COLLINSWOOD, N.J. — MyGovWatch.com, a clearinghouse for leads and intelligence about government collection contracts since 2008, has announced a major rebranding and relaunch of the site.

MyGovWatch still offers users the choice of contracting for unlimited data access, but now additionally offers data through a new, freemium access option, which lets anyone create a free account and receive no-cost bid notices in every industry at the Federal, state, and local levels, including collections. This relaunch makes MyGovWatch.com the government RFP lead site with the most robust commercially-available freemium option.

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Historically, the site has catered to a handful of industries, including collections.  The site now enables anyone to specify their particular interests from among ten top-level industries, from professional services to construction to finance and technology and beyond.  Users can set preferences to be notified about leads in nearly sixty sub-industries, such as collections, billing, systems development, business services, and others, covering every conceivable type of government purchase.

For existing users, the new site offers all of the functionality and data access that it has always provided, plus the ability to let users tap into other market opportunities through a new, pay-as-you-go model offering users the opportunity to buy and apply credits on the site to access specific information about specific contracts. The new site also features a vibrant new look and feel.  Premium users continue to receive timely notice of:

• New procurement announcements in collections covering 24 classes of debt.
• Updates on current procurements in the form of addendum tracking and reporting.
• Award notices for recent procurements announcing winner(s).
• Availability of award documents obtained through open records requests showing how decision makers selected vendors for individual contracts, including pricing.
• Pre-notification of future procurements months before they happen.
• A searchable vendor center that lets users research pricing trends and winning proposals by competitor, geography, and numerous other contract attributes.

For organizations that do not typically compete in the public sector, or that do so infrequently, the site lets users take an opportunistic approach to pursuing opportunities by monetizing access to data and services on demand, such as:

• Micro-transaction costs to download documents and submit anonymous questions to buyers.
• The ability to download detailed historical documents related to specific contracts showing how decision makers selected vendors in the past, including pricing, that can be used to make decisions on current procurements.
• The ability to order open records follow up on demand to find out, anonymously, what happened with bids your organization has recently submitted.
• The ability to subscribe to the lifecycle of individual contracting opportunities, to be notified when key events happen over time, such as the award of a contract, availability of open records, or impending expiration of existing contracts.

The relaunch was three years in the making, and also offers organizations the option to tap into Application Program Interfaces (APIs) to feed sales leads directly into their customer relationship management (CRM) systems.  This lets organizations control data traffic and increases organizational awareness of who is responsible for various leads.

To create your free account today, visit www.mygovwatch.com.

About MyGovWatch.com

MyGovWatch.com is a government RFP lead and intelligence website with the most robust freemium option commercially available.  Users can create free accounts to hear about government purchasing opportunities at the Federal, state, and local levels from among ten top-level categories and nearly sixty subcategories.  Freemium users can buy credits to get help tracking and monitoring government purchasing activity. The site also offers premium services within specific markets and in relation to specific opportunities to let users keep close tabs on government purchasing opportunities that are of greatest interest to them.  Learn more at www.mygovwatch.com.

COLLINSWOOD, N.J. — The Fed Cetera Network, a business development organization under 48 CFR 52.219-9, will hold a teleseminar at 11AM EST on October 4, 2018, on the topic of the U.S. Small Business Administration (SBA) All Small Mentor Protégé Program (ASMPP).  The teleseminar will also feature brief overviews of Fed Cetera service disabled, veteran-owned (SDVOSB) and HUBzone-certified members who are seeking mentors. Here is where you can sign up to attend. 

The SBA’s ASMPP launched in October of 2016 to provide a way for small businesses with any or no special socioeconomic designation(s) to form a mentoring relationship with another business in a manner previously available only to 8(a) firms. 

