Payment Savvy Has Been Hard at Work Leading a Movement in the Collections Industry to Offer the Program Under Card Brands by Carefully Following the Many Guidelines

PLANO, Texas — Since the day they opened for business, Payment Savvy, has strived to be a real leader in payment processing for account receivables businesses. Once again, Payment Savvy has achieved this goal by recently taking the Convenience Fee Model, or free payment processing, to the next level.

As Eli Smith, Chief Operations Officer of Payment Savvy noted, the company has entirely spearheaded the legalities in the collections industry with some of the best attorney networks, which allows them to offer the No Cost to Biller program under card brands by following the many guidelines in place.

For more information about Payment Savvy and their web payment services, please visit https://www.mypaymentsavvy.com/.

With the most advanced state of the art software and multiple redundant networks tied into the banks, Smith noted, Payment Savvy is the real leader in payment processing for account receivables businesses.  

“We have done the due diligence over the past five-plus years with some of the largest law firms in the U.S. to make sure our agencies stay compliant statewide with the fees. We truly have a well-written platform that pleases our collections agencies as well as their consumers,” Smith said.

“We feel we are so ahead of the game that there are no competitors in the space matching our products and services within the collections industry.”

By improving the Convenience Fee Model, Smith said Payment Savvy enhanced the offer tremendously to include many new functionalities for their B2B merchants. As Smith noted, this is all part of the company’s devotion to pumping both money and time into their software platform to make it the best possible product for the industries they serve.

The fact that Payment Savvy has worked so hard to make sure the Free Payment Processing Model was as advanced and innovative as possible will not surprise their satisfied clients. The company has earned a well-deserved reputation for their outstanding and fully integrated web payment solutions as well as commitment to customer service.

About Payment Savvy

Payment Savvy is a fully integrated payment processor to the following industries: Collections Agencies, Consumer Finance, Billing Companies, Credit Unions, Healthcare, Utilities, Government, and Schools. To learn more about Payment Savvy, visit https://www.mypaymentsavvy.com or call (866) 303-2558.

ARLINGTON, Va., — Numeracle™ Inc., the pioneer of robocall blocking and labeling visibility in the new calling ecosystem, announced the expansion of its NumeraList™ number registration services to include the addition of thousands of new numbers from verified, trusted and known entities spanning the communications, broadcasting and consumer services industries to be distributed on behalf of call originators across the network.

NumeraList, the industry’s first ecosystem-wide registration service, allows legal businesses to distribute the numbers they use to reach customers across the largest audience of analytics companies, carriers and the developers of call blocking and labeling apps across the network. This service, originally limited to Numeracle clients, is now open to the entire industry, creating a vehicle for call originators to verify their status as a trusted provider of legal business calls and communicate to the network how they would like their calls to be labeled.

For businesses utilizing the voice channel as an essential method of communication with customers, the steady increase in both the frequency and tenacity of illegal robocall scams has caused a continuous decline in customer engagement and company reputation in addition to lost revenue. Numeracle reports the average drop in call contact rates ranges from 10-15 percent and up to 90 percent in extreme cases, but across both ends of this spectrum, it is the lack of visibility and control into how to correct this issue that has inspired the call to action to which Numeracle has responded.

Numeracle has heard the call for an industry-wide solution to return viability and trust to the voice channel.

REBEKAH JOHNSON, FOUNDER & CEO, NUMERACLE

“We have heard the call for an industry-wide solution to return viability and trust to the voice channel,” said Rebekah Johnson, founder and CEO, Numeracle. “Through the support and feedback of our partners and clients, we have built the NumeraList platform together as a channel for legal businesses to take the first step in correcting the negative consequences of incorrect call blocking and labeling and to begin the process of returning trust and connectivity to their customers.”

Prior to distributing any entity’s registration information to stakeholders across the network, Numeracle validates all organizations for legal identity and call compliance to ensure bad actors are blocked from engaging in fraudulent activity on the network. This additional verification step provides an important level of trust for all parties contributing to and analyzing the data collected as part of these efforts. 

Numeracle’s full platform of registration, discovery, certification, ongoing monitoring and analysis, and problem remediation solutions empower legal businesses across the healthcare, utility, financial, retail and services industries and comprise the industry’s only end-to-end solution developed to connect all parties across the complex ecosystem together with a common goal.

To start the process of registering numbers for improved call delivery or to gain visibility into how numbers have been affected by the new calling ecosystem, please visit 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 point of discovery into the new calling ecosystem to uncover a number’s entire journey from call origination to destination. By working together with carriers, analytics companies, device manufacturers and the developers of call blocking and labeling apps, Numeracle provides visibility across all major stakeholders and delivers 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.

The end of last week was busy at the United States Court of Federal Claims. In chapter four of private collection agencies (in this iteration, FMS Investment Corp. is the lead) v. The United States (specifically, the Department of Education, or “ED”), ED notified the court that it would commence the recall of accounts from five collection agencies that have been operating under award term extensions (ATEs). This recall had been announced previously, then put on hold without explanation — although the hold closely followed a letter from a Senate committee directing ED not to go through with the recall. 

[For those who need a little more background before proceeding, read Quest for Unrestricted Dept. of ED Collection Contract Enters Round 4.]

