[Authors Note: The following is just my opinion. It does not represent the views of my firm, my partners or my clients. But I happen to think I’m right on this, so I’m going to share it with TCPAland.]

The National Consumer Law Center (“NCLC”) submitted perhaps the most comprehensive pro-consumer comment in response to the FCC’s recent Public Notice seeking comment on the scope and architecture of the Telephone Consumer Protection Act (“TCPA”).

The Comment takes on an ambitious project–convincing the FCC that legitimate American businesses are primarily responsible for the scourge of robocalls that are plaguing this country. By extension the NCLC urges that the FCC must continue to read the TCPA–which prevents calls made using certain regulated technologies without consent– broadly so as to encourage more lawsuits against these businesses to keep their calling practices in check. Unfortunately the NCLC resorts to questionable and cherry-picked data–as well as to some unproven hearsay claims–to support its position.

First, it is important to understand why the NCLC went on the attack against legitimate American companies in the first place. Why not just agree with the common experience of most Americans that robocalls are terrible pre-recorded scam calls launched by fly-by-nights and overseas scoundrels? Why accuse most every bank in the country of being a prolific robocaller when–as shall be seen below–their most common “robocall” are account alerts that don’t bother anybody? Why try to make villains out of lenders providing account information to consumers?

The answer is nuanced but ultimately comes down to a simple fact–the TCPA’s private right of action does nothing to prevent true robocalls. The statute can be read as broad as you’d like but illegal scammers and phishers–hiding their identities and often launching calls from overseas–do not obey the laws and will keep on coming no matter how the TCPA is interpreted. These people fear nothing but massive governmental or carrier-level intervention and private lawsuits brought in the United States mean nothing to them. Nothing at all. Indeed, the consumer-rights lawyers out there–with very few exceptions–will not even waste their time trying to find and sue them. So the bad guys get away. And American businesses get chased around the mulberry bush with TCPA cases over and over again.

In order to keep the TCPA nice and broad, therefore, the NCLC has to convince the FCC that everything I just wrote is false. Otherwise the FCC might narrowly-read the TCPA recognizing that it does nothing but ensnare legitimate American business in endless lawsuits while having virtually no impact on the true bad actors. (Indeed, the clearest proof that a “broad” TCPA does nothing to prevent “robocalls” is contained in NCLC’s own data demonstrating that “robocall” complaints doubled after the FCC massively expanded the statute in 2015–but we’ll get to that in a second.)

So let’s dig in.

In its comment–available here NCLC – TCPA Comments— the NCLC begins by characterizing the questions before the FCC as “momentous” and noting that the FCC’s interpretive ruling on the TCPA will “impact the daily lives of hundreds of millions of American[s].”  It then makes the fairly uncontroversial assessment that “robocalls”–whatever that means–are both unwanted and on the rise.

The Comment provides the chart below as proof:

Notably, the chart shows a massive increase in robocalls following the FCC’s 2015 TCPA Omnibus ruling–a ruling that greatly expanded the reach of the TCPA. If a broad TCPA is effective and necessary to prevent robocalls, therefore, one would have expected that trend to decrease rather than increase.

But there are larger points to be made here.

The data in this chart is pulled from something called YouMail. If you’ve never heard of YouMail and wonder who died and made it king of defining and identifying robocalls, you’re not alone. According to NCLC’s Comment, however, YouMail is a “call-blocking app provider” so I guess that makes it a reliable source of robocall data?

But let’s assume, for a moment, that YouMail is accurate and tracking….something. That still leaves the question of what a robocall is according to YouMail and how, if at all, that definition tracks with the reading of the TCPA that the NCLC prefers. Unfortunately those questions are largely unanswered in the Comment. So the value we derive from this chart is that YouMail is picking up a lot more of something it calls “robocalls” and they have increased since the Omnibus ruling in 2015.

Hmmm. Ok.

Nonetheless, NCLC boldly asserts that with this YouMail data “we know well enough who is making the overwhelming majority of robocalls…” The Comment then identifies numerous legitimate and well-respected American businesses –by name–in a chart, that I will not reproduce here, entitled “Top Twenty Robocallers in the United States.”  To put a fine point on it the Comment states: “Banks, credit card companies, retailers, and debt collectors, all of whom were collecting debts, according to the robocall blocker, took seventeen of the top twenty spots.”   It arrived at these names, apparently, by looking up the phone numbers identified on YouMail’s “robocall” index and calling them to see who those numbers belonged to.