The program benefits both mentors and protégés.  Mentors can form joint ventures with their protégé and compete for federal contracts and subcontracts on the basis of the protégé’s socioeconomic attributes, so, for example, a large business that becomes an approved mentor to an SDVOSB can compete as a joint venture partner to the SDVOSB for those opportunities, and the joint venture is considered an SDVOSB, regardless of the mentor’s status.  The mentor can own part of the protégé’s business, and can perform a sizeable portion of any resulting work. Protégés can receive various types of assistance, including financial assistance, from an approved mentor.

The Fed Cetera Network has a number of small businesses that have expressed interest in partnering with a mentor to pursue Federal opportunities, including SDVOSB and HUBzone firms.  Some of those firms will be profiled on the call.

The teleseminar costs $100 to attend, but is free to Fed Cetera Network members and to Private Collection Agencies (PCAs) now serving any U.S. Federal government agency, as well as to bidders to solicitation ED-FSA-16-R-0009.  Others will be invoiced upon sign up.

The Fed Cetera Network is a one-stop shop for Federal contractors, including United States Department of Education (ED) PCA contractors, to easily find pre-qualified potential subcontractors, protégés, and joint venture partners who have the wherewithal to implement Federal subcontracts successfully.  The Fed Cetera Network has helped dozens of small businesses pursue and receive Federal subcontracts over the years, and has helped multiple small businesses find and gain approval for mentorships under the SBA ASMPP. Member companies pay nothing to join the network, but pay only a nominal fee if successfully placed as a subcontractor with a Federal contractor.

Despite all that’s been written recently about the ED solicitation still in litigation, all federal agencies, including ED, have statutory requirements to spend significant dollars directly with small businesses.  According to the SBA’s small business dashboard, 71.2% of the $843.8M small business dollars spent by ED and 24% of the $2.5B eligible dollars for the Federal fiscal year ending later this month (dollars subject to small business percentage spending requirements), have been spent with small PCAs.  (You read that right. Nearly a quarter of every dollar ED spends on anything goes to a small business PCA.)

Many of the PCAs originally awarded as small businesses in 2014 are already large today and will be forced to reclassify as such in 2019.  ED’s stated intent to implement an enhanced servicer program is expected to come to fruition at some unknown, distant point in time in the future.  Meanwhile, news of Judge Wheeler’s permanent enjoinment against any cancellation of solicitation ED-FSA-16-R-0009 may result in additional contracts and placements to large PCAs.

None of these things has anything to do with ED’s statutory requirement to make direct awards for goods and services to small businesses, requirements that cannot be met through subcontracting, which ED will simply not meet without hiring small business collection agencies.

About Fed Cetera
Fed Cetera is a “business development organization” under 48 CFR 52.219-9 that PCAs contact when subcontracting opportunities are available in order to be fully compliant with Federal regulations requiring outreach to various sources of potential subcontractors.  The company maintains a source list of qualified small collection firms, regularly markets to the PCA community, and provides advisory services around business development and compliance to firms operating in the federal market place.

This article previously appeared on the Ontario Systems Blog and is republished here with permission.

A text message service (otherwise known as “SMS,” or “short message service”) is the functional and legal equivalent of a voice call placed to a mobile phone.  As such, a text message is regulated by the Telephone Consumer Protection Act (TCPA) and triggers all the same compliance requirements as do autodialed voice calls placed to mobile phones.  But TCPA compliance is only the beginning.  A compliant text message service must also satisfy the standards imposed by the Cellular Telephone Industry Association (CTIA).

TCPA Consent

Consent to text may be obtained verbally or in writing.  In fact, if you have obtained the consumer’s consent to place autodialed calls to their mobile phone you have also obtained their consent to leave prerecorded messages and text messages.  In other words, properly obtained TCPA style consent extends to all three modes of communication.  But many creditors and third- party collection agencies interpret the law very conservatively and prefer to obtain the express and specific consent of the consumer to engage in text messaging.  They do not rely on consent obtained to autodial or leave a prerecorded message on a consumer’s mobile phone to support their text message service.