On Thursday, June 28, the Senate Committee on HHS, Labor, and Education approved the 2019 Appropriation, including the following:

The Committee is concerned with the Department’s recent management of the defaulted Federal student loan process and with the capacity of current private collection agencies receiving new accounts to be able to properly serve borrowers who have defaulted on their loans. Accordingly, the Committee encourages the Department to extend current contracts with private collection agencies whose award term extensions are set to expire in April 2019, and that are affirmatively meeting all contract requirements, serving the fiscal interest of the United States, and complying with applicable consumer protection laws until the Department is able to transition to a new collections process as part of the Department’s Next Generation Financial Services Environment. Furthermore, the Committee directs the Department not to recall accounts that are not in repayment from such private collection agencies and allow them to continue servicing their current portfolio to avoid disruptions for borrowers, and to comply with the performance reporting requirements of the explanatory statement accompanying the Consolidated Appropriations Act, 2018. (emphasis added)

In response to the notification that the recall would commence immediately (at 4 p.m. eastern on Friday July 13), FMS and friends (GC Services, Windham, ConServe, and ACT) filed an emergency temporary restraining order (TRO), and the court held a hearing by telephone that same day. They requested that ED not be able to move forward with the recall until at least July 27 (or the end of the present case).

The plaintiffs said there have been material developments in the case which support this new TRO. One development was the Senate committee’s language in the 2019 Appropriation. A second was that the House Appropriations Committee passed a version of the FY2019 funding bill for ED, including an ammendment requiring ED to establish debt collection performance targets. The language includes:

“the optimal use of qualified large and small business contractors to help [ED] achieve, at minimum, the average portfolio resolution percentage achieved by [ED] for the period of fiscal years 2015 through 2018.” (emphasis added)

The plaintiffs argue that (1) Congress clearly intends for large collection agencies to be a part of ED’s solution, (2) that the concept of “enhanced servicing” is merely a concept at this point, with no specific timetable or implementation in sight, and (3) that stripping the ATE PCAs of their non in-repayment accounts now will “mortally wound each and every PCA.” (emphasis added)

Two things happened following the emergency telephone hearing. First, ED notified that court that it has agreed to stay its recall of accounts through Thursday July 19. Second, an in person hearing has been scheduled for the same day, at the Court of Federal Claims, to hear oral arguments addressing the legal effect of the Senate Committee’s language directing ED not to recall the accounts.

insideARM Perspective

What can I add at this point? Everyone is wondering what legal authority a Senate committee has to compel action by a government agency. One thing remains true… Judge Wheeler is moving this thing along. I hope he wasn’t planning to take a summer vacation.

On Friday the Bureau of Consumer Financial Protection (BCFP or Bureau) announced a settlement with National Credit Adjusters, LLC (NCA), a privately-held company headquartered in Hutchinson, Kansas, and its former CEO and part-owner, Bradley Hochstein. The company primarily collects debts for online lenders operating on tribal land. Per the announcement,

As described in the consent order, the Bureau found that NCA and Hochstein used a network of debt collection companies to collect consumer debt on NCA’s behalf. Some of those companies engaged in frequent unlawful debt collection acts and practices that harmed consumers, including by representing that consumers owed more than they were legally required to pay, or threatening consumers and their family members with lawsuits, visits from process servers, and arrest, when neither NCA nor the collection companies intended or had the legal authority to take those actions. NCA and Hochstein continued placing debt with those companies for collection with knowledge or reckless disregard of the companies’ illegal consumer debt collection practices. NCA and Hochstein also sold millions in consumer debt to one of those companies with knowledge or reckless disregard of the company’s illegal consumer debt collection practices.

Under the terms of the consent order, NCA and Hochstein are barred from certain collection practices and Hochstein is permanently barred from working in any business that collects, buys, or sells consumer debt. The order imposes a judgment for civil money penalties of $3 million against NCA and $3 million against Hochstein. As explained in the order, full payment of those amounts is suspended subject to NCA paying a $500,000 civil money penalty and Hochstein paying a $300,000 civil money penalty.

The complete Consent Order can be downloaded here.

This is an enforcement action that began during the Cordray management era of the Bureau. Reuters reported back in March of this year that Mulvaney had decided to drop the case. The article quoted NCA’s attorney, Sarah Auchterlonie, saying “(Cordray) had a theory that was really out there and I think everything related to it is being pulled back,” and that the case is “dead.”

It’s unclear what happened between March and July that would revive the matter, but the following are highlights of the Bureau’s findings:

• In addition to placing and selling accounts to the companies in question, Hochstein and NCA helped to draft and implement policies and procedures to create the false impression in original creditors that the collection agencies complied federal consumer financial laws; defending agencies when creditors raised concerns about their practices; preventing NCA’s compliance personnel from conducting appropriate and effective reviews of the collection agencies; and refusing to implement corrective recommendations made by NCA’s compliance personnel.

• Hochstein determined which agencies NCA would place debt with, which relationships would be terminated, and which accounts and under what terms the agencies would collect.

• Hochstein and NCA were aware of the conduct of the agencies but didn’t prevent it, and continued to refer accounts to those agencies even after learning that they frequently inflated account amounts, threatened to take legal actions that NCA didn’t have the intention or legal authority to take, and ignored NCA’s compliance department.

• NCA and Hochstein regularly exerted control over the agencies, including providing instructions for collection conduct, setting benchmarks, moving accounts between agencies based on performance, directing agencies to hire or fire employees, and withdrawing accounts from agencies based on financial performance, but not misconduct.

The Bureau claims that consumers couldn’t reasonably avoid injury because they often lacked access to the documentation indicating how much they actually owed and were unlikely to know what authority the collection agencies had to follow through on claims of legal action. 

