Many debt collectors consider litigation and settlements the cost of doing business. For several reasons, the cost is there even if the debt collector is genuinely attempting to comply with the myriad statutes and regulations governing the collection of debt.

One-Sided Attorneys’ Fee Provision

One reason is the dilemma caused by the one-sided attorneys’ fee provision of the Fair Debt Collection Practices Act (FDCPA). Initially intended to enable consumers to protect themselves from overzealous debt collectors even if they can’t afford legal representation, the FDCPA has morphed into something different. One judge in the Eastern District of New York called out the misuse of the FDCPA, hinting that the statute might now be “serving largely to facilitate debt evasion and to prop profits among the plaintiffs’ bar[.]”

The plaintiffs’ bar brings thousands of identical FDCPA suits and pre-litigation claims each year. Debt collectors, who do not get to recover their legal fees even if no violation is found, simply cannot afford to defend each and every claim. The only way to keep legal fees from exploding is to settle the majority of these claims. This in turn encourages more claims because settlements are easy to come by. And so the cycle continues. Even when cases do proceed to litigation and end in court decisions, it can take multiple rounds of litigation to finally stop identical claims from being filed. For example, the Second Circuit had to shut down the reverse-Avila argument not once, but twice before debt collectors saw a stop to these claims.

There must be a way to maintain the initial intent of the law — to make it practical for individual consumers to file complaints against collectors suspected of wrongdoing — while also reigning in a cottage industry that provides no consumer protection, yet contributes to a higher cost of credit.

Inconsistent Court Decisions

Another reason is the inconsistency in court decisions, specifically related to debt collection letter requirements. The most recent and currently-ongoing example of this is within the Third Circuit, where the same validation notice language that tracks the FDCPA both confuses (according to the Eastern District of Pennsylvania) and does not confuse (according to the District of New Jersey) the least sophisticated consumer about how to lodge a dispute. With inconsistent requirements and the constant stream of novel, hyper-technical FDCPA claims, it is almost impossible to determine how to proceed.

FDCPA, TCPA, and FCRA

The above only addresses FDCPA litigation, but there are also countless issues with Telephone Consumer Protection Act (TCPA) and Fair Credit Reporting Act (FCRA) litigation.

One company has chosen to bring the true impact of this issue to its Congressional representative’s attention. The below letter was shared with insideARM, and we share it today with the company’s permission.

Letter to Congressional Representative

Dear Congressman,

…

Over the last several years we have been inundated with frivolous lawsuits by professional litigators who are picking apart our letters (debt validation notices) word-for-word while we work diligently to strictly follow the regulations set forth by the FDCPA (Fair Debt Collection Practices Act). The same attorney-approved letters we have used for well over 15 years are being unduly scrutinized by these professional litigators and labeled as “confusing” or “misleading” to these very same consumers. We take incredible pride in doing right by consumers.  In fact, we take pride in helping those who care to pay the bills they owe – to doctors, to small business owners, to the numerous people who extend credit to consumers and who sometimes are left holding out an empty hand when it comes time to be paid for the products or services they provided. We are not the bad guys. In fact, we are one of the good agencies that constantly strives to do the right thing. Not only do we extend as much help to consumers as we lawfully can, but we also support our community with sponsorships and volunteerism …

So, when we get sued again and again … and pay out $10,000 settlements each time, of which 90% or more goes to the attorney, who do you think ends up paying? The consumer does. For every three or four of these lawsuits we are prevented from hiring one more full-time person. And we are getting hit with dozens of these each year and paying hundreds of thousands of dollars – for what? A letter that has been successfully used since the turn of the century! So, add that up and we’re growing more slowly than we have intended with costs being passed back to the consumer from our clients – all of which costs money – in revenue that provides property taxes, payroll taxes and employment in an area that could really use more available jobs and money to fix crumbling infrastructure, increase educational opportunities, fight crime, and more.

Do you know that we get sued for using dialing technology? The same technology that elections use to call voters or to drop a voicemail on my colleague’s phone to tell him about upcoming town hall meetings. Did you know that campaign surrogates sent the same person unsolicited text messages to vote leading up to election day? And do you know that no one ever opted-in to receive any of these notices? Did you know that he could actually sue because of this? Now, he hasn’t, and he won’t – he’s a reasonable person who employs logical thinking and doesn’t pretend these messages have hurt him in any manner. In the end it’s not really an inconvenience. It’s not unreasonable for him to simply ask not to receive these calls and text messages. How is it that we are treated any differently? How is it that when we follow the letter of the law as outlined in the FDCPA, we are still found liable even though there is no clear guidance provided outside of this for our letters and the TCPA (Telephone Consumer Protection Act) for all forms of communication, even though this act became a federal statute in 1991! That certainly makes it hard to understand how email and text-messaging is currently regulated in this industry, let alone any other.