Hmmm. Ok.

And then things get really squirrelly–in my opinion. In the only piece of the Comment shedding light on what a “robocall” might be according to YouMail, the NCLC supplies the following chart:

So 28% of YouMail’s “robocalls” are account alerts. That’s interesting and weird. As even the NCLC Comment concedes: “Very few of the calls in the first category—Alerts and Reminders—are blocked.”  See Comment at p. 6. But those are the very sort of messages that the businesses NCLC contends are the top “robocallers” are most likely to send. So NCLC is complaining most loudly about American businesses who are sending the “robocalls” that bother consumers the least…

Hmmm. Ok.

On the other hand, NCLC concedes that “[u]sers of the call-blocking program routinely block all of the calls in the bottom two categories—Telemarketing and Scams.” See Comment at p. 6. So doesn’t that mean the “true” robocalls causing all the trouble are the ones that are telemarketing and scam calls that are–contrary to the NCLC’s narrative–the very calls that the businesses identified in the Comment are least likely to send?

Hmmm. Ok.

Indeed, the only ounce of information directly addressing consumer responses to debt collection calls in the Comment comes from unspecified “information [that] was provided by Alex Quilici, CEO of YouMail”–yes, I’m serious. That’s it. Relying on something Mr. Quilici apparently said to the NCLC (over the phone?) the NCLC Comment reports that “most” of these calls are blocked by their recipients.

Well. There you have it. Based on the word of the CEO of a single call blocking app, “most” debt collection “robocalls”–whatever that means– were blocked by their recipients, so legitimate American businesses must be to blame for the scourge of robocalls plaguing this country and we need more TCPA lawsuits.

Convinced yet?

Wait, there’s more.

Take the point made at page 12 of the comment. There NCLC provides this handy chart:

That seems pretty convincing actually. Robocall complaints have gone up 100% since 2015. YouMail’s “robocall” count has gone up 100% since 2015. But TCPA lawsuits have only gone up 19% since 2015. So maybe we do need more TCPA lawsuits.

But wait a minute. What if we looked prior to 2015?

Well here’s the data: According to the FTC’s website there were 1,734,603 “robocall” complaints in 2014 and 2,182,158 “robocall” complaints in 2013. By comparison there were 1,904 TCPA lawsuits in 2013 and 2,558 TCPA lawsuits in 2014. The FTC had 4,501,967 complaints in 2017 and NCLC (somehow) computed 4392 TCPA filings that year.

Using the FTC’s figures and accepting NCLC’s calculation of TCPA filings, therefore, we’ve seen a 106% increase in robocall complaints between 2013 and 2017–that is indeed a large increase–but TCPA lawsuits increased 131% during that same timeframe. So TCPA lawsuits actually outpaced complaints to the FTC during that timeframe.

Even using the more favorable (for NCLC) metrics of 2014 onward, however, we see a 160% increase in complaints between the nadir of such complaints in 2014 vs 2017 figures. TCPA lawsuits lagged behind with a “mere” 72% increase during that timeframe.

But zooming out further, matters get even more stark. For instance news reports from 2010 suggest annual complaints to the FTC of about 780,000 per year. That year there were 354 TCPA filings by my research. So whereas robocall complaints to the FTC increased 5.77x from 2010 to 2017, TCPA lawsuits increased 12.4x–over twice as quickly.

In short, whether TCPA lawsuits are outpacing or lagging behind robocall complaints turns on what arbitrary start date you select.

The logical flaw in all of this analysis however, remains the unfounded assumption that “robocalls”–whatever that word means to you- are prevented by the TCPA. Although NCLC fights hard to link “robocalls” back to legitimate American businesses collecting debts who are subject to lawsuits by the Plaintiff’s bar neither the data, as shown above, nor the common sense experience of the average American supports that conclusion.

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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.

