somehow made it more confusing.

Instead, the court states:

Even the least sophisticated consumer, armed with the knowledge that she has a Walmart credit card, is not as lacking in financial acumen as plaintiff contends, and no reasonable jury could find otherwise. If she is able to fill out the Walmart credit card application, she is able to comprehend that a reference line in a collection letter to Walmart refers to her Walmart credit card, especially when she has used it to charge thousands of dollars in purchases.

…

What possible interpretation of the name, account number, and amount due could plaintiff have besides that which was clearly intended? This is her Walmart credit card; it simply cannot be anything else. Plaintiff offers no alternative construction. If she doesn’t know that it is her Walmart credit card that is being collected, her sophistication level is below that of the least sophisticated consumer.

The court finishes off the opinion with some choice words about lawsuits such as this one, which are based purely on technicalities:

Cases like this – litigation over whether an innocuous debt collection letter is in technical compliance with the FDCPA – are far afield from the original intent behind the FDCPA. . .That is not what happened here at all. Rather, this is a “lawyer’s case,” by which I mean that it alleges a defect of which only a sophisticated lawyer, not the least sophisticated consumer, would conceive.

The consequence of such cases, according to the court, is harm to the least sophisticated consumer by decreasing access to credit.

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insideARM Perspective

As stated in Moss & Barnett’s most recent Debt Collection Drill podcast, district courts in New York are getting tired of these hyper-technical FDCPA cases. This isn’t the first time the Eastern District of New York has called out such lawsuits and how they “serve largely to facilitate debt evasion and to prop profits among the plaintiffs’ bar.”

Defending these types of cases helps the industry in two main ways. First, it establishes precedent to support other industry companies facing identical claims. (Unfortunately, that’s not always the nail in the coffin for these types of suits, as we are still seeing in New York with the Avila-esque interest disclosure cases.) Second, it brings attention to the absurdity of these suits and, as they say, sunlight is the best disinfectant. 

Debt collectors defending against hyper-technical FDCPA lawsuits by consumer attorneys commonly ask the same question: “How could the consumer possibly have been harmed by this supposed violation of the FDCPA?” The question is especially poignant when the purported FDCPA violation arises from a collection letter the consumer never read or from language in the collection letter upon which the consumer never intended to rely. Does the concept of “no harm, no foul” apply to the FDCPA?

In this episode of the Debt Collection Drill podcast, Moss & Barnett attorneys John Rossman and Mike Poncin discuss the recent ruling by the Seventh Circuit Court of Appeals in the Casillas matter dismissing an alleged hyper-technical FDCPA letter violation. They also discuss the recent ruling by the Second Circuit Court of Appeal regarding interest and share thoughts on the CFPB’s proposed debt collection rules.  

Listen here!

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The Office of Inspector General (OIG) published a report on June 3, 2019, reviewing how the Consumer Financial Protection Bureau (CFPB or Bureau) shares consumer complaint data internally and generally found that the CFPB’s Office of Consumer Response is effective at this task. The CFPB shares consumer complaint data through certain analytical tools (see the insideARM Perspective below for more information), which the Bureau’s divisions use to inform their work.

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While the report gives a positive review of the Bureau’s complaint sharing efforts, one area of concern noted by the OIG is protecting sensitive consumer data while sharing these complaints. When consumers file CFPB complaints, they often include personal and sensitive information. According to the report’s summary, “Consumer Response inconsistently approved access to two complaint-sharing tools and did not assess whether users needed continued access to one tool or to network drive folders containing complaint reports.”

Consumer Response provides training to users of this tool. Most of this training is dome with the Division of Supervision, Enforcement and Fair Lending because this group has the largest amount of users, but the report states that more training for other users would be beneficial.

The two primary recommendations from the report were to (1) enhance complaint-sharing efforts since the information is beneficial to the CFPB’s work, but also (2) strengthen access controls for sensitive data. Specific recommendations regarding the latter include evaluating access privileges of current users, ensuring that users only have access to folders needed to perform their role, and updating processes and procedures to reflect these changes.