In fact, ACA International submitted a proposal to the CFPB (Consumer Financial Protection Bureau) outlining some of these things, including an approved debt validation notice, leaving voice messages, using text and email, and even perhaps replacing the debt validation with a digital form that would provide the industry with a clear roadmap in avoiding frivolous litigation based on unclear standards. You can see more about this on the ACA International website (https://www.acainternational.org/news/aca-requests-quick-fixes-to-parts-of-the-fdcpa) – it’s currently under consideration on a wing and a prayer. A call from you to the newly confirmed director of the CFPB, Kathy Kraninger, to consider the suggestions presented in this proposal would be greatly appreciated and might just go a long way in determining the appropriate regulations and standards for the future.

We have spent hundreds and hundreds (if not thousands) of man hours working with a team of our best and brightest minds to craft a letter that informs the consumer of the amount they owe all the while tip-toeing around imaginary lines that we can’t even see in avoiding words and phrases that may be confusing to the “least sophisticated consumer” but also including a vast amount of clunky language required by this outdated legislation. Meanwhile, we do this work proudly but have zero guidance from the Federal Government on what would constitute proper language. The only guidance we have is that we must send a notification by mail before we can even make a phone call and we must make sure we tell the consumer how to dispute the bill and we must read the FDCPA Mini-Miranda each and every time we speak to a consumer no matter what. This is surely an antiquated way of doing things in this century and we’re getting sued on it left and right – perhaps the only bi-partisan effort we’ll ever see again in America! And we are doing this even after successfully using the same letter since 2001 – a letter that is now somehow confusing to consumers? Does this mean that American consumers are somehow growing less intelligent?  Is that what we should conclude from this? I certainly hope not, and I certainly do not believe that Americans are any less intelligent today than they were twenty years ago.

For nearly ten years, we have gone through this process of changing our letters – we are consumed by this effort instead of exalting our success and growing our business … Not to mention we are too scared and paranoid to even try texting or emailing consumers – instead of mailing a statement or calling. And through this all, we just want to do the right thing.

So we decided enough is enough and we decided to fight a case … for another alleged ambiguous set of words in a debt validation letter we sent to a consumer who owed a medical debt (again this is a letter completely compliant with the FDCPA).   

The judge agreed with our position and thought the attorney fees were egregious and the lawsuit itself was a farce, but he could only “go on current caselaw,” and then said, “So, call your Congressman if you want this to change.” Do you know what current case law he cited? The fact that this lawyer could charge $650/hour to essentially argue how one word was enough to confuse his client about a bill he owed. We were then presented with these choices: Take the case to trial at a cost approaching $100,000 or settle right then and there for $10,000. So, what do you think we did? Yes, sir. Another $10,000 – not to the consumer who supposedly is the aggrieved party here, but $9,000 to the lawyer and $1,000 to the consumer – and, here’s the kicker, the consumer still owes the bill! The plaintiff is able to recoup their lawyer’s fee through this process, but if we were to win or settle in our favor, we cannot do the same thing. There is literally nothing preventing these attorneys from fleecing companies that support thousands upon thousands of jobs in the US. It is not a level playing field and these attorneys are acting just like the worst collection agencies. How is this helping anyone? Do you know what would immediately slow down this silly trend? Allowing the defendants to recoup their attorney fees. How many professional litigators do you think would take that risk? How many collection agencies would have the courage to then fight these frivolous and unjust lawsuits?

Congressman, you are the only one who can help us. And we don’t need much. … We’re not asking for tax breaks. We’re not asking for influence. We’re asking for common sense to start guiding the principles of collecting legitimate debt in this great country of ours. Can someone definitively tell us what to do? The CFPB gives absolutely no guidance on this. The FDCPA and TCPA provide some, but it’s outdated and doesn’t even address email, cell phones or text messaging – all modes of communications that a majority of consumers prefer. Can someone level the playing field so we can use the same technology you and many other business and organizations use to make our clients whole? Can defendants recoup their attorney fees from plaintiffs when the defendants are proven correct? If not, you’re going to put the majority of debt collectors out of business and when no one is left to collect the debts, businesses, hospitals, and even the government itself will go out of business. It is well worth your time and effort write the CFPB to consider the suggestions presented in the ACA’s proposals.

Please help us, Congressman.  After all, it’s just common sense.

RICHMOND HILL, Ontario — AGILITY Outsourcing 1 (AGILITY) President & CEO, Nicholas A. Papeo today announced the hiring of Jason W. Brunet to the position of Executive Vice President, Corporate Development for Outsource Business Solutions, Internal Business Affairs and External Relations, effective immediately.

AGILITY is making incredible strides in bringing innovative outsource solutions and business services across North America.