CTIA Consent

The rigors associated with securing TCPA style consent may minimize your risk of violating the TCPA but they do not help you satisfy the consent requirements of the CTIA, the cellular phone industry’s self-regulatory organization.  According to the CTIA’s 2017 Standards Manual, CTIA consent requires the consumer to enroll in or subscribe to your text message service by initiating a text message to you.

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Debt Collectors’ Invitation to Text

Getting the consumer to act first and subscribe to your text message service is not easy, particularly for a third- party debt collector.  Organizations and businesses that sell or provide a product or service typically invite consumers to subscribe to their text message service via their web site, bill boards, signs, IVR scripts, marketing voice mail messages, brochures and letters.  Some even place the invitation to text on a billing envelope.

However, third party debt collectors have fewer options to present the invitation to text because of restrictions imposed by the FDCPA (e.g. unauthorized third-party disclosure of a debt) and because they are not soliciting consumers in general to text them about their product or service.  Rather, debt collectors are only interested in those consumers from whom they are collecting money.  Consequently, third party debt collectors tend to limit their invitations to text to letters, phone calls, voice mail messages, IVR scripts and web site.

Frequently Asked Questions

Not surprisingly, questions about text message service compliance requirements abound regarding the FDCPA, TCPA and the CTIA.  A few of the most common include:

Q: Can the account representative initiate the consumer’s first text so long as the consumer authorizes the initiation of the first text on a recorded line?

A: No, the first text must be initiated by the consumer using the mobile phone they are subscribing to the text message service.

Q: Is the consumer’s verbal confirmation to join a mobile database or text messaging program acceptable?

A: No. While the consumer’s verbal consent to text meets the requirements of the TCPA, the CTIA requires the consumer to actually subscribe to the program by initiating a text.

Q: May I use the word “Free” in describing standard messaging rate campaigns?

A: No, the carriers prohibit the use of the word, in this context, because the messages the consumers send to you or the messages they receive may cost the end user if they do not have a messaging plan.

Q: May I require a consumer’s consent as a condition of a settlement or type of payment?

A: No, the CTIA prohibits the business or organization from requiring the consumer’s consent as condition of a settlement or type of payment.

Regardless of the size of your collection agency, hiring a text messaging platform provider is key to managing consent and revocation of consent, pushing your texts, notifying you of deactivated numbers and assisting you in your compliance efforts.  A text messaging platform provider should also give you the reports you need to document the date and time of delivery, open rates and bounce backs to support your compliance with FDCPA requirements and state calling time and frequency restrictions.  Ideally, the platform provider will be integrated with your collection software to ensure a seamless exchange of data both to and from the consumer.

Remember: Start small, end big.  The laws surrounding text messaging for the third-party debt collector are emerging.  Begin with a self- service text messaging program, giving the consumer control over the type and frequency of the messages to be received and gradually advance to recurring message and chat programs as you become more comfortable with the text messaging medium of communication.  Those are the baby steps you should take as this new form of communication becomes even more prominent among your account portfolio.

Back in June, a judge in the Southern District of New York (S.D.N.Y.) found that the Bureau of Consumer Financial Protection’s (BCFP or Bureau) structure is unconstitutional in Consumer Financial Protection Bureau and the People of New York v. RD Legal Funding, LLC, et al., No. 17-cv-890 (S.D.N.Y. Jun. 21, 2018).  On Friday, September 14, the Bureau appealed this decision to the Second Circuit Court of Appeals.

This news comes on the tail of State National Bank of Big Spring filing a petition for writ of certiorari with the U.S. Supreme Court in a case that questions the constitutionality of the Bureau. The petition is a request for the nation’s hightest court to hear the issue.

