ROCKVILLE, Md. — The iA Institute and insideARM announce a new name, new brand and new focus for Women in Consumer & Commercial Finance (December 11-13 in Scottsdale, AZ).

As the new name and brand implies, insideARM’s premier event for women’s professional development and network building has expanded to include executives from commercial finance.

According to the conference chair, Amy Perkins, the addition of commercial finance executives will only make the event better for all attendees.

“We’re expanding our reach and making a bigger tent,” she said. “We think this change will be great for the event and great for all the attendees. We’ll have a larger pool of like-minded women which means a bigger network for everyone. Plus, it means we can invest more in our women’s initiative through additional year-round support and activities.”

About Women in Consumer & Commercial Finance

Women in Consumer & Commercial Finance 2019 is for professional women working in consumer or commercial finance at ALL levels. The event combines industry-specific professional development with the richest networking environment of any industry event. This is not just an event where you listen to women talk ABOUT women’s issues… it’s an event designed to get you engaged and working together ACTIVELY to move women’s careers forward. Look out for more news and announcements regarding Women in Consumer & Commercial Finance at the event site: wccf.insidearm.com

And, if you haven’t already, please sign up for the event, December 11-13 in Scottsdale, AZ, or pass this release along to someone who might be interested.

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About the iA Institute

The iA Institute (iA) is a media company that produces handcrafted news, education, events and connection for the consumer and commercial credit & collections industry. The iA team believes that the value of your investment in our content should be undeniable, so we thoughtfully design everything we do with a focus on the details that make a difference.

iA manages insideARM, the iA Research Service, the Best Places to Work in Collections program, the Consumer Relations Consortium (CRC) & Innovation Council, and events like the Commercial Strategy Workshop, the First Party Summit and Women in Consumer & Commercial Finance. Learn more about iA here.

Last week on May 24, 2019, Rep. Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, released a calendar of June hearings. The calendar includes a hearing on June 25 at 10:00 AM Eastern entitled, “Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices.” The hearing will be broadcast live on the Committee’s website.

The calendar does not state what specific legislation the Committee will discuss, but this hearing comes on the heels of two activities in Washington related to debt collection and the Consumer Financial Protection Bureau (CFPB), which is one of the main regulators for the industry. First, the House of Representatives passed the Consumers First Act last week. The purpose of this Act is to “block the Trump Administration’s anti-consumer agenda and reverse their past efforts to undermine the mission of the Consumer Financial Protection Bureau.” Second, the CFPB released the long-awaited Notice of Proposed Rulemaking for debt collection earlier this month.

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The calendar also schedules a hearing for the two task forces announced earlier this month. The Task Force on Financial Technology will convene on June 25 at 2 PM Eastern, and the Task Force on Artificial Intelligence will convene on June 26 at 2:00 PM Eastern.

insideARM Perspective

When Rep. Waters became Chairwoman of the House Financial Services Committee, she pledged to make the CFPB her focus. Thus far, she has kept to her word. In addition to getting the Consumers First Act through the House of Representatives, Chairwoman Waters sent a letter to CFPB employees urging them to be whistleblowers if they notice anything suspicious, sent a letter to Director Kathleen Kraninger questioning the lack of restitution to consumers in recent settlements between the CFPB and financial services companies, and grilled Director Kraninger during a House Financial Services Committee hearing. We all now await this next hearing to get details about this proposed legislation.

Continental Service Group, Inc., d/b/a ConServe, prides itself on being a committed community partner. Giving back, positively impacting people’s lives, and empowering others to take control of their financial obligations in ways that preserve their dignity are among the team’s goals and priorities. Employees embrace a “consumer-centric” perspective and regularly go above and beyond in their efforts to Foster Financial Freedom.  In the month of May, ConServe generously donated to the Habitat for Humanity Buffalo, Flower City Habitat for Humanity, Willow Center, and the Haven House.

Their company-wide Jeans For Charity program allows both the employees and the organization as a whole to support a wide range of community investment efforts, thereby engaging and inspiring employees, while also reinforcing ConServe’s mission to ‘improve the human condition.’  George Huyler, PHR, Vice President of Human Resources at ConServe said, “I am always very impressed by the commitment of our employees to our community. More than 500 of our employees donated to this program in the month of May.”