Per the Order, Hochstein is permanently restrained from acting as an officer, director, employee, agent or advisor of, or otherwise providing management, advice, direction or consultation to, any individual or business that collects, buys, or sells consumer debt.

NCA is required to submit a compliance plan to the Bureau’s Enforcement Director within 30 days. The company’s Board must review all submissions required by the Order (including plans, reports, programs, policies and procedures), and will have ultimate responsibility for proper and sound management of NCA. A copy of the Order must be provided to each current or future (for 5 years) member of its board, as well as any officers, managers, employees, agencies, debt buyers or others with responsibilities related to its subject matter.

Neither NCA nor Hochstein admitted (or denied) any of the findings of fact or conclusions of law in their consent to the Order.

insideARM Perspective

We don’t know what we don’t know. Is there a lesson for others besides the obvious (avoiding the illegal alleged conduct)? It’s interesting. The Order really throws Hochstein under the bus, suggesting that he knew about – or even encouraged – the illegal conduct, and allowed it in spite of the efforts of his own compliance team. The Order then requires an extensive plan for how to ensure that the company’s compliance management system will operate properly in the future. I don’t have access to the discovery documents, it sounds like there was indeed a compliance management system, but it was circumvented by the guy in charge. What’s the right check and balance for that? 

Meanwhile, an internet search for “National Credit Adjusters” and “consent order” also produced a 2016 Order from the New York State Department of Financial Services (read it in full here), which found that between 2007 and 2014 the company “pursued and collected payments made on thousands of usurious payday loan accounts” which were void and unenforceable. The company was also accused of harassing consumers by repeatedly calling them at home and at work, threatening to call employers, and pressuring family members.

insideARM maintains a free FDCPA resources page to provide the ARM community a destination for timely and topical information on the Fair Debt Collection Practices Act (FDCPA). This page is generously supported by TransUnion. 

The cornerstone of the page is a chart of significant FDCPA cases. Click on the link in the chart for the complete text of the decision. Where insideARM has published a story on the case, we provide a link. Case information and analysis is provided by Joann Needleman, a Clark Hill attorney and leader of the firm’s Consumer Financial Services Regulatory & Compliance Group. 

Twenty cases were added to the chart for June: nine postitive, and 11 negative. We’ll look at five.

—–

Satran v. LVNV Funding, LLC

Win or Loss? Loss

Issue(s): Right to cure, meaningful attorney involvement, 1692e

The consumer’s complaint — which the court allowed — is that the collection agency violated both the FDCPA and the Wisconsin Consumer Act by not alerting the consumer that he could have made up the defaulted amount without going into collections. The consumer was also not convinced that an attorney was meaningfully involved. The court said, “Yep, you’re right,” to the consumer and here we are. 

Nicole MAGANA, Plaintiff, v. AMCOL SYSTEMS, INC, et al., Defendants (case currently not available on PACER)

Win or Loss? Win

Issue(s): Overshadowing, 501r

The agency sent a demand letter, including the 1692g language. (“You have 30 days to dispute,” etc.) Additionally, because this was a healthcare claim, the agency also included the necessary 501r language: if the patient needs assistant with their bill, they may qualify for financial assistance. (Note: this kind of language is only necessary if the hospital is a non-profit.) The consumer argued that this was overshadowing. The court said, “Nope. The agency did what it was supposed to do here.”

NORMA I. SANTIAGO, on behalf of herself and those similarly situated, Plaintiff, v. CAVALRY PORTFOLIO SERVICES, LLC, CAVALRY SPV I, LLC, JOHN DOES #1-10, Defendants.

Win or Loss? Loss

Issue(s): Statute of limitations, shopping at J.C. Pennyes

Norma Santiago bought goods at J.C. Penney. She bought these items on credit, didn’t keep up with the payments, and hoped that she qualified for the 4-year statute of limitations so if she just waited long enough everyone could put this behind them. Cavalry believed that the statute of limitations should be 6 years, rather than 4, because it was an extension of credit. The Court said that, among other things, the J.C. Penney charge card was only a J.C. Penney’s charge card, not useable anywhere else, and so fell under the 4-year statute.

YANNSI ESPINAL, Plaintiff, v. AFNI, INC., Defendant.

Win or Loss? Win

Issue(s): Statute of limitations

In this case, unlike the one above, the consumer did not qualify for a shorter statute of limitations. The consumer tried to argue that their debt was governed by the FCA (Federal Communications Act), which has a 3-year s.o.l. AFNI, and the Court, said, no, it’s a 6-year s.o.l. 

McGrail v. Law Offices of Michael R. Stillman, P.C.

Win or Loss? Win [updated]

Issue(s): Garnishment, misidentified debtor

Michael Stillman’s law office garnished McGrail’s wages for a debt. When McGrail discovered the garnishment, McGrail said, “That’s not my debt. Stop garnishing my wages.” Stillman asked for verification that this McGrail wasn’t the one they were looking for, and she didn’t not comply. The Court found for the defendant, since the plaintiff did not provide proof of identification.

JACKSONVILLE, Fla. – PaymentVision, a leading provider of electronic payment processing technology and merchant processing for financial services, government, and utility industries in conjunction with Fidelity Express, a leader in the walk-in bill payment and money order space, announced a partnership and planned integration. The integration will expand the payment processing options for Fidelity Express clients and provide streamlined walk-in bill payment services to PaymentVision clients. 