As previously reported by insideARM, the State National Bank of Big Spring, et al., v. Steven Mnuchin, et al. case arose from the D.C. Circuit Court of Appeals. After the lower court (the D.C. District Court) found the structure of the BCFP to be constitutional, State National Bank of Big Spring appealed the matter to the D.C. Circuit. Almost immediately after the D.C. Circuit opened the matter, the parties filed a joint motion for judgment so that they could immediately appeal the matter to the U.S. Supreme Court.

insideARM Perspective

The Second Circuit’s decision will likely have an impact on the U.S. Supreme Court’s decision to hear the case. The name of the game here is jurisdictional split.

The judgment affirmed by the D.C. Circuit found that the structure of the Bureau is constitutional. If the Second Circuit reverses S.D.N.Y.’s decision and also finds that the structure is constitutional, then the chances of the U.S. Supreme Court hearing the case are decreased. While the issue — the constitutionality of the structure of a federal agency that touches and impacts many individuals and entities — seems perfect for the U.S. Supreme Court, the highest court may feel less compelled to review the issue if the courts agree on the answer.

If, however, the Second Circuit affirms the S.D.N.Y. case or the parties follow the same procedure as in the State National Bank case, then a jurisdictional split occurs and the odds of the U.S. Supreme Court granting the petition for writ of certiorari are raised.

Whether it comes from the Supreme Court or the Second Circuit, it seems that we will soon have an answer to this question.

On Friday afternoon, the judge in the case of FMS Investment Corp. (FMS) et al., vs. United States of America (ED) ruled in favor of the plaintiffs, granting their motion to permanently enjoin ED from cancelling its solicitation for unrestricted debt collection services.

Last week, insideARM published a lengthy article detailing the August 30th final oral arguments. In a nutshell, the plaintiffs argued that – based on the information in the Administrative Record (AR) – ED’s decision to cancel the contract was irrational. ED’s argument, in a nutshell, was that they’ve changed their strategy (they are planning to use pre-default servicers manage defaulted accounts), they will no longer need the services of large debt collectors, the 11 small contractors they do have are sufficient to get them from here to there, and so, they cancelled the solicitation for large agencies. In a ruling based solely on the contents of the AR, Judge Thomas Wheeler sided with the plaintiffs.

A quick recap

Every few articles on this saga it seems that a review of the case would be helpful for those who may have lost track.

Chapter One of this (so far) four chapter book began in 2014 when the five-year 2009 ED contract for debt collectors ended. New small business contracts were awarded on schedule, but the large-firm contracts were delayed. More than 40 large collection agencies entered the two-phase process. After ED made its initial cut, formal protests were launched by some of the companies not making it to phase two. Generally, the protests challenged the selection criteria.

Finally, in December 2016 contracts were awarded to seven large companies (down from 17 on the previous contract). This led to dozens of protests by firms that believed the process was flawed and unfair.

So began Chapter Two of the matter, with a VERY LENGTHY “re-do” of the solicitation, which resulted in awards to just two large companies, in January 2018.

This led to Chapter Three, with more protests, more litigation, and finally… nothing. No large company awards at all. On May 3, 2018 ED cancelled the whole solicitation, rescinded the contract awards from the two companies, and re-called the accounts still being worked by the firms that had an Award Term Extention from the previous contract. There were more protests, and a temporary injunction of the recall, but ultimately, the protests were dismissed, and the accounts were returned to ED, thus ending Chapter Three. 

Which gave rise to Chapter Four, with eight companies now protesting the cancellation of the solicitation, arguing that it was irrational. 

Now, back to Friday’s ruling

Judge Wheeler cited several cases in his discussion of whether ED’s decision to cancel its solicitation was a rational one.

• From Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co. (“MVMA” – 1983), he noted that “an agency must articulate a ‘rational connection between the facts found and the [policy] choice made.”
• From Gulf Gr. Inc. v. United States (2004) and AshBritt v. United States (2009), he noted, “Where an agency fails to undertake a review of relevant data, or fails to document that review, and articulate a satisfactory explanation for its conclusions, the Court must conclude that the agency has acted irrationally.’
• From Bannum, Inc. v. United States (2009), he noted that the “Court’s review is ‘highly deferential’ to the agency as long as the agency has rationally explained its decision…[and from MVMA], But the Court will ‘not supply a reasoned basis for the agency’s action that the agency itself has not given.”