Jason has 25 years of operations, financial control, corporate development, marketing and sales experience and most recently was the principal of Integrated Financial & Management Solutions Inc. In his new role, he will oversee the Company plan with respect to BPO Operations and is a key member of the executive team responsible for driving revenue and profitability by providing superior service standards and results to its clients through the planning, development and execution of the corporate strategy throughout the North American business community and industry associations. Jason will also lead in the development of new ventures, strategic market opportunities and BPO acquisitions.

“Jason is a tremendous asset for AGILITY and the FDR Group of Companies. His industry experience, integrity standards and business acumen will help position and strengthen our executive team. He has acquired a reputation for initiating programs to fortify brand awareness, generate significant new revenue and optimize service levels.” said Nicholas A. Papeo – President & CEO, a seasoned long-term member of credit collections, handling 1 billion in disbursements and north of 20 billion in placements.

“I am profoundly honored to join AGILITY and the FDR Group of Companies. I very much look forward to working with the executive team, management, staff and valued clients to further enrich the organizations vision of delivering the highest performance and service standards by introducing innovative practices and forward-thinking initiatives.” said Jason Brunet – Executive Vice President, Corporate Development.  

Jason Brunet can be contacted at 416-951-2988.

About AGILITY Outsourcing 1 (AGILITY)  

AGILITY provides quality outsource and business process outsourcing solutions (BPO) to organizations in Canada, the United States and Mexico. As an extension of our client’s brand, AGILITY provides efficient and cost effective inbound and outbound call centre solutions, answering services, customer service management, help desk and technical support, telemarketing and telesales (Up and Cross Selling) services, market research and customer satisfaction surveys, after hours and overflow work as well as accounts receivable management and credit adjudication services.    

NORFOLK, Va. — Glasser and Glasser, P.L.C., a Norfolk, Virginia based litigation and creditors’ rights law firm, is pleased to announce that attorneys Daniel T. Bengston and Rachel E. VanHorn have been elected members of the firm, effective January 1, 2019.

Dan Bengston graduated from Regent University School of Law and serves in the firm’s Collections Department.  In his role as Director of Litigation, Dan represents national and regional banks, credit unions, consumer finance companies, municipalities and others that seek to compliantly enforce consumer and commercial contracts. Dan has presented on topics including Fair Debt Collection and Collection Law.

Rachel VanHorn graduated from Florida State University School of Law and also practices in the firm’s Collections Department. Rachel is an accomplished litigator with experience representing clients throughout Virginia. She focuses on legal collections with an emphasis on compliance management.  Named a Super Lawyers Rising Star in 2017, Rachel serves in various capacities for the National Creditors Bar Association and the Norfolk-Portsmouth Bar Association.

Managing member Richard S. Glasser said, “[t]he new partners were elected on the basis of their exceptional legal abilities, contributions to the firm, commitment to client service and demonstration of the firm’s values of professionalism, ethics and fairness for all. Their promotion to the partnership recognizes both their accomplishments to date and the confidence of the partners in their future contributions to the firm, our clients and the court systems in which we serve.”

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About Glasser and Glasser, P.L.C.

Glasser and Glasser, P.L.C. was founded in 1932 and is headquartered in Norfolk, VA, with diverse practice areas across Virginia, Maryland, Washington, D.C. and North Carolina. The firm is designated a US News “Best Law Firm” and its attorneys and staff are involved in professional, civic, business and charitable organizations throughout the region. Glasser and Glasser provides legal representation in diverse areas of practice including Collections, Foreclosure, Creditors Bankruptcy, Personal Injury and Wrongful Death, Antitrust, Mesothelioma, Products Liability from Defective Drugs and other complex litigation.

For more information visit www.glasserlaw.com.

NEW YORK, N.Y. — As a new year begins, we at KM2 Solutions take a look at some of the outstanding achievements of the year passed.  2018 was a year full of milestones which included growth of our client base, growth of our operating facilities, reinvestment in our employees, and giving back to the communities that we operate in.

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Our client base grew substantially last year as we added 12 new client programs.  We brought on a number of new client logos and also expanded our work within our existing client base.  Clients know that we have the ability at KM2 Solutions to scale quickly and efficiently with their business needs.  President and CEO, David Kreiss, states that “whether through rapid customer expansion or business acquisitions, when clients expand, we are there to grow alongside them.”

To support the growth of new clients and existing client expansion, we added considerable capacity to our global footprint.  This past year, we expanded into our first South American country, Colombia, in the city of Bogotá.  We are now operating 10 offices in 6 countries throughout the Caribbean and Latin America.  We continue to invest in capacity expansion as 2019 promises even further client growth.