“We are so grateful to have been chosen as ConServe’s May philanthropy recipient. Donations like these help us provide life-saving programs free of charge such as our 24/7 hotline (222-SAFE), Court Advocacy Program, HEAL collaborative at Strong Memorial Hospital, Mobile Advocates, individual and group counseling sessions, and our 49-bed shelter located here in Monroe County at The Shill Family Building. Support like yours is crucial to making sure that we can meet survivors wherever they need us in the community. Thank you for helping us support all those seeking to live a safe and empowered life,” said Meaghan de Chateauvieux, President and CEO of Willow Domestic Violence Center.

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Lauren Gorlick, Community Relations Coordinator at Haven House said, “Domestic violence is the most underreported crime. Since 1979, Haven House has served over 29,000 women, children and even men who flee from abusive situations to our shelter which is in an undisclosed location. Not only do survivors receive shelter, meals throughout the day and individual counseling, but they can also elect to participate in group counseling, art empowerment, court advocacy, and pet therapy! At any given time, our shelter may be full and generally, 50% of our residents are under the age of ten.  It is ironic that ConServe chose to support Haven House in May as it was May 14, 1979, that Haven House first opened its doors – 40 years ago! This donation will continue to ensure that our programming runs smoothly for the future clients we will serve.”

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 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 at www.conserve-arm.com

About ConServe’s Jeans For Charity program:

ConServe’s Jeans For Charity initiative began in 2008 when the team’s employees had an idea to launch a program that would provide a way for the company’s mission of “improving the human condition” to coordinate with the organization’s commitment of giving back to their community.  ConServe employees are given the opportunity to participate in monthly charitable donations, benefitting a wide range of recipients, 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 $936,027 to local community organizations.  

About Habitat for Humanity Buffalo:  

Since 1985, Habitat for Humanity Buffalo has assisted 308 families in achieving their dream of homeownership. Families in Habitat Buffalo’s homebuyer program are able to purchase a decent, safe, affordable home. This is attainable for low-income families because Habitat Buffalo subsidizes the cost of the house through grants, donations, and volunteer labor. The homebuyer repays an interest-free, 30-year mortgage, which supports the Fund for Humanity, a revolving account used to build additional home.

About Flower City Habitat for Humanity:

Flower City Habitat for Humanity is a non-denominational Christian housing ministry dedicated to eliminating substandard and poverty housing in Rochester, NY. Since 1984, Flower City Habitat for Humanity has built or renovated over 200 homes and is one of the largest Habitat affiliates in the northeastern United States.  Habitat for Humanity brings people together to build homes, communities, and hope. Visit them online: www.rochesterhabitat.org

About Willow Center:

Willow Domestic Violence Center (formerly Alternatives for Battered Women), has provided support to meet this need in our community for 40 years. Willow’s comprehensive range of services includes a 49-bed Emergency Shelter, 24/7 Crisis Hotline, Counseling Center, Children’s Program, HEAL Collaboration with Strong Hospital, and Court Advocacy Program at the Hall of Justice. Willow provides support to over 7,500 survivors of domestic violence each year and reaches an additional 15,000 individuals through prevention education annually. Willow has been embedded in the Rochester community for 40 years—a safe place for families fleeing violence and a place to find hope and healing.  Our trauma-informed approach helps us to meet survivors where they are physically and emotionally to support them on their journey to a safe and empowered life. Visit them online:  https://willowcenterny.org/

About Haven House:

Haven House is the only domestic violence shelter in Erie County. The primary mission of Haven House is to interrupt the cycle of domestic violence and provide community-based services to adult and child victims. Emergency shelter and supportive services have been provided to over 28,289 adults for 40 years since the organization first opened its doors on May 14, 1979.  Visit them online: https://www.habitatbuffalo.org/about-us/

Editor’s Note: This article initially appeared on the Noble Systems blog and is republished here with permission from the author.

The FCC is addressing a robocall-related agenda item entitled Declaratory Ruling and Third Further Notice of Proposed Rulemaking (FCC-CIRC1906-01) at its upcoming meeting on June 6, 2019. This document includes two aspects, the first being a Declaratory Ruling that would allow carriers to block “robocalls” to their customers, by default, after determining such calls are unwanted and/or illegal. The carriers are expected to employ analytics-based algorithms for determining whether such calls are robocalls. The second item is a Notice of Proposed Rulemaking proposing a safe harbor for carriers blocking calls by targeting potentially spoofed calls identified using the “SHAKEN/STIR” standards.