The following sums up the Court’s opinion about ED’s defense:

“If ED anticipates loan volume growth, it failed to account for it in the AR. If ED anticipates loan volumes levelling off or falling, it failed to explain the basis for this conclusion. If ED assumes that current capacity will be sufficient until the enhanced servicer program is implemented — a goal for which ED apparently has no plan and no timeline — the AR provides no support for this assumption. ED ‘entirely failed to consider,’ (MVMA, 463 U.S. at 43) the interactions between future loan volumes, future small business capacity, and future enhanced servicer capacity over any timeline for implementing the enhanced servicer program.

The cancellation notice and the AR purport to outline a significant policy change. ED had clearly planned for PCAs to continue to administer defaulted student loans as recently as January 2018 because the agency awarded two PCA contracts that month. Yet not four months later, in a procurement cancellation notice, ED declared a new direction and an end to contracting for PCA services. ED needs to provide a ‘reasoned analyisis’ for the policy change. For all the reasons above, it has failed to do so. The AR before the court is not enough to show that ED’s decision to cancel the solicitation was rational.”

And, as to the reasoning for granting an injunction…

For the reasons stated above, the Court determined that the plaintiffs indeed succeeded on the merits, that they would suffer irreparable harm without an injunction, that the balance of the hardships favors an injunction, and that an injunction is in the public interest.

There was discussion during the August 30th oral arguments of the potential remedy of awarding attorneys’ fees and proposal costs to the plaintiffs, however the PCAs said this would be inadequate; what they want is to be able to fairly compete for the contract.

Judge Wheeler noted that resurrecting the solicitation and returning the procurement to the May 2, 2018 status quo will not prevent ED from continuing to develop its enhanced servicer program; on the other hand, plaintiffs depend on ED debt collection contracts to survive.

Finally, from a case cited by the plaintiffs (Starry Assoc.’s v. United States), he stated that “the public interest always favors inegrity in the federal government procurement process.”

So. We are back at May 2, 2018. No costs have been awarded to either side. The Court has not told ED what to do, except that it has permanently enjoined the agency from canceling Solicitation No. ED-FSA-16-R-0009.

insideARM Perspective

What’s next? Well, there will most certainly be a Chapter Five here. What can happen? A few thoughts:

• ED could re-offer the contracts to Windham and Performant — the two companies that had the contracts as of May 2, 2018.
• ED could re-award to the original 7 who got the contract in December 2016, plus maybe a few more.
• ED could take a 3rd shot at a revised RFP based on new criteria that the PCAs might possibly find reasonable.
• As these are IDIQ (indefinite delivery/indefinite quantity) contracts, ED could make awards, but then just delay giving the awardees any work.
• ED could make awards, but delay certification of the contractors’ readiness to receive accounts.
• ED could make awards, and determine that they DO need the services of large contractors, and send them accounts.
• ED could make awards, send accounts, proceed with their enhanced servicing program, and eventually pull back the accounts (as they’ve said would happen with the small PCAs).
• ED could make awards, send accounts, proceed with their enhanced servicing program, find that it will not be effective, and in the end, make full utilization of both large and small PCAs throughout the life of the contract.
• No doubt there are other possibilities. 

The bottom line at this point is that there are human beings involved. Things can’t possibly move forward in the best interests of borrowers, taxpayers, industry, or ED unless people can talk to each other. But how do you re-build a relationship that has become so acrimonious over the last few years?

Sources tell insideARM that, since December 2014 when Patty Queen Harper took over as administrator of the debt collection contracts (she has since left that position), nobody has spoken with a contracting officer, but all communication has been through email and memo. Contractors were told, “please don’t send responses to our audit findings. When we want it, we’ll ask for it.” There has never been a discussion about best practices, and it has been management by threat since early 2015 when the five contractors were suddenly fired.