The planned integration will be completed this quarter, providing billers and receivables management firms with a number of new features, including:

• In-Person Payments: Consumers can pay their bill in-person at thousands of retail agent locations across the nation.
• Staffing Efficiencies: Retail agent locations are staffed by trained customer service personnel in consumer’s local market.
• Accept All Forms of Payment: Give consumers the ability to complete walk-in payments via cash, money order, or check.
• Real-Time Communication: Payments at a Fidelity Express retail agent location are communicated securely in real-time. 

“Fidelity Express has built a strong reputation in the industry with their premier walk-in bill payment solutions,” said Eugene O’Rourke, Vice President of Marketing at PaymentVision. “We are excited to grow our partnership to make it easy for customers to securely process cash and check payments in-person at thousands of walk-in bill payment centers across the nation and seamlessly post activity directly into their existing core billing and collections software.”

“PaymentVision’s commitment to simplifying electronic billing and payment processing for business aligns with Fidelity Express’s core value of making in-person payments just as seamless for the client and their customers,” said K. Neal Barker, Director of Sales and Marketing at Fidelity Express. “Not only does this partnership allow us to offer our clients more payment processing options, but we get to deliver a needed walk-in bill payment service to PaymentVision clients who will appreciate how much cash matters to us.”

To learn more about how PaymentVision’s integrated payment solutions can help to improve your business, call (800) 345-7243 or email sales@paymentvision.com to speak with one of our industry experts today. 

About PaymentVision

PaymentVision is a biller-direct, PCI-compliant, electronic payment gateway provider. PaymentVision offers clients the unified ability to accept ACH, check, and credit or debit card payments, by phone, or through Internet channels. PaymentVision solutions handle billions of dollars for thousands of financial institutions, large and small nationwide including, credit unions, banks, consumer finance, and collection agencies. For more information, please visit www.paymentvision.com; follow PaymentVision on Twitter @PaymentVision or on Facebook at www.facebook.com/paymentvision; or call 800-345-7243. 

About Autoscribe Corporation

Autoscribe Corporation is a leading financial services company and payment processor. With more than two decades of innovation and leadership in the financial technology industry, Autoscribe offers a full suite of tools through PaymentVision and Lyons Commercial Data to help their customers grow their business, simplify payment processing, mitigate risk, and ensure compliance. Recently named to the Inc. 5000 as one of the fastest growing private companies in the nation, Autoscribe has thousands of customers and processes more than $1 billion in transactions annually. For more information, please visit http://www.autoscribe.com; follow Autoscribe on Twitter @AutoscribeCorp or on LinkedIn at http://www.linkedin.com/company/autoscribe; or call 800-345-7243. 

About Fidelity Express

Fidelity Express is a leader in the walk-in bill payment and money order space, established in 1988 as a division of GSC Enterprises, Inc. With thousands of neighborhood stores across 22 states and the District of Columbia, Fidelity Express processes millions of payments annually for the cash-paying consumer. Fidelity Express prides itself on being the most flexible and responsive provider in the industry. 

GSC Enterprises, Inc, was established as a family business more than 65 years ago. GSC remains a family owned and operated business, not only devoted to its employees and customers, but also, its community.  

For more information, visit www.fidelityexpress.com. 

Forward-Looking Statements

This press release includes certain “forward-looking statements” including, without limitation, statements regarding future events and Autoscribe Corporation’s business, strategy and results, that are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are sometimes identified by words such as “will”, “may”, “could”, “should,” “would”, “project”, “believe”, “anticipate”, “expect”, “plan,” “estimate”, “forecast”, “potential”, “intend”, “continue”, “target”, “opportunities” and variations of these words or comparable words. As a result of the ultimate outcome of such risks and uncertainties, Autoscribe Corporation’s actual results could differ materially from those anticipated in these forward-looking statements. These statements are based on Autoscribe Corporation’s current beliefs or expectations, and there are a number of important factors that could cause the actual results or outcomes to differ materially from those indicated by these forward-looking statements, including, without limitation, risks related to the successful offering of the products and services of Autoscribe Corporation; and other risks that may impact Autoscribe Corporation’s business. Autoscribe Corporation expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein as a result of new information, future events, or otherwise.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

KNOXVILLE, Tenn. –– Reliant Account Management (RAM) announces a strategic and operational partnership with Telrock, a global SaaS provider of digital channel customer engagement tools used by creditors and collection professionals across the credit lifecycle. The partnership combines the expertise of both companies to improve how consumers enrolled in debt relief programs can more efficiently and effectively engage in payment transactions and related communications by leveraging Telrock’s advanced digital channel communications platform.  

“Consumers today, overwhelmingly, prefer to be contacted through a digital channel, and text messaging (SMS) is their channel of preference” said Wade Torkelson, Vice President of Business Development of Reliant Account Management.  “Our partnership with Telrock will accelerate our drive to provide our customers the most comprehensive, digital channel communication tools designed to enhance the customer experience, increase the number of approved settlements and enable our customers to more easily interact with RAM regarding notifications and alerts, payment intentions, and other customer support functions.”

“By leveraging Telrock’s automated, event-based, digital customer engagement tools, in particular, our rules-based, two-way automated SMS messaging, RAM will now be able to automate the sending of an SMS message to a customer as well as automate the response to a customer SMS message in real time. The result is faster, more convenient, and consistent customer service interactions, that ultimately help to drive more approved settlements and higher customer retention throughout the debt relief program term” said Rob Fite, Vice President, Business Development & Marketing for Telrock. 