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What’s in the ruling?

The Declaratory Ruling allows carriers to 1) block calls appearing to be illegal by use of analytics algorithms and, 2) “whitelist” numbers in a consumer’s contact list. It also reminds voice service providers that protecting emergency communications is paramount. The exact scope of “emergency communications” is not defined, but it includes calls from public safety entities, including PSAPs, emergency operation centers, or law enforcement agencies.

Presumably, this may even include emergency communications from schools. Would an automatic notification to a parent from their child’s school regarding a canceled after-school event be considered an emergency communication? What about an automatic notification that the child is not attending school today, and may be truant or missing? What about an automatic notification of a school emergency, such as a school shooting?  All these calls may originate from the same number. How can these be distinguished and properly categorized? Or, consider a power-outage notification call that informs affected residents of the expected power restoration time? Some may not consider this by itself to be an emergency call, but if you are a caregiver for an elderly parent dependent on a portable oxygen generator, knowing how long the oxygen generator will be out-of-service is critical information, and may be considered an emergency communication.

Public safety concerns

The Declaratory Order creates an obvious, fundamental public safety issue. It does not define which types of calls and their telephone numbers are emergency communications. Second, it presumes that carriers will create a whitelist of such numbers that are not to be blocked. While the complete list of such numbers is unclear, certain numbers for local public safety, school, and police are easily identifiable to anyone with an Internet connection.

Thus, these numbers are easily discoverable by scammers. Once scammers start to spoof public safety numbers, our public safety is at risk. If such calls cannot be blocked, then scam calls masquerading as public safety numbers will dilute the effectiveness of ‘real emergency’ calls. If such calls are blocked, then the Declaratory Order will be violated. It is fundamentally unclear how carriers would comply in this situation.

“First, do no harm”

By passing this Declaratory Order, the Commission creates a public safety risk. It is unclear whether the Commissioners voting on this have considered this risk and have a solution. I asked one senior FCC staff member a year ago: What will the FCC do if scammers start to spoof numbers from the FCC? I did not receive an adequate answer. Now, it is time to ask the Commissioners who are voting on this item: What will the FCC do when scammers start spoofing public safety numbers? This Declaratory Order was hastily drafted and made available only recently, and it may very well cause more harm than good.

The Commission should recast the Declaratory Order as a Notice of Proposed Rulemaking. This would allow the Commission to solicit more comments on the impact of this Order, and understand why an implicitly defined whitelist is not a solution to the robocall problem. We do have a solution being developed, namely a new technology called “SHAKEN & STIR”. But, until that technology is in place, the FCC should not pass the Declaratory Order, and certainly not at the June 6 meeting. The FCC should consider applying the rule from the Hippocratic Oath: “First, do no harm.”

The opinions presented here are those of Karl Koster, and not necessarily those of Noble Systems. The contents should not be construed as legal advice nor as comments reflecting any regulatory position of Noble Systems.

The written dispute requirement issue and whether a validation notice that tracks the language of section 1692g is somehow violative of the Fair Debt Collection Practices Act (FDCPA) is a hot button—and divisive—issue within the Third Circuit.

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In New Jersey, some decisions are stating that a letter containing the validation notice is fine as written, specifically when the invitation for the consumer to call the debt collector does not indicate that the call can be related to a dispute. Other judges in New Jersey are taking issue with including the word “if” in the validation notice—which, we might add, is the word used in the FDCPA itself. Judges in the Eastern District of Pennsylvania are finding that the sentence stating “unless you notify this office within 30 days that you dispute the validity of this debt,” without stating that the consumer must dispute in writing, does not accurately reflect the Third Circuit’s requirement that all disputes must be in writing.

But now there is some relief, at least in litigation management and defense costs for debt collectors. In Azizbayev v. Transworld Systems, Inc., et al., No. 19-cv-5399 (D.N.J. May 23, 2019) (alleging that a validation notice that tracks the statutory language of the FDCPA omits the written dispute requirement), the District of New Jersey stayed the case pending the Third Circuit’s resolution of the issue. The Azizbayev decision cites Judge Wigenton’s recent action of certifying an order on this issue for interlocutory appeal.

insideARM Perspective

Why is this good news for debt collectors that are defending these claims? There are several reasons.