In my humble opinion, perhaps a mediated meeting among the parties would be a place to start. Now that there is no pending litigation, why not take the opportunity to bring in the experts, bring in the contractors, and create a public-private partnership to figure out the best way to manage the millions of loans currently in default, plus the inevitable future defaults that will occur. 

Meanwhile, the whiplash and uncertainty has got to be killing the employees of the PCAs, both large and small. 

DEFINACE, Ohio — Credit Adjustments, Inc. (CAI), a values-led, family-owned call center and receivables management company, has announced the hiring of Scott Daniels as Chief Operating Officer. In his new role, he will oversee day-to-day operations to support the growth and add to the bottom line of the organization. Previously with Collection Technology, Inc. (CTI) in Rancho Cucamonga, CA, his focus at CAI is on operational needs including strategic planning, process improvements, and collaborative advances throughout the company. 

“Scott brings a wealth of experience to the organization at a crucial time in our company history,” said Lisa Bloomfield, President of CAI. “We are experiencing unprecedented growth and Scott’s commitment to delivering the ‘best in class’ highest standard in all operational aspects of a project from start to finish exemplifies what this company is all about.”

Scott’s experience encompasses twenty-one years at CTI, climbing from entry level IT help desk to CTI’s Vice President. Scott and his wife Suzy have two kids, Ethan and Emily, and have moved to Defiance, OH, from Fontana, CA. 

About Credit Adjustments, Inc.

Credit Adjustments, Inc. (CAI) is a world-class leader in receivables management. Founded in 1977 and headquartered in Defiance, OH, CAI has additional call centers in Toledo, OH, and Manchester, NH. CAI employs actionable analytics with experienced personnel to provide a fully secure suite of contact management solutions in first and third-party engagements. As a faith-based corporation, CAI believes it is part of the company’s mission to invest in our communities by partnering with other organizations to help address social issues. CAI follows the motto: Delivering Respect. Collecting Results. To learn more, visit: www.credit-adjustments.com/

A group of 15 Democratic senators sent a letter to the Bureau of Consumer Financial Protection’s (BCFP or Bureau) Acting Director Mick Mulvaney on September 13, 2018, inquiring about the resignation of Seth Frotman, the Bureau’s now-former Student Loan Ombudsman. As previously published by insideARM, Mr. Frotman sent a resignation letter to Acting Director Mulvaney on August 27, 2018, blasing the Bureau’s current direction and accusing the Bureau of failing the consumers it was created to protect. Democratic senators now want answers to the accusations made in the Frotman letter.

The senators’ letter expresses shock at the contents of the Frotman letter and accuses Acting Director Mulvaney of failing consumers in two main ways. First, the letter accuses the Bureau of abandoning consumers by failing to uphold its supervisory responsibilities over student loan servicers, and over violations of the Military Lending Act. Second, the letter accuses Mulvaney of politicizing the BCFP, expressing concerns that a political hire may “overrule the independent judgment of the Ombudsman’s office.”

The senators requested answers to certain questions stemming from the Frotman letter. Specifically, the questions revolve around:

• The BCFP’s relationship with the Department of Education;
• The BCFP’s oversight and supervision of the student loan servicing market;
• The BCFP’s actions stemming from complaints about student loan servicers;
• Acting Director Mulvaney’s political appointments to positions in the Bureau; and
• The staff report referenced in the Frotman letter regarding large banks “ripping off” students by “saddling them with illegally dubious account fees” that, according to Frotman, the Bureau leadership suppressed.