On Friday afternoon Leandra English announced that she would resign her position as Deputy Director of the CFPB (now BCFP or Bureau). English was the Bureau’s chief of staff who was elevated in the 11th hour by outgoing Director Richard Cordray in the hopes she would succeed him. A legal battle lasting more than six months ensued almost immediately, as President Trump instead appointed his budget director, Mick Mulvaney, to lead the Bureau until he could name a permanent replacement. According to the Federal Vacancies Reform Act, Mulvaney could serve a maximum of 210 days (which ended June 22), unless a nominee was being considered.

With just six days to spare, on Saturday June 16 Trump nominated Kathy Kraninger, an associate director at the Office of Management and Budget (OMB) under Mulvaney, for the job.

Deepak Gupta, her attorney, posted the following statement from English on his Twitter account:

“I will be stepping down from my position at the Consumer Financial Protection Bureau early next week, having made this decision in light of the recent nomination of a new Director. I want to thank all of the CFPB’s dedicated career civil servants for your important work on behalf of consumers. It has been an honor to work alongside you.”

He also added his own comment,

“Now that President Trump has decided to seek Senate confirmation of a new Director for the independent Consumer Financial Protection Bureau, Ms. English is stepping down and we intend to file court papers on Monday to bring the litigation to a close.”

Although Mulvaney claims to have had no part in the selection of Kraninger as the nominee, one can’t help but note the similarity between former CFPB director Richard Cordray’s surprise 11th hour promotion of Leandra English (also a relative unknown outside the Bureau) and Trump’s nomination of Kraninger, also an unknown. 

Consumer groups, which have vigorously opposed the temporary appointment of Mick Mulvaney, have cried foul over the President’s nomination of Kraninger, noting that she has zero consumer protection experience. 

The LA Times quoted Bartlett Naylor, a financial policy advocate at Public Citizen who said,

“Kraninger … has neither experience as a regulator nor expertise in consumer financial issues. The nation’s leading consumer financial regulator is not an entry-level job.”

Karl Frisch, executive director of consumer group Allied Progress, said,

“This looks like nothing more than a desperate attempt by Mick Mulvaney to maintain his grip on the C.F.P.B. so he can continue undermining its important consumer protection mission on behalf of the powerful Wall Street special interests and predatory lenders that have bankrolled his career. Kraninger has absolutely no relevant experience that indicates she is qualified to be America’s chief consumer advocate.”

On the conservative side, J.W. Verret, a professor at George Mason University’s Antonin Scalia Law School, said,

“[she is a] mid-level budget staffer lacking expertise, chosen to lead one of the most powerful agencies in the government.”

White House spokeswoman Lindsay Walters said,

“[Kraninger] will bring a fresh perspective and much-needed management experience to the [bureau], which has been plagued by excessive spending, dysfunctional operations, and politicized agendas. As a staunch supporter of free enterprise, she will continue the reforms of the Bureau initiated by Acting Director Mick Mulvaney, and ensure that consumers and markets are not harmed by fraudulent actors. The White House hopes that she will be promptly confirmed by the Senate.”

Meanwhile, we’ll get our first sense of Kathy Kraninger soon, as a Senate hearing has been set for July 19.

Reacting to the news that Leandra English would be dropping her efforts to temporarily lead the Bureau, Linda Jun, Senior Policy Counsel at Americans for Financial Reform, said:

“By taking on the acting director role, Leandra English courageously stood up for the independence of the Consumer Financial Protection Bureau at a particularly difficult and challenging time. Now that the president has engaged in the process of nominating a director for Senate consideration, something he should have done long ago, the time is right to thank Ms.English for her service to consumers and to the law. The public interest community will focus on ensuring that the next director is a champion of consumers in the face of Wall Street and predatory lenders.”

And so begins a new chapter of the BCFP, in which Mick Mulvaney is the uncontested temporary leader.

insideARM perspective

As debt collection rulemaking has been pushed out (yet again) on the Bureau’s calendar — this time to at least March 2019 — the possible change of hands (again) of Bureau leadership figures prominently in the ARM industry’s fate. Acting Director Mulvaney has said that, given the volume of consumer complaints related to debt collection, it should be (is?) among his highest priorities.