First, once the court stays a case, defense expenses are minimal since the case is effectively inactive until the court lifts the stay.

Second, once one judge agrees to stay the case, their decision can be cited to persuade other judges to do the same. District courts have very busy dockets, so judges usually are happy when there is a reason to put a pin in a case, especially if a higher court’s decision could lead to the case leaving their docket altogether.

Third, if debt collectors are successful in staying these cases (which indicates the tide is changing on this issue), more debt collectors will consider litigating the issue rather than paying out quick settlements to opposing counsel. Will this choke out these claims altogether? No, but it does starve out a quick payday and increases the risk to opposing counsel for bringing high volumes of these claims. It might not be the silver bullet to the litigation dilemma in this industry, but it’s certainly a step forward.

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

The U.S Court of Appeals for the Eighth Circuit recently affirmed dismissal of a consumer’s suit against a debt collector, alleging that its collection letter violated the federal Fair Debt Collection Practices Act.

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In so ruling, the Court concluded that the debt collector’s use of the term “PROFESSIONAL DEBT COLLECTORS” and the initials of its “doing business as” name would not mislead or deceive an “unsophisticated consumer,” and the letter’s inclusion of a signature of an individual not registered to collect debts in Minnesota was irrelevant and did not violate section 1692f, because the collection company and two other signatories were duly licensed to engage in debt collection activities in Minnesota.

A copy of the opinion in Klein v. Credico Inc. is available at: Link to Opinion.

In March 2017, a debt collection company mailed a consumer a collection letter under its ‘d/b/a’ name, which appeared in the top right corner of the collection letter, several lines above the words “PROFESSIONAL DEBT COLLECTORS.”

The letter warned the consumer that if the outstanding debt was not paid and if it became necessary to file a lawsuit to collect the debt, “it could result in a judgment . . . and that judgment could include . . . pre-judgment interest.” The letter was signed by three individuals — one of whom was not registered to collect debts in Minnesota where the consumer received the collection letter — above instructions for the consumer to pay online or correspond with “CCB” (the initials of the collector’s business name) at its website.

The consumer filed suit alleging that the collection letter’s inclusion of the phrase “PROFESSIONAL DEBT COLLECTORS” and the “CCB” acronym, rather than the collector’s true name violated subsection 1692e(14) of the FDCPA, 15 U.S.C. 1692, et seq., which prohibits the use of false, deceptive or misleading representations, including the use of any business, company or organization name other than the true name of the debt collector.

The consumer further alleged violations of subsection 1692f for the collection letter’s inclusion of a signatory not registered to collect debts in Minnesota, and its attempt to collect prejudgment interest purportedly not recoverable under Minnesota law.

The collector moved to dismiss the complaint. The trial court granted the motion, concluding that the use of “PROFESSIONAL DEBT COLLECTORS” and “CCB” was not false or misleading when viewed through the eyes of an unsophisticated consumer, and was immaterial. The trial court further held that the inclusion of the signature of an individual who was not registered to collect debts in Minnesota and assertion that the collector could seek pre-judgment interest did not violate the FDCPA. The instant appeal followed.

On appeal, the Eighth Circuit first evaluated whether the collection letter’s use of “PROFESSIONAL DEBT COLLECTORS” and “CCB” was false, misleading or deceptive through the eyes of an ‘unsophisticated consumer.’ Peters v. Gen. Serv. Bureau, Inc., 277 F. 3d 1051, 1055 (8th Cir. 2002).

The Eighth Circuit held that the trial court correctly determined that an unsophisticated consumer would understand that these terms referenced the collector because (i) “PROFESIONAL DEBT COLLECTORS” clearly described what collector (and its d/b/a) is, and; (ii) “CCB” is a commonsense abbreviation of the collector’s other registered name that it used in the collection letter. The Court further noted that the collection letter included the collector’s correct registered name and contact information, and the balance due on the debt.