About Reliant Account Management

Reliant Account Management, (RAM) is a leading third party, payment processor and trust accounting service provider working with clients across the debt relief, legal, and medical industries.  Through our intuitive, feature rich platform interface, RAM provides reliable, compliant, trust accounting and payment processing solutions designed to facilitate secure commercial transactions.  To date, RAM has processed over 750,000 settlement payments, resulting in approximately $500 Million in savings for consumers enrolled in debt relief programs. 

Contact:
Sara Paquette
Reliant Account Management
Phone: (949) 859-1404
Website: www.ramservicing.com
Email:  sara@ramservicing.com

About Telrock

Headquartered in Atlanta, Georgia and London, England, Telrock is a global technology provider of SaaS based solutions for enterprise-wide collections and recovery, and digital channel customer engagement. Our clients include major banks, other credit providers, and business process outsource companies in North America and Europe. Solutions include Optimus, a new enterprise-class integrated collections and recovery platform with digital channel engagement capabilities, SmartCollect, an intelligent self-serve collections portal with integrated digital channel messaging and SmartService, a lifecycle digital engagement platform for marketing, account servicing, fraud case management, and other similar services. All solutions are SaaS based, built on highly scalable modern, open-source technologies and are deployed in secure, PCI compliant data centres. For more information see www.telrock.com.  

Contact:
Atlanta, Georgia – USA
Rob Fite
Vice President, Business Development & Marketing
Phone: (678) 451-9975
Email: rob.fite@telrock.com 

London, England – UK
Laura Harrison
Head of Business Development & Marketing EMEA
Phone: 07841 632764
Email: laura.harrison@telrock.com

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

If you have not memorized Reyes, Jr. v. Lincoln Automotive Financial Services by chapter and verse, you have some homework to do. In Reyes, the Court applied a theory of common law called “bargained-for exchange of consideration” to its interpretation of an auto lease agreement. This theory applies when the consideration or promise from one party (promisor) is used to induce the other party to a contract (promisee) to incur a legal detriment and/or provide a legal benefit to the promisor. If a court determines the terms of a contract were bargained for and exchanged in good faith between the parties, it will hold the parties accountable to the terms of the agreement and enforce those terms.

In Reyes, the consumer promised– among other things – to agree to various forms of communications, and keep their contact information current throughout the term of the credit/loan/repayment agreement. Because the defendant extended credit in exchange for the consumer’s promise to pay and to keep his contact information current; the Court explained, the consumer could not unilaterally revoke his consent to receive autodialed calls on his cell. The result? Bargained-for consent cannot be revoked without the consent of the other party to the contract. Let’s check the score: Calling party 1; consumer 0.

The common law theory of bargained-for consent also resurfaced in Barton v. Credit One Financial. In this case plaintiff Barton alleged Credit One violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”), when it called his cell phone after he opened a credit card account with Credit One. As a condition to obtaining the credit card, Mr. Barton had agreed to the terms of the Visa/Mastercard Cardholder Agreement, Disclosure Statement and Arbitration Agreement, which provided in part: “by requesting and receiving, signing or using your Card, you agree:

“[y]ou are providing express written permission authorizing Credit One Bank or its agents to contact you at any phone number (including mobile cellular/wireless, or similar devices) or    email address you provide at any time, for any lawful purpose. The ways in which we may contact you include live operator, automatic telephone dialing systems (auto-dialer), prerecorded message, text message or email.”

After receiving what Mr. Barton claimed were harassing phone calls, he asked Credit One to cease and desist communications. The defendant did not comply with Barton’s request and the lawsuit ensued. The district court decided in favor of the defendant credit card company because the consumer had agreed to the terms and conditions of his credit card application, including consent to be contacted on his cell, as an inducement for the credit arrangement. Therefore, as a matter of law Barton could not claim he had unilaterally revoked consent and subsequently sue for having been contacted on his cell in violation of the TCPA.

These two decisions do more for our industry than most people realize. In essence, they provide a legal basis for you to work with your creditor clients, government clients and healthcare provider clients to include bargained-for consent terminology in their contracts, court orders, restitution agreements and admission documents. For example, the following script may be used – only upon the advice of legal counsel – to mitigate risk of a complaint or lawsuit when contacting a consumer:

*This is a template. Use only upon the advice of legal counsel.

You have provided us with the following cellular number__________ and the following email address __________.

By signing below, you understand and agree you are providing [COMPANY] and its affiliates, agents and service providers with your express consent to use written, electronic or verbal means to contact you.

This consent includes, but is not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems about the [extension of credit/loan/services] provided to you today or in the future.  

You may revoke consent for us to contact you by any of these methods or otherwise restrict your permissions as provided in this form by simply calling us at ______________ between the hours of ____________, Monday through ___________, or visiting our business office any time you are at our facility, or on our website at _____________.

How would bargained-for consent give you an edge in your contact strategy? Take a minute or two to think about it, and talk it over with your executives and legal counsel. It’s just one more way you might be able to strengthen your compliance program, avoid risk, and continue moving your operation on the progressive trajectory you’ve already established for yourself and your agents.

[The article below is by Mike Bevel, Director of Education for the Compliance Professionals Forum. It first appeared in our Compliance Weekly newsletter – a concise and witty rundown each Wednesday, giving you just what you need to know on the compliance front. If you’d like to subscribe to that publication, click here. Note: Mike has conversations with himself. Your mileage may vary; feel free to engage him in the comments.]

Michael.

Michael.

You’re looking well.

I am very handsome.

We’re talking today about call-baiting. Specifically, how I don’t believe this is a thing that happens.