As our client’s grow, we are able to continuously reinvest in our people.  “Our people are the engine that drives this company forward,” says David Kreiss, “Every year we find new ways to recognize their hard work and support their lives in a busy world.”  This year, we opened a day care facility for working parents at our Barbados facility.  Across the board, we furthered health and wellness partnerships and also refocused on our KM2 University – a program designed to develop the skills that agents and managers need to succeed.  Finally, we continued supporting our local communities with back to school programs, low-income support, and disaster relief programs through our corporate social responsibility arm, KM2 Cares!

2018 was a special year at KM2 Solutions.  We are beyond thankful to all of our hard-working employees and client partnerships that have allowed us to build the best nearshore BPO company in the market.

This has been a hot issue in the industry for a while now, and it seems that we are no closer to a resolution. Similar to prior rulings, the District of New Jersey (D.N.J.) has yet again ruled that a letter containing validation notice language that tracks section 1692g(a) of the FDCPA and includes the debt collector’s contact information does not confuse a consumer into thinking that he can dispute the debt orally. The case is Martinez v. Diversified Consultants, Inc., No. 17-cv-11923 (D.N.J. Jan. 24, 2019).

However, another court within the Third Circuit’s umbrella, the Eastern District of Pennsylvania (E.D. Pa.), continues to find that validation language that tracks the FDCPA confuses a consumer into thinking that a dispute can be made orally. Check out the insideARM Perspective at the end of this article for a discussion about the inconsistency.

Factual and Procedural Background

In the Martinez case, plaintiff-consumer fell behind on his Verizon account, which was then referred to a debt collector. The debt collector sent a letter to plaintiff containing on its front page a notice of validation rights that tracks the language of the FDCPA:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request of this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

The letter also contains the debt collector’s address, toll free telephone number, hours of operation, and website address. The letter notifies the consumer that calls to and from the debt collector may be monitored or recorded.

Plaintiff filed a lawsuit alleging that this letter violates the FDCPA because it confuses the least sophisticated consumer about what he needs to do in order to dispute the account. Specifically, that including a phone number somehow makes a consumer think that he can dispute the debt by phone.

The debt collector filed a motion to dismiss, which was granted by the court.

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The Court’s Decision

The court’s decision is in line with prior decisions from New Jersey. Per the guidance from those decisions, the court looked at the substance and the form of the letter.

Substance-wise, the letter contained no indication that a dispute can be made orally, nor did it contain any sort of invitation to call (which, the court mentions, itself also wouldn’t necessarily be a violation). The only reference to disputing the debt in the letter was within the validation notice language, which contains an instruction to send the dispute in writing. Due to this, the court found that there is nothing confusing about the consumer’s requirement to dispute his debt based on the substance of the letter.

Form-wise, the court found that the letter contained all factors that favor the debt collector’s argument for dismissal. The validation language is clearly listed on the front of the letter and not intermingled in any way with the telephone number. The telephone number doesn’t appear an overwhelming amount of times on the letter. The telephone number is not printed in bold nor in a large font.

Accordingly, the court dismissed the lawsuit, allowing plaintiff the opportunity to amend the complaint if it can fix the deficiencies identified by the court.

Of most importance in this decision, however, is a little phrase tucked away in the middle:

For the reasons discussed below, the Court rules that the Collection Letter contains the required validation notice under Section 1692g(a)…

(Emphasis added.)

This is, of course, in direct conflict with E.D. Pa. decisions that ruled the exact opposite for identical validation notice language.

insideARM Perspective

The Third Circuit has inconsistency on its hands, and it is time for a resolution. If the same letter is both violative and not violative within the same circuit, an appeal — even as far as Supreme Court review due to the Third Circuit’s unique interpretation that subsection (a)(3) contains a written requirement — is necessary to resolve the conflict.

In the past year, D.N.J. found that letters — all of which contained identical FDCPA-tracking validation notice language — do not lead a least sophisticated consumer into believe that they can dispute the debt by phone. The cases include, but are not limited to:

• Ferrulli v. BCA Financial Services, Inc., Case No. 17-cv-13177 (D.N.J. Sep. 28, 2018)
• Riccio v. Sentry Credit, Inc. et al, 2018 WL 638748 (D.N.J. Jan. 31, 2018)

Across the state border, decisions in E.D. Pa. have consistently found that letters, which are almost identical to those listed in the cases above, somehow could confuse a least sophisticated consumer into thinking they can dispute the debt orally. These cases include, but are not limited to: 

• Henry v. Radius Global Solutions, LLC, No. 18-cv-4945 (E.D. Pa. Jan. 18, 2019)
• Durnell v. Stoneleigh Recovery Associates, LLC (E.D. Pa. Jan. 7, 2019)
• Guzman v. HOVG, LLC, No. 18-CV-3013 (E.D. Pa. Oct. 31, 2018)

How can these virtually identical letters both confuse and not confuse the least sophisticated consumer about how to dispute the debt?