It’s unclear whether pushing the date out means that he and his team need time to fully re-consider (start from scratch, even?) the Notice of Proposed Rulemaking that had already been drafted and was on the cusp of being released when Cordray resigned to run for Governor of Ohio, that he hopes to put rulemaking for the industry in the lap of the next guy (or woman), or that he simply wanted to first re-issue other rules that had already been written.

What we do know is that in May the Bureau issued it’s spring update to the OMB’s Unified Agenda, including this statement:

The Bureau is under interim leadership pending the appointment and confirmation of a permanent director. In light of this status, Bureau leadership is prioritizing during coming months:

• Meeting specific statutory responsibilities
• Continuing selected rulemakings that were already underway 
• Reconsidering two regulations issued under the prior leadership

The Bureau has recently launched a “call for evidence” to ensure that it is fulfilling its proper and appropriate functions to best protect consumers. As part of that initiative, we are seeking public feedback through a number of Requests for Information (RFIs) with respect to the regulations that the Bureau inherited from other agencies as well as regulations that the Bureau itself promulgated and issued. In addition, we are in the process of assessing the effectiveness of three rules pursuant to section 1022(d) of the Dodd-Frank Act. Future agendas will take into account the feedback received through the call for evidence and the assessment projects to identify areas in which issuing, modifying, or eliminating rules may be appropriate to achieve the Bureau’s strategic goals and objectives.

I am certain of one thing; the next eight months will be as event-filled as the last eight have been.

In the second Court of Appeals decision to reach the TCPA’s definition of ATDS this week, the Second Circuit Court of Appeals held today in King v. Time Warner Cable,Case No. 15-2474-c, 2018 U.S. App. LEXIS 17880 (2nd Cir. 2018) that the TCPA governs only calls made by devices with the current “capacity” to perform the functions of an ATDS. Yet the Court refused to identify just what those required functionalities actually are.

Setting up the analysis, the district court had relied upon the FCC’s now-defunct TCPA Omnibus ruling in determining that the device Time Warner used to make the challenged calls had the “potential capacity”–whatever that means–to randomly or sequentially generate numbers and dial them. The district court granted summary judgment to the Plaintiff on that basis and Time Warner appealed challenging that its device lacked the present capacity to place calls in random or sequential fashion.

The Second Circuit panel begins its analysis of the appeal by finding that the ACA Int’l opinion overruled the Omnibus ruling relied upon by the district court and that the ACA Int’l opinion was binding on it and all other circuit courts of appeals and district courts under the Hobbs Act on that issue: “challenges to the 2015 Order were assigned to the D.C. Circuit, which thereby became ‘the sole forum for addressing . . . the validity of the FCC’s’ order.” King at *9. Thus the King court rejects the district court’s application of the FCC’s Omnibus ruling to the dispute before it and “must decide independently” what the required “capacity” is under the TCPA.

In addressing that issue the King Court holds that the “term ‘capacity’ is best understood to refer to the functions a device is currently able to perform, whether or not those functions were actually in use for the offending call, rather than to devices that would have that ability only after modifications.” King at *10-11.

To get there the Court starts with the words of the statute and opens several dictionaries to see what the word “capacity” actually means. After concluding that was a waste of time–all words are ultimately ambiguous (or lies as Nietzsche would urge) and the word “capacity” has multiple meanings–the panel falls back on common sense:  “Common sense suggests that legislation, which typically targets present social problems, would be aimed at devices that have the ‘capacity’…  to cause the problem that is the subject of legislative concern, rather than addressing itself to the hazily defined universe of things that have only a theoretical potential to do so.” Based on the “plain meaning” of the text, therefore, the King court determines to adopt a “narrower definition” than the one proposed by the FCC in the Omnibus. Id. at *14.

The King court hewed closely to the D.C. Circuit’s analysis of “capacity” and drew several nuggets from the ACA Int’l opinion noting it: “correctly dr[ew] a distinction between a device that currently has features that enable it to perform the functions of an autodialer whether or not those features are actually in use during the offending call – and a device that can perform those functions only if additional features are added.” King at *16. The panel found that distinction “persuasive” and concluded “that the former category of devices falls within the definition of an ATDS, and the latter does not.” Id.