The appellate court next considered the consumer’s argument that the collection letter’s inclusion of an individual’s signature who was not licensed to engage in debt collection activities in Minnesota violated subsection § 1692f(1) of the FDCPA, because “Minnesota law requires all individual debt collectors to obtain licenses as a prerequisite to collecting consumer debts in Minnesota.” See Minn. Stat. 332.33. As you may recall section 1692f prohibits the use of “unfair or unconscionable means to collect or attempt to collect any debt,” and subsection 1692f(1) prohibits “[t]he collection of any amount . . . unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”

Primarily, the Eighth Circuit noted that the FDCPA “was not meant to convert every violation of a state debt collection law into a federal violation.”  Carlson v. First Revenue Assur., 359 F. 3d. 1015, 1018 (8th Cir. 2004). The appellate court agreed with the trial court that the consumer failed to state a 1692f(1) claim because the other two signatories were registered to collect debt in Minnesota, as was the collector; thus, the inclusion of the unregistered individual’s signature did not constitute an “unfair or unconscionable means to attempt to collect a debt.”  15 U.S.C. 1692f.

Lastly, the appellate court rejected the consumer’s argument that the collection letter impermissibly attempted “to collect prejudgment interest” under Minn. Stat. 549.09 in violation of section 1692f, because the collector instead sought recovery under Minn. Stat. 334.01, which “does not prohibit” recovering pre-judgment interest. Hill v. Accounts Receivable Servs., LLC, 888 F. 3d 343, 346 (8th Cir. 2018) (affirming dismissal of consumer’s 1692f claims because the text of § 334.01 does not prohibit the recovery of statutory interest in conciliation court cases, thus, debt collector did not attempt to collect amounts not permitted by law).

Last week I was invited to attend a reception event on Capitol Hill hosted by RIP Medical Debt (RIP), a nonprofit that buys and forgives medical debt without tax consequence. The event was called “A Call to End Medical Debt.” Co-Founder Jerry Ashton said their initial goal is to abolish $1 billion in medical debt. He reported that since inception, the group has forgiven $750 million. 

RIP works with individual donors, philanthropists and organizations to purchase medical debt for pennies on the dollar to provide financial relief for those burdened by impossible medical bills. Founded in 2014 by two former collections industry executives, Craig Antico & Jerry Ashton, RIP rose to national prominence on an episode of HBO’s “Last Week Tonight” with John Oliver in which RIP facilitated the abolishment of $15M in medical debt.

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You may recall that we’ve written about this organization in the past. Most recently, in November 2018 the group announced a national campaign to forgive $250 million in medical debt across the country during the holiday season. Much of RIP’s recent work has been accomplished through local campaigns led by churches or news organizations to raise funds to forgive debt within the community.

The organization has picked up steam – and supporters – since I last looked. Approximately 45-50 people attended last week’s Capitol Hill event, including congressional staffers, medical industry, AARP, collections industry leaders, veterans, advocates, and media. 

Worth noting is that RIP has a focus, though not exclusive, on medical debt held by veterans. Two of the reception attendees were veterans who shared facts they said many are unaware of. For instance, it is not uncommon for veterans to have medical expenses that are not covered by the Veterans Administration. This causes issues not only for the veterans but for their caretakers who may also be out of work. In fact, one of the speakers said, there is currently $6 billion in unpayable veterans’ medical bills. According to RIP’s website, so far they have forgiven over $50 million in veteran debt.

Ashton said they select debt pools that represent consumers with income at twice the national poverty level or below, or insolvent, or paying at least 5% of household income in debt. At this time they can only forgive the debts of consumers as a group; they are not yet able to handpick individuals. RIP says that because “the forgiveness is a gift from a detached and disinterested third party as an act of generosity, forgiveness does not count as income to the debtor.” No 1099-C is filed with the IRS.

Congressman Joe Morelle (D-NY) opened the session and spoke about his work on surprise medical bills. (insideARM has covered this topic as well; read the latest here.) His staff later tweeted this, with a photo of the Congressman with RIP founders Craig Antico, Jerry Ashton, and Robert Goff:

Oregon Congressman Earl Blumenauer also dropped by, and staffer for congressman Van Taylor (R-TX) was there for the full evening. The idea of abolishing medical debt may be one of the rare issues with bi-partisan support.

You can click here if you’d like to make a tax-deductible donation of any amount to RIP or to learn about starting a local campaign.