The reasoning in E.D. Pa. decisions is that the whole of the letter may have been reviewed to determine whether the language is confusing, but the specific validation language (outside of the remainder of the letter) has not. This, however, goes against other rulings that suggest the letter should be viewed as a whole rather than isolating individual parts. Doing otherwise contributes to the trouble of piecemeal letter requirements caused by hyper-technical lawsuits such as the ones in question.

One thing is for sure. A cleanup of decisions on this issue is needed in the Third Circuit.

Editor’s Note: This article was initially published on TrueAccord’s blog and is republished here with the author’s permission.

A couple weeks ago, I posted about the three main themes I heard in the public comment forum from consumer advocates, businesses, and trade groups on the new California Consumer Privacy Act (CCPA). I heard from a number of ARM compliance professionals that the themes highlighted provoked discussion on how this law might impact our industry in particular. Today I want to take the discussion further and talk a bit about some of my concerns for how this law will likely add significant complications to your compliance platform.

The California Attorney General’s Office has been hosting a number of public comment forums around the state to hear from consumer advocates, business, and trade groups about the new California Consumer Privacy Act. The Act will require that businesses inventory and map personal data, provide consumers rights to see what data a business has collected, and allow consumers to opt out of data selling or transmission. If you have a website and interact with any consumers in California, you need to be concerned about the potential impacts of the CCPA to your business.

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This law conflicts with state licensing requirements or industry best practices.

Section 1798.105 requires companies to delete a consumer’s information upon request. In the ARM space, collections agencies have both data provided by their clients on consumer accounts placed for collection and data they collect throughout the collections process. Businesses in the consumer finance space, for example, need to keep this information to demonstrate how they handled the consumer’s account, to prove they followed the various laws regulating the industry, maintain accurate records for their finance departments, and to improve the collections process for consumers and clients.

There is a list of exceptions to the requirement to delete a consumer’s information upon request, in section 1798.105(d). Subsection (d)(7) says you may keep information “To enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer’s relationship with the business” and Subsection (d)(8) says you may keep information to “Comply with a legal obligation.” These provisions are extremely broad and ambiguous. What might be “reasonably aligned” with how a collection agency would use consumer information will result in differences of opinion. Would a consumer expect an agency to keep a record for state or federal regulators? What about being able to provide a receipt for the consumer months or years later to prove payment on an account? Would a consumer, or even California regulators, agree that another state’s licensing rules that require an agency to keep that consumer’s records for a period of time trump the consumer’s request to delete that information? Without reliable guidance, definitions, or safe harbors this provision will result in disharmony, divergent expectations and likely legal battles.

A new opportunity for bad actors and for corporate espionage.

Section 1798.140(c) states that the law applies to any business that:

1. Has annual gross revenues in excess of $25,000,000; or
2. Alone or in combination, annually buys, receives for the business’ commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices; or
3. Derives 50 percent or more of its annual revenues from selling consumers’ personal information.

This provision alarms information security officers in large and small businesses alike. On nearly every website, each time you visit a site and browse around, your IP address is logged by the administrative system for the web page. As written, merely collecting an IP address could count towards the 50,000 threshold to trigger compliance with this law.

A Distributed Denial of Service attack (“DDOS”) is an increasingly common method for bad actors to try and hack into a business database by bombarding the company’s website with hundreds of thousands of web site visits, overwhelming the system and causing it to crash and distracting the company’s administrators and allowing the hacker to get easy access. This creates a scenario where any hacker going after valuable consumer records can add the headache of complying with CCPA.

Another unpleasant possibility would be for an unhappy consumer or a competing business to launch a DDOS attack and then sending dozens or hundreds of information requests under the CCPA. Simply search online for “how to do a DDOS attack” and you will find dozens of articles and videos that explain just how easy it is for the average person with minimal technical knowledge to start their own DDOS attack. If your company does any business in California and any IP addresses used in this attack are from a California resident, your company will have to comply with the CCPA for all of your California consumers. These albeit too common scenarios are yet unaddressed in the law.

Client information? Agency information? Who is responsible for what?

Collection agencies must keep detailed records of how and when we communicate with consumers. Whether agents are calling, responding to letters, emailing, or texting, we must know the details of what we discuss to meet our federal and state compliance regulations, improve our chances of collecting on outstanding balances and to inform our clients on the status of their accounts. It is unclear in the CCPA whether an agency would be required to delete this valuable information at the request of a consumer. As written, the results of skip tracing could be considered personal information and if an agency is required to delete current addresses or respect an opt-out for using this information it is impossible to provide legally required disclosures to consumers. A likely unintended consequence may be more creditors choosing to sue clients than facing the legal uncertainty posed by the CCPA.