The senators who signed the letter were Sherrod Brown (D-OH), Patty Murray (D-WA), Jack Reed (D-RI), Brian Schatz (D-HI), Catherine Cortez Masto (D-NV), Doug Jones (D-AL), Margaret Wood Hassan (D-NH), Chris Van Hollen (D-MD), Robert Menendez (D-NJ), Tammy Baldwin (D-WI), Tina Smith (D-MN), Bernard Sanders (D-VT), Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Richard J. Durbin (D-IL).

insideARM Perspective

Considering the contents of the Frotman letter, the Democratic senators’ letter does not come as a surprise. What is a bit interesting is the senators’ accusations of Mulvaney politicizing the Bureau when, under former director Richard Cordray, the Bureau was also considered politicized but for the opposite political party. For example, roughly two years ago, former BCFP enforcement attorney Ronald Rubin wrote an article about, among other things, the Bureau’s hiring practices that heavily favored Democratic candidates. While the Bureau is meant to be an independent agency, its history thus far indicates that it will likely be caught in a political tug-of-war for many years to come.

ACA International made two announcements today, including the publication of a three-year strategic plan, and the hiring of industry veteran Issa Moe as General Counsel.

The goals of the strategic plan include:

1. Consistently maintain financial health by offering fairly-priced, high-quality and member-centric services and events, as well as being good stewards of ACA resources.

2. Ensure all educational offerings are relevant and use modern and effective delivery methods. Consistently innovate new educational offerings to meet members’ changing needs.

3. Build respect among consumers, media, lawmakers and regulators by regularly publishing all different facets of member-community impact, including impact on economic society (clients and consumers), philanthropy and employee opportunity.

4. Contribute to ACA members’ success by accurately understanding members’ needs with effective and consistent member engagement, unit engagement, and managing the organization well to meet those needs.

5. For the benefit of members and society, reduce or eliminate unreasonable federal and state regulatory or legislative rules through advocacy, member involvement, and even legal challenge as necessary, to ensure a healthy and vibrant economy with broad access to reasonably-priced credit.

6. For the benefit of members, decrease their financial exposure to unmerited legal cases.

Jack Brown, President, ACA International Board of Directors said, “Developing the strategic plan was a thoughtful process spearheaded by the Board of Directors, and particularly its treasurer, Scott Purcell. The Board sought staff input to carefully craft a strategic plan that is based on the overarching goal of helping members succeed.”

You can see the full plan here.

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Also today, ACA International CEO announced that the association has hired Issa Moe as Vice President & General Counsel. Prior to joining ACA, Moe was General Counsel and Chief Compliance Officer for First National Collection Bureau Inc..  He was previously an attorney with the law firm of Moss & Barnett. He has extensive experience defending claims under the Fair Debt Collection Practices Act, Fair Credit Reporting Act, Telephone Consumer Protection Act and similar statutes at the state level.

Read more about Moe’s appointment here.

 

On September 12, 2018, the Bureau of Consumer Financial Protection (BCFP or Bureau) issued its interim final rule addressing recent legislative changes to the Fair Credit Reporting Act (FCRA). The interim rule is in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act (Act) passed by Congress in May 2013.

The Act creates several new requirements for consumer reporting agencies (CRA). CRAs must now provide national security freezes free of charge and send a notice of security freeze rights when sending the Summary of Consumer Rights or Summary of Consumer Identity Theft disclosures to the consumer. The Act also requires CRAs to extend initial fraud alerts to a minimum of one year, wan increase from the previously-required 90 day minimum.

The Bureau’s new interim rule provides two new model disclosures for the Summary of Consumer Rights and Summary of Consumer Identity Theft in order to comply with the new requirements. The new disclosures will amend Appendicies I and K of Regulation V. 

In a footnote to the interim rule, the Bureau mentions that the additional costs, if any, to implementing this new rule should be minimal since the new disclosures and currently-required disclosures are similar in length.