Okay, but it does. Listen to any call audit session and you may very well hear a collector being baited by a consumer.

What is call baiting?

Do you…really not know? It’s that thing where a consumer calls and, knowingly, tries to direct the phone call in ways that will cause the collector to break the law. Then, you just sit back and enjoy the profits!

Like, for instance, this new “overshadowing” technique recently talked about in a Moss & Barnett podcast. Consumers are being trained to ask due-date questions during the validation period, and then suing for overshadowing afterwards.

So, it’s less that the consumer baited the collector, and more that the collector made a mistake. (By the way, let’s circle back on that podcast before we wrap-up.)

Prompted by the consumer. Let me beat you to your punch, Mike. I see where you’re headed with this: that a person can’t be tricked into breaking the rules if they know the rules. But a person can be tricked into any number of things! Human beings, at heart, want to be helpful because being helpful is a form of telling someone what to do. And we LOVE telling others what to do.

There’s something disingenuous about consumers – and consumer attorneys, by the way – exploiting human nature for expensive lawsuits.

I guess what I worry about, though, is how “call-baiting” allows the responsibility of the infraction to not land anywhere. “It’s not a problem with our training/trainers! It’s call-baiting!” Or, “This call would have gone just fine if it wasn’t for those meddling call-baiters!”

If you’re not already doing so, I think it’s a great practice to allot, like, 15 or 20 minutes each day on YouTube NOT watching old clips of Bobbie Gentry, but instead watching videos published by consumers and consumer advocates showing what steps to take to get out of paying a debt.

What is going on in that Bob–?

Strong scripting, too, will help collectors not make mistakes with the law. Knowing what these consumers are doing, and prepping for that, will help minimize your FDCPA suits.

And what about that podcast? You wanted to mention something?

Oh yeah! I love John Rossman. I do. And. I struggle with his suggestion that a collector can say, “This is past due. When can you pay?” Especially during the validation period. There is no guarantee, at that moment in time, that the person you’re speaking to is the owner of the debt you’re collecting. That’s the whole point of that validation period, right? So saying, “It’s past due. When can you pay?” feels…it’s not how I run my non-existent collection agency, is how I’ll finish this section. Am I wrong?

Over the last few weeks we have written numerous articles assessing Telephone Consumer Protection Act (“TCPA”) cases addressing the scope of the statute’s definition of automated telephone dialing systems (“ATDs”) as the decisions have been handed down. With July 4th week being a bit light on TCPA developments, we decided to pause and provide some further insight on the shifting TCPA landscape and especially the ongoing battle over the scope of the ATDS definition.

The current roster of pertinent post-ACA Int’l TCPA cases addressing the ATDS issue are as follows (in order of decision):

1. Marshall v. CBE Group, Inc., Case No. 2:16-cv-02046-GMN, 2018 WL 1567852 (D. Nv. March 30, 2018)(FCC’s rulings holding that predictive dialers are an ATDS are no longer binding following ACA Int’l);
2. Reyes v. BCA Fin. Servs., Inc,. No.: 1:16-cv-24077-JG, 2018 U.S. Dist. LEXIS 80690 (S.D. Fla. May 14, 2018)(ACA Int’l did not expressly overruled FCC’s predictive dialer rulings so they remain binding);
3. Herrick v. GoDaddy.com LLC, No. CV-16-00254-PHX-DJH, 2018 WL 2229131 (D. Ariz. May 14, 2018)(FCC’s rulings holding that predictive dialers are an ATDS are no longer binding following ACA Int’l);
4. Swaney v. Regions Bank, No.: 2:13-cv-00544-JHE, 2015 U.S. Dist. LEXIS 184751 (N.D. Ala. May 22, 2018)(2003 FCC predictive dialer ruling remains binding);
5. Maddox v. CBE Grp., Inc., No.: 1:17-cv-1909-SCJ, 2018 WL 2327037 (N.D. Ga. May 22, 2018)(“human intervention” test from FCC’s 2003 predictive dialer rulings survived ACA Int’l);
6.  McMillion v. Rash Curtis & Associates, No.: 16-cv-03396-YGR, 2018 U.S. Dist. LEXIS 101700 (N.D. CA, June 18, 2018)(ACA Int’l did not disturb prior Ninth Circuit rulings on predictive dialers);
7. Sessions v. Barclays Bank Delaware, Civ. Action No. 1:17-CV-01600-LMM, 2018 WL 3134439 (N.D. GA June 25, 2018)(ACA Int’l overruled FCC’s predictive dialer rulings);
8. Dominguez v. Yahoo, Inc., 2018 U.S. App. LEXIS 17350  (3rd Cir. June 26, 2018);(systems that lack the present capacity to dial randomly or sequentially do not qualify as an ATDS under the TCPA);
9. Case That Will Not Be Named, NO. 3:17–cv–00505, 2018 WL 3134619 (M.D. Tenn. June 27, 2018)(Predictive dialer rulings survived ACA Int’l);
10. King v. Time Warner Cable, Case No. 15-2474-c, 2018 U.S. App. LEXIS 17880 (2nd Cir. June 29, 2018); and
11. O’Shea v. Am. Solar Sol., No. 3:14-cv-00894-L-RBB, 2018 U.S. Dist. LEXIS 110402 (S.D. Cal. July 2, 2018)(following Swaney and holding that FCC’s predictive dialer rulings survived ACA Int’l).