An issue raised by the CCPA particular to collections is there is no clear delineation between whether the client or the collection agency bears the responsibility for honoring a consumer request to opt out or to delete information. It is common for a consumer to communicate with both the creditor and the agency where the account is placed while the account is in collections. If a consumer tells the creditor that they are opting out and want their information deleted, does the creditor have to respect that request even if it makes the account unworkable? Will the creditor need to relay this request to the agency working the account and require them to delete consumer information? The law is unclear as to how the creditor or the collection agency can reasonably comply with consumer wishes without making the account potentially uncollectable.

These issues can be resolved before the law goes into effect.

The CA DOJ must build in a safe harbor provision to addresses these concerns that go beyond the consumer finance space into all forms of businesses interacting with consumers (think hospitals). We need to raise these issues with the regulators and ensure that there is no ambiguity around what information must be deleted or provided to a consumer upon request, the specific exceptions to this provision,  how to transmit that information to consumers securely, and to protect businesses and consumers from bad actors. If you are a business who interacts with consumers, you need to either attend the next public comment forum nearest to you or provide critical feedback to the regulators and to follow up with a formal written response. You can find information on the public forum schedule, along with an email address and postal address to send your feedback below.

Upcoming events: https://oag.ca.gov/privacy/ccpa

Email to provide feedback directly to regulators: privacyregulations@doj.ca.gov

Postal mail address to provide feedback:

CA-DOJ, ATTN: Privacy Regulations Coordinator
300 S. Spring St.
Los Angeles, CA 90013

Editor’s Note: Multiple industry groups are reportedly planning to submit comments. insideARM encourages as many voices to be heard as possible.

On Friday, January 25, the Consumer Financial Protection Bureau (CPFB or Bureau) issued a press release announcing additions to its senior leadership. The additions are as follows:

• Andrew Duke – Policy Associate Director for External Affairs. Mr. Duke has 27 years of public policy experience, including 20 years serving three different members of Congress. 
• Laura Fiene – West Regional Director. Ms. Fiene has 31 years of expeirence regulating financial services companies and has been with the Bureau since its inception in 2011.
• Marisol Garibay – Acting Chief Communications Officer. Ms. Garibay hails from the Office of Management and Budget, where both Director Kathy Kraninger and Former Acting Director Mick Mulvaney came from. She has 14 years of experience in policy communications.
• Delicia Reynolds Hand – Deputy Associate Director for External Affairs. Ms. Hand has 17 years of experience in consumer advocacy and joined the Bureau in 2012.
• Lora McCray – Director of the Office of Minority and Women Inclusion. Ms. McCray has 15 years of experience in minority inclusion and management, most recently at the Federal Reserve Bank of Boston. 

insideARM Perspective

When a new leader comes into an organization, usually a new leadership team comes along with him or her. It’s been a little over a month since Director Kathy Kraninger became the leader of the Bureau, and now we have both: a view into her vision of the Bureau and the senior leaders she is bringing in to help her establish that vision. 

The Bureau has seen a lot of turmoil regarding its senior personnel over the past 15 months.

• Back in November 2017, Former Director Richard Cordray announced that he would be stepping down from his role.
• The next month brought turmoil around who would take over as Acting Director: Former Director Cordray’s pick, Leandra English, or President Trump’s pick, Mick Mulvaney. After a federal judge’s ruling, Mick Mulvaney became the Acting Director.
• In June 2018, President Trump announced Kathy Kraninger as his pick to be the next permanent Director (with a 5-year term). This was met by a lot of resistance from Senator Elizabeth Warren and others.
• In August 2018, the Bureau’s former Student Loan Ombudsman resigned with a bang, releasing a resignation letter that alleged the Bureau’s new leadership was failing consumers. This letter sparked backlash and inquiries from Congress.
• In December 2018, Congress confirmed Kathy Kraninger as the next Director of the CFPB.

Hopefully a new Director means stability among the Bureau’s ranks, and more clarity for those it supervises.

ARLINGTON, Va. — Numeracle™, Inc., the pioneer of robocall blocking and labeling visibility and control in the calling ecosystem, and NobelBiz™, leading innovator in the contact center technology industry, today announced a collaborative solutions delivery model enabling NobelBiz to provide Numeracle’s Number Registration and Trusted Entity™ Certification solutions to customers using LocalTouch®, the patented Local Caller ID management solution by NobelBiz.

For enterprises experiencing a decline in customer engagement due to improper call blocking and labeling, Numeracle’s NumeraList™ Number Registration services provide an enterprise the ability to register its phone numbers across the telecommunications network, or ‘the calling ecosystem,’ in order to identify its ownership of the numbers. Numeracle’s corresponding NumeraCert™ module verifies the enterprise’s identity, call compliance infrastructure and use of its phone numbers for the purpose of customer communications to certify the call originator’s status as a Trusted Entity.