You can click here to buy the RIP founders’ latest book, End Medical Debt (royalties go to forgiving debt). The book delves into the most popular proposed solutions to skyrocketing healthcare costs — repealing and replacing the Affordable Care Act, insurance reform, drug price controls, adding a Medicare Option to the ACA for those over age 50 or 55, and Medicare-for-All (single-payer universal healthcare) — and concludes with a call for an American Medical Debt Commission that reports to Congress annually about the national medical debt crisis.

insideARM Perspective

There was a lot of skepticism from the ARM industry about this initiative when it emerged. I will say that from what I can see after five years, the intentions are pure, the approach is creative, the group is truly helping people, and they have gotten the attention (and partnership) of some very credible individuals and large organizations. Given that the criteria is to identify those with the greatest need, it seems to me that this initiative could be viewed as complementary to the debt collection industry, which is not served by attempting to collect from those who truly cannot afford to pay.

As we reported at the time, FCC Commissioner O’Rielly gave a stirring address to a crowd attending an event in Washington D.C. last week. The speech offered a brave defense of legitimate business caught up in the false and unfair anti-robocall narrative and ensnared by often-frivolous and unfair TCPA suits seeking millions or billions in penalties for simple phone calls made—in many instances—to numbers provided by consenting customers.

As a sitting FCC Commissioner, O’Rielly’s speech offered a remarkable rebuke to courts that continue to misapply the TCPA and he offered a clear roadmap to Defendants wishing to leverage the pending Public Notice proceeding regarding the scope of the TCPA to stay litigation.

Here’s how to use it.

Take Away One: Courts Should Not be Trampling on the FCC’s Primary Jurisdiction to Interpret the TCPA

Commissioner O’Rielly clearly and specifically decries the “patchwork” approach taken by district courts following ACA Int’l. His words: “Unfortunately, the DC Circuit [Court of Appeals] victory did not stem that tide, as a patchwork of interpretations by both federal circuit and district courts flowed in response…”

When ACA Int’l was handed down TCPAWorld indeed had high hopes for clarity—especially around the crucial definition of ATDS. But the D.C. Circuit Court of Appeals stopped short of offering its own definition of the phrase, apparently leaving courts to sort it out for themselves. Except, it didn’t. What the D.C. Circuit Court of Appeals actually did was issue a mandate sending the issue back to the FCC for further proceedings. And it was that mandate that led to the Public Notice the FCC Issued last May.

But rather than respect the FCC’s primary jurisdiction to define the term ATDS—and address the other issues raised by the Public Notice—following the ACA Int’l remand, courts have—by and large—imprudently rushed ahead and offered their own individual interpretations of the TCPA. This has led to the patchwork mess Commissioner O’Rielly decries. His message, therefore, is clear: the Courts should stand down and allow the FCC to do its work as ACA Int’l directed it to do.

TCPA defendants facing litigation should take this admonition to heart. By presenting this FCC Commissioner’s words to a Court they should argue that individual judges must not “take a stab” at interpreting the statute for themselves—thus adding to the “patchwork” mess that has lead TCPAWorld.com to create a rolling ATDS review—but should defer to the FCC’s expertise and fact-finding and policy-making abilities and stay cases requiring a determination of the meaning of, inter alia, ATDS.

Take Away Two: FCC Commissioner O’Rielly Believes the D.C. Circuit Court of Appeal Set Aside the FCC’s Earlier Rulings

When an FCC Commissioner tells you that his own Commission’s previous rulings are now defunct that is pretty powerful stuff. Remarkably that is just what Commissioner O’Rielly did in his speech when he called court rulings that continue to follow the FCC’s 2003 and 2008 rulings post-ACA Int’l “illogical.”

Unsurprisingly, the good Commissioner is on solid legal footing when he opined that the 2003 and 2008 Predictive Dialer rulings from the FCC are no longer in effect. The ACA Int’l ruling very clearly found the 2003 and 2008 Predictive Dialer rulings inconsistent with the FCC’s later 2015 Omnibus ruling on the crucial issue of what functionalities an ATDS must perform to qualify under the statute. This recognized inconsistency—coupled with the ACA Int’l court’s express refusal to decline review of the earlier rulings—lead the Court to strike down the Omnibus as inconsistent with reasoned decision-making.