The King case is not all good news for callers, however. It appears to reject the D.C. Circuit Court of Appeals’ suggestion that a call is only subject to the TCPA if the automated capacity of an ATDS is actually used to make the subject call: “The legislative history thus confirms…that the TCPA applies to calls from a device that can perform the functions of an autodialer, regardless of whether it has actually done so in a particular case.” King at *19. And, in King’s view, ATDS calls include calls made by a device “whose autodialing features can be activated, as the D.C. Circuit suggested, by the equivalent of ‘the simple flipping of a switch.’” King at *22.

And then there is the big punt. While the Third Circuit in Dominguez II played coy for a while but eventually opened up on its feelings regarding the required ATDS functionalities, the Second Circuit never quite got comfortable discussing the issue. Noting that the district court had relied on the FCC’s Omnibus ruling in determining that a device’s “potential” capacity were at issue–and had not made any findings regarding the current functionalities of Time Warner’s device–the Second Circuit refused to address the issue of what “functionalities” are required in the first instance. Frustratingly, therefore, the Court expressly refuses to decide whether or not random and sequential number generation is a required functionality of an ATDS and “leave[s] it to the district court to address the [issue] in the first instance.” King at *24. Booooo.

So the tally for the week: four ATDS cases decided, one requiring random or sequential number generation (Dominguez II), one holding that the FCC’s predictive dialer rulings are defunct but refusing to decide whether a dialer is or is not an ATDS (Sessions), one holding that the FCC’s predictive dialer rulings are still viable (case that shall not be named), and now King holding that capacity means “present” capacity, but the capacity to do what?  Welcome to TCPAland. We hope you stay a while.

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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.

Last week the Consumer Relations Consortium (CRC) urged the Bureau of Consumer Financial Protection (BCFP) to issue letters and opinions as guidance that could be relied on by companies trying to comply with gray areas in the law. 

“[Guidance protects] consumers’ rights, ensures lawful business operations, and addresses ambiguities leading to frivolous litigation, thereby reducing burdens on our courts.”

The group providede the following examples of guidance issued by other federal agencies:

• Federal Trade Commission (FTC) letter advising that a debt collector does not violate §805(c) of the Fair Debt Collection Practices Act (“FDCPA”) by communicating with the consumer in compliance with the Fair and Accurate Credit Transactions Act (“FACTA”) after the consumer requested the debt collector to cease communication.
• FTC letter concluding that notice from a debt collector that it will no longer seek to collect a debt because of the inability to verify is not a prohibited communication construed as an attempt to collect the debt under the FDCPA.
• FTC letter concluding that the FDCPA applies to collection agency efforts to collect debt which is in default but not charged off, and that collection agency employees must collect in the agency’s name and not represent themselves as employees of the original creditor.
• FTC letter addressing (1) specific questions about an account creditor’s or collection agency’s permissible purpose to access a consumer’s credit file under the Fair Credit Reporting Act (“FCRA”), as well as advising that (2) under the FCRA, an entity may not obtain consumer credit information from a credit reporting agency on behalf of another entity without disclosing the ultimate end-user of the credit information.
• FTC letter addressing the applicability of the FCRA to the credit reporting of information by educational institutions in connection with defaulted student loans.
• Internal Revenue Service (IRS) letter addressing questions from an association whose debt purchasing members sought answers to nine categories of questions relating to reporting requirements under §6050P of the Internal Revenue Code for debts that are settled for an amount less than the full amount owed.
• FTC’s Statement of Policy Regarding Communications in Connection with the Collection of Decedents’ Debts advising that a debt collector does not violate §805 of the FDCPA when communicating with individuals who have the authority to pay the outstanding bills of the decedents’ estates using estate assets.

The CRC also noted that the Bureau’s Guidance Bulletins are helpful, but still don’t prevent an abundance of litigation filed to resolve gray areas. The group cites the Avila case in the Second Circuit, which adopted a “safe harbor” disclosure regarding the accrual of interest. While many assumed this would end related litigation, it in fact spawned the opposite – a drastic increase in litigation exploiting a new gray area – Does a collector now have to address the fact that interest is NOT accruing?