As the result of Number Registration and Trusted Entity Certification, a legal enterprise is able to prevent its calls from being improperly classified and labeled as “Fraud” or “Scam” as displayed on a consumer’s mobile phone or caller ID. This increases consumer trust in the incoming call and improves the reputation of the calling party’s associated brand.

By presenting a geographically familiar number to the calling party, NobelBiz’s fully-compliant LocalTouch solution increases contact rates and callbacks, allowing enterprises to make more connections with consumers while making fewer attempts. Coupled with Registration and Certification, powered by Numeracle, NobelBiz’s patented automated number rotation is now enhanced through the presentation of accurate caller ID labels by call blocking and labeling solutions, leading to increased customer satisfaction and improved agent morale.

“As a strategic extension of NobelBiz’s Intelligent Local Caller ID Management solutions, the addition of Numeracle’s Registration and Certification offering allows our customers to receive all the performance and productivity enhancements associated with LocalTouch, now with the ability to address improper call blocking and labeling,” said Steve Bederman, President, NobelBiz. “By providing our customers with a solution to address lost connections due to fraudulent or illegal call labeling, we’re able to improve connect rates, supported by Numeracle’s established position within the industry to navigate this changing ecosystem.”

“By bringing the work we’re doing to support the legal call originator together with NobelBiz’s innovative suite of performance and productivity solutions, we’re extending our mutually-held vision to improve trust and consumer experience for our customers on a wider scale,” said Rebekah Johnson, Founder & CEO, Numeracle. “By extending the ability for LocalTouch users to identify how they intend for their numbers to be labeled across the ecosystem, we’re putting control back into the hands of the call originator and returning viability to voice channel communications.”

To discover how Numeracle and NobelBiz can help you to convert more calls while addressing call blocking and labeling, please visit http://nobelbiz.com/contact or www.numeracle.com/contact to get in touch.

About Numeracle

Numeracle, established to take action against the growing problem of unwanted and illegal robocalls, provides a single source of visibility into improper call blocking and labeling across the ecosystem. By working together with carriers, analytics companies, device manufacturers, and the developers of call blocking and labeling apps, Numeracle delivers actionable strategies to return control to the originators of legal and wanted calls. To learn more about our mission to return trust and transparency to the voice channel, please visit www.numeracle.com.

About NobelBiz

NobelBiz is the leading innovator in the contact center technology industry. The company has grown to serve contact centers globally, providing world-class voice, cloud contact center, and business intelligence solutions. NobelBiz transforms contact centers into higher-performing intelligent contact centers and helps take companies from “isolated cost center’ to ‘company-wide intelligence generator” for customer service, sales, marketing, product development, and more. Visit www.nobelbiz.com to engage with us on our intelligent call center solutions.

LOS ANGELES, Calif. — The City of Los Angeles Office of Finance has launched implementation of their “NextGen” Cloud Financial Ecosystem, “CSS IMPACT! HD™ 2.0”. CSS, Inc., the developers of “IMPACT! HD™ 2.0” is the leading provider of Cloud Financial Ecosystem platforms for enterprises & government.

CSS’s financial cloud architecture removes and resolves prohibitive costs of acquiring new technology and workforces to overcome fundamental day to day processes. Municipalities, like the City of San Francisco, City of Los Angeles and the City of Cincinnati, are leveraging intuitive agile new technology to engender turn-key automation with CSS’s Cloud Financial Ecosystem platform, enabling them to cost-effectively leverage cutting-edge Fintech technology with the added benefit of a streamlined workforce. This in turn enables veteran City operations staff to focus solely on revenue management and customer care.

The City of Los Angeles, named America’s #1 Digital City for 2018 by the “Center for Digital Government”, continues their legacy as Technology Leaders by adopting revolutionary cloud solutions to better serve their citizens.

“The City of Los Angeles is ranked as one of the most innovative cities in the country. It is an honor and a privilege to have been awarded this project and to be recognized by the City for our advanced Financial Ecosystem Technology. We look forward to a long partnership with the great City of Los Angeles,” said Sergio Seplovich, Executive Projects Director of CSS, Inc.

To learn more about how municipalities are leveraging CSS’s Cloud Financial Ecosystem, please visit http://www.cssimpact.com/software/tax-information-platform-system or download CSS’s tax platform brochure at http://tax.cssimpact.com.