But inherent in that determination was that none of the FCC’s ATDS rulings remain valid since they were previously in conflict with one another. Striking down the one interpretation does not—as some courts have “illogically” found—reinstate the earlier superseded interpretation. Most courts have now recognized—as has the Ninth Circuit Court of Appeals in Marks—that the 2003 and 2008 rulings are defunct—but that doesn’t stop Morgan & Morgan and other law firms from arguing otherwise.

Maybe an FCC Commissioner’s direct and clear assessment of the matter will help change some minds. TCPA Defendants should not be shy in offering O’Reilly’s remarks in support of their briefing on these critical issues.

Take Away Three: FCC Commissioner O’Rielly Believes the Marks ATDS Definition is “Extremely Misguided”

After labeling ATDS decisions following the 2003 and 2008 predictive dialer rulings as “illogical” Commissioner O’Rielly makes clear that cases following Marks are even worse. As he puts it, those decisions “pale[] in comparison to the medley of courts that have chosen to ignore the DC Circuit and instead follow the [Ninth Circuit Court of Appeals’] extremely misguided and breathtakingly expansive definition of ATDS as a device that stores numbers to be called, irrespective of whether they have been generated by a random or sequential number generator.  (Statutory text?  What statutory text?)”

Wow. That is just a breathtaking critique of a Ninth Circuit Court of Appeals decision. Still, Commissioner O’Rielly is correct to point out that Marks ignores critical statutory language—that requiring the use of a random or sequential number generator—and re-writes the statute in a new and extremely expansive fashion. While a defense lawyer might be sheepish to characterize the Marks decision in such harsh and direct terms before Court—allowing an FCC Commissioner to make that critique for you is a remarkable asset.  Every Defense motion addressing ATDS issues outside of the Ninth Circuit footprint should absolutely include Commissioner O’Reilly’s quote and remind the court that the view from D.C. looks quite different than the view on the Pacific.

Take Away Four: You Must Must Must Get To the FCC and Raise your Voices

Commissioner O’Rielly delivered a clear message to TCPA defendants—if you don’t take action to advocate for TCPA reform you cannot expect the FCC to take action for you. Indeed the Commissioner states directly that FCC action will not be possible until industry “raise[s] awareness of the need for corrective actions to a much, much greater extent.”

Indeed the Commissioner hammered home this message again and again—industry participants must act to demand TCPA reform or expect an empty bowl: “It’s your job to convince my colleagues and agency staff to [reform the TCPA]…  It will take extensive cooperation and collaboration with everyone else caught in the TCPA spider web, screaming the same message at the same fever pitch.”

Again this is a remarkable entreaty from a sitting FCC Commissioner for TCPA defendants to raise their voices before the Commission—get up and get out to Washington to advocate for reform.

Indeed, for TCPA defendants this is the greatest take away from the speech. You have already been sued. The TCPA is plainly impacting you. If you are waiting for the FCC to clarify the statute in a helpful manner—stop waiting and start advocating.  By filing a petition with the FCC you can have the Commission consider the unique circumstances of your case and likely earn a stay of proceedings in the meantime. Even if you do not want to file a formal petition, Squire Patton Boggs can assist you to advocate for TCPA reform in connection with the already pending TCPA Public Notice. It’s a fairly quick yet powerful exercise that will help assure your voice is heard. And as Commissioner O’Reilly emphatically urges—your voice must be screaming along with all the rest for change to happen.

If you have the courage, we have the know-how. Let’s show ‘em what we’re made of TCPAWorld.

—

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.  

With a 231-191 split along party lines, the House passed the Consumers First Act on Wednesday, May 22.

Congresswoman Maxine Waters (D-CA), Chair of the House Committee on Financial Services, introduced the legislation to “block the Trump Administration’s anti-consumer agenda and reverse their past efforts to undermine the mission of the Consumer Financial Protection Bureau,” per a statement released by the Committee.

Democrats are seeking to strengthen consumer protections they feel were weakened when Mick Mulvaney, current Director of the Office of Management and Budget and past acting director of the CFPB, oversaw the Bureau.

“Putting Mick Mulvaney in charge of the consumer financial protection bureau was the epitome of a fox guarding the hen house,” Representative Carolyn Maloney said in House floor speech, “so we have to undo all of the damage he did while he was acting director of the CFPB.”