The interim rule becomes effective on September 21, 2018. The Bureau invites comments on the interim rule, but the comments must be received on or before the effective date.

insideARM Perspective

One issue that stands out with the model disclosures is the complexity of the language used. While the “least sophisticated consumer” standard applies to the Fair Debt Collection Practices Act (FDCPA) and not the FCRA, identity theft and fraud impact consumers of all reading abilities. When run through a reading index, the results show that these disclosures are at a relatively high reading level. For example, the Flesch-Kincaid and the Coleman-Liau Index rate the disclosure at a twelfth grade reading level. The Linear Write Formula rates the disclosure at a college reading level. It is interesting that the Bureau would issue disclosures at such a high reading level while at the same time, and when communicating with the same consumers, debt collectors must ensure that their letters can be understood at a sixth grade reading level.

With debt collection rules perpetually around the corner, could these model disclosures be a sign of what is to come? A two page double-sided FCRA-required disclosure may not add additional cost, especially with the ability to send such disclosures electronically. Hopefully, while contemplating debt collection rules, the Bureau keeps in mind that the FDCPA world is very different.

In the debt collection context, such a long disclosure would add fairly significant operational costs. Sending initial validation letters, which contain the bulk of the required disclosures, via electronic formats is still a new pursuit for the industry. Recently, the BCFP complicated this effort when it filed an amicus brief in the Lavallee v. Med 1 case arguing that the E-SIGN Act applies to FDCPA-required disclosures. Currently, most initial validation notices are sent as one double-sided page. Printing and mailing costs would practically double if debt collectors were required to send a two page double-sided letter to consumers. It is comforting to know that the Bureau conducted a cost analysis on the new FCRA disclosure, and this may be indicative that it will do the same for the debt collection rules.

WOODLAND HILLS, Calif. — Account Control Technology Holdings, Inc. (ACT Holdings), a national leader in delivering debt recovery and business process outsourcing solutions, welcomes Chad Benson as the Chief Operating Officer (COO). Benson joins the executive leadership at ACT Holdings to drive results as the company continues to build and invest in its future growth. Benson officially joined ACT Holdings effective, September 4, 2018.

“I’m thrilled to have someone with Chad’s background and experience join the ACT Holdings team,” says Mike Meyer, CEO of ACT Holdings. “I have great respect for him, his leadership capabilities and operational experience and I look forward to leveraging his skill set across all the ACT Holdings clients and verticals we service. Chad is an incredible addition to our senior leadership team and will help us continue to provide outstanding service to our clients and grow our business.”

As the COO, Benson will be responsible for operations and data analytics for all ACT Holdings companies: Convergent Outsourcing, Inc., Convergent Revenue Cycle Management, Inc., Convergent Healthcare Recoveries, Inc. and Account Control Technology, Inc. He will oversee day-to-day operations, including strategy creation and building employee alignment with client and company goals. Benson has more than 20 years of leadership experience in financial services and technology, specializing in growth management, capital planning, operational and customer lifecycle management.

Most recently, Benson served as the Chief Executive Officer at CBE Companies, a global provider of outsourced call center solutions with more than 1300 employees and five locations. Prior to joining CBE Companies, Benson directed and managed a multimillion division at Capital One where he consistently sought to drive profit and process optimization, ensured all operational goals and metrics were achieved while cultivating credible and trusted partnerships with employees and clients.

“I am excited to join such a passionate group at ACT Holdings who are dedicated to delivering innovative BPO and accounts receivable management solutions,” states Benson. “I look forward to working with Mike and the ACT Holdings management team to help facilitate our next phase of growth.”

About Account Control Technology Holdings, Inc. (ACT Holdings)

Account Control Technology Holdings, Inc. provides comprehensive business process outsourcing and financial services to diverse industries. Our companies partner with clients to help them run the “business” behind their operations so they can focus on what they do best – whether it’s serving customers, educating students, caring for patients, or keeping communities moving forward. ACT Holdings companies include Convergent Outsourcing, Inc., Convergent Revenue Cycle Management, Inc., Convergent Healthcare Recoveries, Inc. and Account Control Technology, Inc. with locations across the US and offshore. For more information, visit www.accountcontrolholdings.com.