Looking at the numbers the score on the predictive dialer issue is as follows:

• 4 district court cases holding that the predictive dialer rulings survived ACA Int’l(Reyes, Swaney, CTWNBN, and O’Shea); 
• 3 district court cases hold that ACA Int’l overruled the FCC’s earlier predictive dialer rulings (Marshall, Herrick and Sessions);
•  1 holds that ACA Int’l did not disturb the existing precedent of the Ninth Circuit at all (McMillion); and
• 1 holds that the “human intervention” test of the 2003 predictive dialer ruling survived ACA Int’l (Maddox).

What a mess.

Although the predictive-dialer-rulings-survived camp holds a slight numerical advantage, as shown below, all of the better-reasoned decisions support the “clean slate” approach.  But we’ll untangle this in a moment.

First, let’s recognize that –mercifully– the two post-ACA Int’l Circuit Court of Appeal decisions are in complete harmony, although Dominguez goes further than King in one important respect. Here’s the (much needed) harmony– both King and Dominguez agree that only the present “capacity” to perform the functions of an ATDS are relevant in assessing whether or not equipment qualifies under the TCPA. That is a big win for callers who had long struggled under the FCC’ 2015 TCPA Omnibus formulation that converted any software-enabled dialing device into an ATDS. While the win in ACA Int’lobliterated the “potential” capacity formulation adopted by the FCC, it did not necessarily follow that the courts would adopt a “present” capacity approach after the Omnibus crumbled. With Dominguez and King both independently analyzing the issue and reaching the same conclusion, however, it is a good bet that the TCPA’s “present” capacity bed is now made and is unlikely to be disturbed when the FCC addresses the issue following its Public Notice seeking comment on the scope of the statute.

King and Dominguez are consistent on a second point of import as well–both Circuit Court of Appeal decisions agree that ACA Int’l is binding across the country as to the viability of the FCC’s previous ATDS pronouncements. (As we shall see, most–but not all–district court decisions are in accord).

Nonetheless, the issue of what functionalities equipment must perform to qualify as an ATDS remains the subject of hot debate. While Dominguez holds directly that equipment must randomly and sequentially generate numbers and dial them to qualify as an ATDS–that’s what the statute says, after all–King refuses to address the issue and expressly reserves it for the district court to decide on remand. And, importantly, neither Kingnor Dominguez involve predictive dialers so TCPAland still lacks a Circuit Court of Appeals decision on that issue.

The debate over what functions an ATDS must be able to perform must rank as among the least likely debates in legal history. This is so because Congress actually specificallyarticulated those functions with a degree of precision that is rarely found in federal statutes: “to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” See 47 U.S.C. Sec. 227(a)(1). So even the very earliest TCPA decisions–all from state courts for that matter–had little problem reading the statute to mean just what it says–if the device does not use a random or sequential number generator it is not an ATDS. And that, of course, is the very result Dominguez just reached as well.

So why the hot-tempered debate today? Its no mystery really. The FCC took it upon itself to expand the statute beginning in 2003 and again in 2008 and ultimately in 2015 in response to complaints about “robocalls” from consumers that it could not address through any other vehicle but the TCPA. The 2003 and 2008 orders held that predictive dialers are subject to the statute because they can dial a bunch of numbers at a time without human intervention–overlooking that the statute requires random or sequential number generation.

The D.C. Circuit Court of Appeal did not overlook that fact, however, and in ACA Int’l criticized the FCC for issuing the 2003 and 2008 orders in vague reliance on new functionalities–calling a lot without human intervention–although both the statute and the FCC’s own 2015 TCPA Omnibus ruling require random or sequential number generation to pass muster as an ATDS. So ACA Int’l specifically set aside the 2015 TCPA Omnibus ruling as inconsistent with previous orders (and itself). But the question remains–were the 2003 and 2008 predictive dialer rulings also set aside?

The first Court to address the issue–Marshall v. CBE Group, Inc., Case No. 2:16-cv-02046-GMN, 2018 WL 1567852 (D. Nv. March 30, 2018)–said “yes.” And why not? The D.C. Circuit Court of Appeal specifically held that it was empowered to review the 2003 and 2008 Orders, after all, and went on to find that those orders were inconsistent with the functionalities required by the statute and the Omnibus. ACA, Int’l at 701. So Marshall’srefusal to apply those predictive dialer rulings in favor of the Plaintiff in that case was hardly surprising.

But we all knew the other shoe was going to drop and drop it did. In Reyes v. BCA Fin. Servs., Inc,. No.: 1:16-cv-24077-JG, 2018 U.S. Dist. LEXIS 80690 (S.D. Fla. May 14, 2018)  the Court correctly observed that ACA Int’l preserves the FCC’s ability, on remand, to adopt anew a broad definition of “ATDS” that includes predictive dialers. The Reyescourt then leaps to the conclusion that since the FCC is currently empowered to re-adopt those earlier predictive dialer rulings, the earlier orders must still be in effect. But that seems a classic non sequitur.  Sure, the FCC may properly adopt the findings underlying its predictive dialer rulings a second time—and this time in a manner that does not contradict other orders—but until it does there is simply no binding FCC pronouncement on predictive dialers out there.

Herrick v. GoDaddy.com LLC, No. CV-16-00254-PHX-DJH, 2018 WL 2229131 (D. Ariz. May 14, 2018)–rather famously decided on the same day as Reyes— draws upon the same conclusions made in Marshall. It holds that the FCC’s predictive dialer rulings are “defunct” following ACA Int’l and refuses to apply the rulings or any cases relying on them to the dispute before it.