The report notes that Consumer Response began taking action to address these recommendations.

insideARM Perspective

This report gives a behind-the-curtain glimpse at the analytical tools used by the CFPB when it comes to consumer complaints. The report notes three primary tools used by Consumer Response and other divisions at the CFPB: Complaint Analytics, Advanced Analytics, and complaint reports. Here is a graphic from the report states what each tool does.

In-depth descriptions of these analytical tools begin on page 9 of the report for those interested in learning more.  

SEATTLE, Wash. — Attunely Inc. is pleased to announce and welcome Rob Nadler as Vice President of Sales overseeing sales strategy and execution. Mr. Nadler will be responsible for leading and growing the sales function, developing new business opportunities and scaling Attunely’s customized, machine learning solutions to meet customer needs, with a specialized focus on collection agency and debt buyer markets.

“Attunely has been laser-focused on bringing together Accounts Receivable Management (ARM) industry veterans with machine learning (ML) software pioneers” said Scott Ferris, Attunely’s Founder and Chief Executive Officer. “We now have defining evidence that Attunely’s ML can significantly lift recovery revenue and liquidation rates. By placing these early performance results in Rob’s capable hands, we will continue to extend our solution across the industry”

Rob is a seasoned veteran in the ARM industry with more than 20 years of experience in ARM, debt purchase, structured finance, and consumer lending. Rob’s career track has entailed leadership positions with responsibilities over Sales, Business Development, Marketing, Servicing, Customer Service, and Operations. In addition, Rob has a proven record of building long term business relationships across the industry.

Prior to joining the Attunely team, Rob was Principal at RJN Advisors, helping ARM organizations successfully link strategic planning to tactical execution. He has also held several executive leadership roles with Javlin Capital and Sallie Mae. Rob graduated with a BS, Marketing from Ithaca College.

“I have enjoyed a successful career in financial services for over two decades, and never have I witnessed a transformative technology that requires such little investment with such impactful results. I am thrilled to be joining Attunely to collaborate with my ARM industry colleagues and friends on how we can protect and grow their business operating margins,” said Rob.

About Attunely Inc. 

Attunely is a cloud-based, yield optimization platform for the Accounts Receivable Management industry that uses machine learning to increase yield in the collection process, thus improving outcomes for creditors, lowering risk in the credit ecosystem, and facilitating a better consumer experience. 

BUFFALO, N.Y. — National Debt Holdings today announced a $5000.00 donation to the John R. Oishei Children’s Hospital in Buffalo, New York. This generous donation is part of the Company’s Corporate Charitable Giving Program and will help to provide important services to Western New York’s chronically ill children and their families.  

As the only free-standing Children’s Hospital in the state of New York, and one of only 43 in the country, the John R. Oishei Children’s Hospital is committed to providing the best care for babies, moms, and kids in Western New York and beyond. The hospital provides pediatric patients and their families with services, resources, and support that provide physical, mental, and emotional healing experiences.

“National Debt Holdings aims to make meaningful change in the communities we serve,” says President Jeremy Poehler. “We share the John R. Oishei Children’s Hospital’s vision of providing hope and health for our neighbors in Western New York, especially our most vulnerable group, chronically ill children. Our National Debt Holdings team is extremely proud to support The Children’s Hospital of Buffalo Foundation and help ensure that all children have access to the best healthcare available.”

The Children’s Hospital of Buffalo Foundation provides programs, clubs, events, and other services that enrich the lives of chronically ill children, their families, and their caregivers. Philanthropic donations, sponsorships, and events help the John R. Oishei Children’s Hospital to provide access to world-class healthcare that children need. 

For more information on how to volunteer, make a gift, or sponsor an event, please visit The Children’s Hospital of Buffalo Foundation. 