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insideARM Perspective 

The CRC raised an additional point worth highlighting: During the (already) several years’ long process of debt collection rulemaking, the market has changed, even as the Bureau worked to approve its 2017 draft of a Notice of Proposed Rulemaking, and stakeholders anticipated its release.

Indeed, technology has evolved so greatly during the last few years that some of the positions addressed in the Advanced Notice of Proposed Rulemaking (ANPR) have become moot, or at least outdated to the point where they ought to be reconsidered from scratch. Contact caps is one of those topics. The concept of harassment has now converged with the rapidly advancing issue of privacy, and calls made to mobile phones – formerly the domain of the Federal Communications Commission. Because of the proliferation of illegal robocalls in recent years, many now question the viability of the phone channel altogether. A war is underway among consumers, illegal actors, legitimate businesses, regulators, carriers, and call analytics developers. Sides are shifting. Technology is evolving, both for the better (i.e. choice, convenience) and the worse (i.e. bad actors can spoof the identity of good actors). Consumers want to be contacted through the channel of their choice. They want privacy and control, and they want to be able to trust those on the other end of the device. 

One more thought:

Personally, I would also suggest taking this opportunity to revisit the idea of addressing third party collection rules before, or in the absence of, rules for their clients (creditors). As I like to say, “(Stuff) rolls downhill. Why start at the bottom of the hill?” This is not to suggest that a whole host of rules ought to be imposed on creditors; just that any rules imposed on collectors ought to be coordinated with corresponding requirements for their clients. Without a focus on the whole chain, it’s far less likely that the new rules can practically be implemented.

insideARM has learned that the five firms that had been notified that the accounts they’ve held under their 2015 Award Term Extensions would be recalled by July 3 received notice that the recall had been suspended.

Backing up a bit: In May four firms notified the Court of Federal Claims of their intention to protest ED’s request to dismiss the case of FMS v. USA as moot. On May 25, 2018, Judge Thomas C. Wheeler granted the motion for dismissal and lifted the February 26, 2018 preliminary injunction that prevented ED from recalling in-repayment accounts.

Since that dismissal, ED did in fact send notice to the firms operating under 2015 Award Term Extentions (ATEs) notifying them that the government would be recalling their accounts on July 3. Those firms are FMS Investment Corp. (FMS), Account Control Technology, Inc. (ACT), GC Services Ltd. Partnership (GC), Continental Service Group, Inc. (ConServe), and Windham Professionals (Windham).

The companies subsequently requested a Temporary Restraining Order to prevent ED from recalling the accounts. Last Tuesday, June 26, the judge denied that motion for TRO.

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

Defaulted Student Loan Servicing. 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.

Meanwhile, on Friday June 29, as an index to the Administrative Record in the case of FMS v. The United States (ED) and Alltran (now that they have intervened), the government filed the Report on Initial Observations from the Fiscal-Federal Student Aid Pilot for Servicing Defaulted Student Loan Debt. Originally filed in July 2016, this report details the initial findings from a two-year pilot program launched in February 2015 to compare the performance of efforts by the Department of Treasury and the Department of Education to collect defaulted student loan debt.

It’s a 30-page report including exhibits. The gist of it is that the Bureau of the Fiscal Service (Fiscal) at Treasury, which – pursuant to the Debt Collection Improvement Act of 1996 (DCIA) – collects and resolves delinquent, federal non-tax debts on behalf of most federal agencies (ED received an exemption from this Act), wasn’t as effective at collections as ED until it became more aggressive. Fiscal surmised that the significantly lower recovery rates they achieved were due to things like reduced call frequency, and a slower approach to the collection cycle in order to encourage voluntary borrower response, including the postponement of wage garnishment. 

And then we heard the news that the accounts are suddenly not being recalled. At least for now. Apparently there was little information provided.

insideARM Perspective

Although nobody knows exactly what ED’s proposed pre-default “enhanced servicing” will look like, it sounds to me that it may mirror some of the tactics tried by Fiscal to enhance the borrower servicing experience and encourage more voluntary action — which unfortunately didn’t work so well. The recovery rate (.38%) was just a fraction of what was achieved by the control group of ED contractors (3.4%).

One might look at this and say the ED methods are too aggressive.