Following Herrick was Swaney v. Regions Bank, No.: 2:13-cv-00544-JHE, 2015 U.S. Dist. LEXIS 184751 (N.D. Ala. May 22, 2018), which seesawed back the other direction. Swaneyreaches the curious conclusion—without supporting analysis— that ACA Int’l overruled only part of the FCC’s 2015 TCPA Omnibus ruling respecting ATDS usage, but not all of it.  The Swaney court seems moved by the ACA Int’l panel’s citation to the 2003 FCC Order for the proposition that not all predictive dialers dial randomly or sequentially—see Swaney at *2— but the D.C. Circuit Court of Appeal’s citation in that respect merely sets up a record conflict between the FCC’s findings in that earlier order with the functionalities listed in the Omnibus ruling. Far from citing the 2003 FCC Order with approval, therefore, the portion of ACA Int’l referenced in Swaney was merely noting an inconsistency in the FCC’s various orders. Unfortunately the analysis in Swaney is very lean so this portion of the Court’s ruling is somewhat mysterious.

Maddox v. CBE Grp., Inc., No.: 1:17-cv-1909-SCJ, 2018 WL 2327037 (N.D. Ga. May 22, 2018)–decided the same day as Swaney–is even more mysterious.  In Maddox the Court used the FCC’s 2003 predictive dialer as a sword and—without passing on the functionalities required of an ATDS—determined (without any real analysis) that the FCC’s focus on human intervention in its 2003 order remained binding after ACA Int’l . Maddox, therefore, does not address the functionalities of a predictive dialer or hold that such dialers satisfy the statutory definition of an ATDS.

At this point in the timeline, some observers began to observe that there might be a geographic bend to these decisions–courts in the Eleventh Circuit seemed content to continue applying the FCC’s earlier rulings whereas courts out west were more inclined to lean toward ruling that the D.C. Circuit Court of Appeal dispatched with those rulings. But that theory wouldn’t last very long.

On June 18, 2018 the Northern District of California torpedoed it by entering the fray with McMillion v. Rash Curtis & Associates, No.: 16-cv-03396-YGR, 2018 U.S. Dist. LEXIS 101700 (N.D. CA, June 18, 2018)–a case going a completely different direction. Unlike all other district and circuit court of appeal decisions to address the issue to date, McMillion held that ACA Int’l was simply not binding on it and that the Ninth Circuit’s previous authority applying the FCC’s predictive dialer rulings remained good law.

The best-reasoned case to date followed next–a ruling out of the Eleventh Circuit holding that the predictive dialer rulings were, in fact, overruled by ACA Int’l. In Sessions v. Barclays Bank Delaware, Civ. Action No. 1:17-CV-01600-LMM, 2018 WL 3134439 Judge May of the Northern District of Georgia rolls up her sleeves and really spends some time with the D.C. Circuit’s ruling. She concludes:

the D.C. Circuit [in ACA Int’l] clearly held that it invalidated all of the FCC’s pronouncements as to the definition of “capacity” as well as its descriptions of the statutory functions necessary to be an ATDS…[and despite the FCC’s challenge to the Circuit Court’s ability to review the earlier predictive dialer rulings] the D.C. Circuit “set aside the [FCC’s] treatment of those matters” without qualification.

That’s just pristine. The Sessions court also analyzed the binding effect of ACA Int’l and–contrary to McMillion and consistent with the conclusions in Dominguez and King–concludes that ACA Int’l was binding upon it. The Court, nonetheless, stopped short of dismissing the ATDS allegations before it, exercising laudable judicial restraint on the issue.

The last case we can address here is O’Shea–remember, we can’t discuss one of these cases. Although O’Shea followed Swaney–again with very limited analysis–the procedural posture needs to be noted. O’Shea was decided on an ex parte by a defendant for leave to file a further summary judgment motion in a case that has already been through one set of motions and cross-motions for summary judgment and certification briefing. Not surprisingly, perhaps, the defendant’s belated attempt–on an ex parte basis–to re-address the ATDS issues fell upon deafer-than-average ears. The analysis in O’Shea is lean and limited and Sessions is not mentioned.

Bringing it all together, outside of the predictive dialer context it is clear that only present “capacity” matters and the required functionalities of an ATDS are likely those embedded in the statute per Dominguez. The debate over predictive dialers continues, but the best-reasoned decisions all appears to line up behind the conclusion that ACA Int’l set aside the FCC’s earlier predictive dialer rulings. The district court decisions reaching the contrary result seem to turn on one of three flawed premises: i) that the ACA Int’l ruling stated that it would bless a future predictive dialer ruling (which says nothing on the issue of whether past predictive dialer rulings remain binding); ii) that ACA Int’l cited the 2003 ruling for the proposition that not all predictive dialers operate using a random or sequential number generator (which is not, in and of itself, a basis to conclude that the D.C. Circuit intended to maintain that ruling after determining that it was inconsistent with the Omnibus); and/or iii) that ACA Int’l is not binding on district courts in other circuits (which both Circuit Court of Appeals addressing the issue disagree with). And TCPAland still awaits a Circuit Court of Appeal decision on the predictive dialer issue–or better yet, a primary jurisdiction stay ruling–to provide further desperately-needed clarity.

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Editor’s note: This article is provided through a partnership between insideARM and Womble Bond Dickinson. WBD powers our TCPA case law chart and provides a steady stream of their timely, insightful and entertaining take on this ever-evolving, never-a-dull-moment topic. WBD – and all insideARM articles – are protected by copyright. All rights are reserved.