About John R. Oishei Children’s Hospital

Incorporated in May of 1892, the original Children’s Hospital of Buffalo was a two-story brick hospital that had a 12 patient capacity. Over the decades, the hospital grew and became renowned for its role in the treatment and diagnosis of polio during the 1944 and 1952 epidemics as well as the surgical correction of cleft palate and harelip which was pioneered by Dr. Sutton J. Regan, gaining the Hospital national and international recognition. Today, Oishei Children’s Hospital continues to build on its rich history and provide a culture of excellence and compassion for the children in Western New York. 

About National Debt Holdings

National Debt Holdings is a client-centric receivables management firm assisting creditors with improving their cash flow performance from account portfolios. National Debt Holdings’ team of professionals strives to provide meaningful personal relationships and develop customized financial solutions that create success for everyone while protecting the brand and reputation of clients. 

CHICAGO, Ill. –– Commercial Collection Agencies of America is proud to announce the appointment of Ms. Meg Scotty to its independent Standards Board effective immediately.  

Scotty was instrumental in forming Commercial Collection Agencies of America in 2014 and served as its President from 2014-2018.

Scotty was unanimously approved by the Standards Board.   Manny Newburger of Barron & Newburger, P.C. and Standards Board Chair, noted, “I have had the privilege of working with Meg Scotty on industry issues for many years. Her wealth of knowledge and experience will be a tremendous asset to the Board.”

Bill Balduino, Standards Board Vice Chair and President of Credit Research Foundation, added, “As an Association, Commercial Collection Agencies of America is fortunate to be supported by some very incredible and highly knowledgeable resources.  I don’t believe there to be any more proficient than our past president – welcome to and happy to have you on the Standards Board.”

The esteemed Standards Board is charged with the creation, review, and amendment of certification requirements which are met by each member agency to earn Commercial Collection Agencies of America’s Certificate of Accreditation and Compliance.  

Over the years, Scotty has gone from consulting to working for and eventually purchasing the commercial collection agency, Brennan & Clark.  She has created a fun, focused, and purposeful organization. She uses her creativity and passion for improving the status quo in just about everything to which she puts her attention.  

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Along the way, her passion for the industry led her to be involved in the Commercial Collection Agency Association as a Board member and later she became Chair.  She then championed creating the Commercial Collection Agencies of America, where she was President, and now Past President.

When asked about her appointment, Scotty commented, “I am honored to join the Standards Board of Commercial Collection Agencies of America and look forward to working with this Board.”

“Meg has been a driving force to establish an Association which ensures that the credit industry is protected, and the collection industry is elevated.  Her dedication is admirable. She will be an excellent addition to her peer group of esteemed Standards Board colleagues,” noted Annette M. Waggoner, Executive Director of Commercial Collection Agencies of America. 

The Standards Board meets periodically and will have its next in-person meeting at the organization’s annual conference of agency members, affiliate members and guests in Delray Beach, Florida October 24-26, 2019.  

A list of certified agencies and affiliate members can be found at www.commercialcollectionagenciesofamerica.com.

To contact the Commercial Collection Agencies of America, email Executive Director, Annette M. Waggoner at awaggoner@commercialcollectionagenciesofamerica.com or info@commercialcollectionagenciesofamerica.com.

The Consumer Financial Protection Bureau (CFPB or Bureau) and Freedom Debt Relief, LLC (Freedom) reached a $25 million settlement in the Bureau’s lawsuit against Freedom. The settlement brings a year and a half of litigation against the nation’s large debt-settlement services provider to a close.

The CFPB filed its suit in November 2017, alleging that Freedom charged consumers without settling their debts as promised, made consumers negotiate their own settlements, mislead consumers about its fees and the reach of its services, and failed to inform them of their rights to funds they deposited with the company.