It’s a potentially small victory for House Democrats. The Consumers First Act will have a tougher time passing the Republican-controlled Senate, and even if that were to happen, Trump has promised to veto the bill should it cross his desk.

insideARM Perspective

We’ve followed the Consumers First Act from the beginning, up through its passage through the House Financial Services Committee.

The Bureau is a highly-politicized entity, and will likely be a lightning rod for administrations going forward. Republicans position the Bureau as anti-business, and continually seek to defang it. Democrats see empowering and protecting consumers—regardless of the burden placed on legitimate business acting in good faith— as necessary in a landscape seemingly fraught with fraud and scams.

We’ll follow the Consumers First Act as it makes its way through the process, but, as noted above, it’s unlikely to get very far with the current president’s “veto” stamp at the ready.

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

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The Appellate Court of Illinois Fifth District affirmed the dismissal of a borrower’s alleged putative class action alleging that the successor to a credit card issuer violated various state and federal laws when it filed suit to collect the debt past the four-year statute of limitations for the sale of goods under the Illinois version of the UCC (810 ILCS 5/2-725).

In so ruling, the Appellate Court held that the issuer properly filed suit within the five-year statute of limitations that applies to credit card agreements under 735 ILCS 5/13-205.  In addition, the Appellate Court ruled that advancing money to pay for merchandise constituted a loan governed by the five-year statute of limitations for credit cards.

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A copy of the opinion in Midland Funding LLC v. Schellenger is available here.

In 2012, a borrower defaulted on a credit card usable only to purchase goods at one retailer. In 2017, more than four years but less than five years after the default, the issuer filed sued against the borrower to collect the debt.

In response, the borrower filed a three-count class action counterclaim against the issuer alleging that the debt was time-barred because the four-year statute governing contracts for the sale of goods under section 2-725 of the UCC applied. Based on this claim the borrower alleged the issuer violated the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., and the Illinois Collection Agency Act, 225 ILCS 425/1 et seq.

The issuer moved to dismiss arguing that it timely filed the complaint because the five-year statute of limitations contained in 735 ILCS 5/13-205 that governs credit card agreements controlled.

The trial court granted the motion to dismiss and this appeal followed.

The Appellate Court began its analysis by observing that Harris Trust & Savings Bank v. McCray, 21 Ill. App. 3d 605 (1974), addressed “whether a credit card issuer may commence an action based upon the holder’s failure to pay for the purchase of goods more than 4 years after the issuer’s cause of action accrued.”

The Harris Trust court determined that “money advanced to a merchant in payment for merchandise received by the defendant constitutes a loan” where the borrower “promised to repay the bank for money it paid to the merchant for her benefit.” The Appellate Court characterized this three-party transaction as a “tripartite relationship,” followed Harris Trust, and held that the five-year statute of limitation applied here.

The borrower urged the Appellate Court to follow a persuasive New Jersey case, Midland Funding LLC v. Thiel, 144 A.3d 72, 75 (N.J. Super. Ct. App. Div. 2016), which held the four-year statute of limitation governing the sale of goods applied to “claims arising from a retail customer’s use of a store-issued credit card or one issued by a financial institution on a store’s behalf when the use of which is restricted to making purchases from the issuing retailer.”  The Appellate Court declined this invitation because “on point” Illinois case law settled this issue.

The Appellate Court next examined the borrower’s argument that Citizen’s National Bank of Decatur v. Farmer, 77 Ill. App. 3d 56 (1979), demonstrates that the four-year statute of limitations applied.  The Appellate Court distinguished Citizen’s because, unlike this case, the plaintiff did not loan any money to a borrower.

The borrower also argued that the Appellate Court should follow Johnson v. Sears Roebuck & Co., 14 Ill. App. 3d 838 (1973), where “the court held that a store credit card was not subject to usury laws because the sale of goods on credit and allowing payments over time do not constitute a loan.”  The Appellate Court distinguished this case because it did not involve a fact pattern where a bank paid a merchant for goods that a borrower purchased and the borrower agreed to repay the bank for this loan.  Instead, it only concerned the relationship between a retail merchant and a purchaser.

Finally, the Appellate Court emphasized that the “type of credit card is immaterial.” It does not matter whether the credit card was issued for a general purpose or may only be used at one retailer.  Instead, the “determining factor” is the “tripartite relationship and a loan of money.”

Thus, the Appellate Court affirmed the trial court’s dismissal order.