About the City of Los Angeles – Office of Finance

The City of Los Angeles sprawls across roughly 470 square miles with 80+ neighborhoods connected by approximately 6,500 miles of streets. More importantly, it is home to over 4 million Angelenos and over 500,000 businesses.  The Office of Finance carries an important responsibility to ensure these 4 million entrepreneurs, visionaries, and leaders have the necessary services and city infrastructure to thrive.  As LA’s primary revenue generator, The Office of Finance engages in the pursuit of excellence in financial management for the City, its residents, and its businesses.

Finance is responsible for the collection of over $3 billion in revenue from various sources including taxes, licenses, fees, and permits which pay for numerous essential municipal services to City residents and businesses.  From tax discovery units to customer support, the tax collection division secures the inflow of funds to keep the City operating. For more information please visit https://www.lacity.org/

About CSS, Inc.

CSS is a leading provider of end-to-end cloud Financial Ecosystem platforms & Contact Center solutions for enterprises that generate & manage mass receivables, payments, recoveries & revenues. By delivering cognitive cloud Financial Ecosystems technology, CSS helps municipalities and enterprises improve and automate all their daily financial processes, consumer engagement & business process. For more information, download our brochure at http://brochure.cssimpact.com or visit us http://www.cssimpact.com or call 877.277.4621.

The Fair Debt Collection Practices Act (FDCPA) requires debt collectors to list the creditor to whom the debt is owed in the initial letter sent to consumers. This is simple enough when there is a single creditor entity, but becomes a little more complex when more than one entity is involved with the debt. One such situation is where the debt arises from a store-branded credit card that is issued by a bank.

In Bryan v. Credit Control, LLC, No. 18-cv-0865 (E.D.N.Y. Dec. 11, 2018), the court addressed this situation and found that listing the retail store as the creditor to whom the debt is owed does not violate the FDCPA due to the underlying contract between the retail store and the issuing bank.

Factual and Procedural Background

Plaintiff opened a Kohl’s Department Store, Inc. credit card that could only be used for the purchases made at Kohl’s. The card was initially issued by Chase Bank until 2011, followed by Capital One thereafter. The underlying agreement between Kohl’s and Capital One stated the following:

• Accounts are defined as credit accounts used to make purchases from Kohl’s;
• The “program” is the private label credit card program, including for the extension of credit to make purchases from Kohn’s.
• Kohl’s is responsible for, among other things, processing applications, managing accounts, handling collection and recovery efforts.

After plaintiff defaulted on his account, Credit Control sent a collection letter that listed Kohl’s as its “client” and Chase as the “Original Credit Grantor.”

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Plaintiff filed an FDCPA suit against Credit Control alleging that the letter failed to properly identify the current creditor. Credit Control filed a Motion for Judgment on the Pleadings, which the court granted — effectively disposing of the case by ruling in Credit Control’s favor.

The Court’s Decision

By granting Credit Control’s Motion for Judgment on the Pleadings, the court essentially ruled that based on all of the allegations contained in the complaint, there is enough present to find that Credit Control did not violate the FDCPA.

Based on the contract between Kohl’s and Capital One, Kohl’s is the creditor to whom the debt is owed. According to the FDCPA, “creditor” is defined as one “who offers or extends credit by creating a debt or to whom a debt is owed.” (Emphasis added by court.) Plaintiff argued that since Capital One is the owner of the account, the bank — rather than Kohl’s — is the creditor. However, the court disagreed, finding that plaintiff was confusing ownership of an account with the FDCPA’s definition of creditor. Based on the agreement between Kohl’s and Captial One, Kohl’s is the entity offering credit and is the entity responsible for collecting the debt. This, according to the court, qualifies Kohl’s as the creditor under the FDCPA.

The court rejected plaintiff’s argument that listing both Kohl’s and Capital One is confusing. The court cites prior precedent to show that specific labels are not required and, based on the context of the letter, the consumer would not be confused as to who the creditor is in this case. According to the court:

There is no indication that a bank’s involvement with a debt undermines the efficacy of listing the creditor as a “client,” and the Court remains persuaded by the reasoning in Wright.  Bryan applied for the credit card directly from Kohl’s, transacted business exclusively with Kohl’s, and was obligated to make payments through Kohl’s. No debtor, however unsophisticated, would be “uncertain as to the meaning of the message,” as it is obvious that the Collection Letter referred to Plaintiff’s Kohl’s credit card account. Thus, the technical owner of the Debt would not have been of concern to the least sophisticated consumer, who in this case could have paid off his Debt without having ever interacted with Capital One.  Accordingly, the Collection Letter’s reference to Kohl’s as Credit Control’s client complied with the FDCPA’s required inclusion of “the name of the creditor to whom the debt is owed.”

(Internal citations omitted.)

Since the court found that Credit Control accurately stated the creditor to whom the debt is owed in the letter, there was no violation of the FDCPA and the Motion for Judgment on the Pleadings was granted.