The Stipulated Final Judgment, entered by the court on July 9, 2019, lays out the agreement by the parties. Freedom agreed to pay $20 million in restitution to consumers and $5 million as a civil money penalty. The judgment also enjoins Freedom from engaging in similar conduct in the future. Specifically, the judgment:

• Prohibits Freedom from misrepresenting that any present creditors will negotiate settlements directly with the company and that the company can negotiate or settle debts.
• Prohibits Freedom from charting fees for non-settlement outcomes.
• Requires Freedom, before a consumer enrolls in its services, to prominently disclosure consumer involvement in settlements and that the consumer is entitled to receive all funds in their settlement account if the consumer withdraws from the program.

insideARM Perspective

Debt settlement companies and credit repair organizations are no strangers to debt collectors. Collection agencies and firms have daily interactions with each organization, so the industry is following the legal proceedings against these entities closely. There seems to be no shortage of activity. Just the other day insideARM reported a jury verdict that found Lexington Law, a credit repair organization, committed fraud in its scheme of mailing large volumes of dispute letters to collection agencies. Lexington Law is also the target of a lawsuit brought by another agency for similar conduct, and of a lawsuit by the CFPB for its practices when engaging with consumers.

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All of this brings to view something that is often lost in the weeds: the debt collection ecosystem is dynamic. “Good guys” and “bad guys” exist on all sides of the sphere; blanket labels based simply on what side of the aisle a company sits are not the right answer and turns a blind eye to the situation at hand. As the comments to the Notice of Proposed Rulemaking begin coming in, this is something to keep in mind.

COLUMBUS, Ohio — Estate Information Services, LLC (EIS) of Columbus, Ohio announced on Tuesday that it has gained official certification as a Women-owned Business Enterprise (WBE) by the National Women Business Owners Corporation (NWBOC), the nation’s first third-party certifier of women-owned businesses in the United States. 

“EIS is extremely proud of this certification”, says J.C. Gunnell, EIS’s Founder, CEO, and Chair of the Board. “We have always been a women-owned business and have always been at the forefront of promoting diversity within our business. While obtaining our WBE certification doesn’t change the premium services we deliver, the formal designation helps our partners meet or exceed their diversity supplier goals.” 

NWBOC’s national standard of certification includes an in-depth review of the business, interviews, and an on-site inspection. By including women-owned businesses among their suppliers, corporations and government agencies demonstrate their commitment to fostering diversity and the continued development of their supplier diversity programs.

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About Estate Information Services 

As a proven leader in the ARM industry for over 20 years in both recoveries and compliance, Estate Information Services (EIS) has been recognized as an industry leader in deceased account management. EIS has developed innovative processes and probate tools enabling consistent success in the recovery of probate collections and specialty debt recoveries. EIS has engineered a robust operational structure in order to achieve peak performance and maximum optimization. We leverage our vast probate knowledge, call center experience, and technology assets to push the boundaries of operational and compliance excellence. 

The Federal Communications Commission (FCC) has formally announced comment deadlines for its Third Further Notice of Proposed Rulemaking (FNPRM) regarding advanced methods to target and eliminate unlawful robocalls. The agency approved the proposal on June 7, 2019. Among other things, the FNPRM proposes a safe harbor for call blocking programs targeting unauthenticated calls, which may be spoofed, and safeguards to ensure that “critical” calls are not blocked.

Initial comments are due by July 24, 2019, with the reply comments due by August 23, 2019.

As previously reported by TCPAWorld, the FNPRM specifically seeks comment on “what numbers should be required on a Critical Calls List.” This would be a list of numbers maintained by any voice service provider that offers call-blocking that could not be blocked, so long as the calls were authenticated.

The FNPRM proposes that the list would include “at least the outbound numbers of 911 call centers (i.e., PSAPs) and government emergency outbound numbers….” But the FCC also “recognize[s] that other calls are important to consumers,” citing “calls from schools, doctors, local governments and alarm companies, as well as fraud and weather alerts….” The FNPRM also mentions calls from “recall centers, hospitals and flight alerts.”

The agency issues an open invitation by asking, “[s]hould we expand the scope of the Critical Calls List to include any or all of these Categories (or any others)?”

Now is your chance TCPAWorld. Again, initial comments are due by July 24, 2019, with reply comments due by August 23, 2019.

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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.