One might also look at this from the perspective of the taxpayer. Recovery rates of .38%-3.4%? Yikes. We certainly want to avoid borrower abuse, but it seems to me that this abuse started many years before, with the granting of loans – and the cost of an education – that are completely out of whack with the salaries available to be earned. WHY IS THE DEPARTMENT OF EDUCATION NOT FOCUSING ON THE ROOT CAUSE HERE…THE ABSOLUTELY RIDICULOUS COST OF A COLLEGE EDUCATION?

Meanwhile, this is having a real impact on companies and individuals. Several of the companies that have sued the government over the unrestricted contract for private debt collection services have said that maintaining the capacity to take on the work, and then sustaining themselves throughout the lengthy and on-going litigation, has been a hardship.

The Dallas Business Journal reported recently that ACT will be laying off 72 employees from its San Angelo, Texas call center, and another 100 from its facility in Dallas. The company reported that this is directly related to the Department of Education contract loss.

I suspect we will see additional layoffs and/or mergers among some of these businesses that relied heavily on this contract. With that said, I also suspect that the 11 small business contractors and the two firms with 2017 ATEs may have a need to hire.

WOODLAND HILLS, Calif. – Account Control Technology Holdings, Inc. (ACT Holdings), a national leader in delivering debt recovery and business process outsourcing solutions, has named Mike Meyer as CEO as Tracey Carpentier prepares to step out of the role. Mike has been the CEO of Convergent, Inc., a subsidiary of ACT Holdings, for five-and-a-half years and has more than 21 years of experience in executive management and business development. Meyer will transition into the role and take over leadership by July 31, 2018. Carpentier will remain an active member of ACT Holdings’ Board of Directors.

“I’m very confident Mike will successfully lead ACT Holdings into its next stage of growth,” says Carpentier. “His depth of industry expertise and knowledge about the inner workings of our company will put us in the best position to continue to generate growth and deliver the finest customer service and performance to our clients.”

Before joining ACT Holdings, Inc., Meyer began his career at IBM and Ernst & Young, and then joined Outsourcing Solutions, Inc. (OSI), where he spent nearly ten years in a variety of senior leadership positions in technology, operations, and sales. Overall, Meyer has spent 21 years in executive management, operations and business development in the ARM industry. During his career, Meyer has gained a wealth of knowledge in the ARM industry regarding operational performance, technology, compliance and financial management.

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“It’s a tremendous honor to be named CEO of ACT Holdings, Inc.,” states Meyer. “The opportunity that lies ahead for us is limitless, and the ability to lead our dedicated team into the next chapter is incredibly exciting.”

“We are proud of this appointment and confident Mike shares our commitment to ensuring ACT Holdings remains a leading provider of financial services and business process outsourcing,” said Dale Van Dellen, Chairman, and Co-Founder of ACT Holdings, Inc. “We also want to thank Tracey Carpentier for her two years of leadership and dedicated service as our CEO.”

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 Account Control Technology, Inc. and Convergent, Inc. with locations across the US and offshore. For more information, visit www.accountcontrolholdings.com.

JACKSONVILLE, Fla., — Enhanced Resource Centers (ERC) announced today that Marty Sarim, the company’s long-standing President and Chief Operating Officer, will serve as its next Chief Executive Officer. Current CEO and Co-Founder Kirk Moquin will take a new role as Chairman of the Board, effective immediately.

Marty Sarim, CEO

Marty Sarim brings deep expertise in talent management and operations, and a remarkable ability to develop new and innovative product lines. Combined with his keen market intuition and ability to bring his team together to execute against the resultant opportunities, Sarim will continue to expand the company’s growing global footprint and lead ERC into its future.

“Marty and I have spent the last two years working closely together to ensure a successful transition,” says Kirk Moquin, “and I am very confident that under Marty’s leadership and with the strength of our Senior Leadership team, we will take ERC to the next level yet again.” Moquin will remain involved and continue to drive growth for the company globally.

Kirk Moquin, Founder and Chairman of the Board

“I am excited to start the new chapter of ERC’s already successful story,” says Marty Sarim. “After several years as President, I am grateful to be surrounded by some of the most talented executives and senior leaders in the business. Our team is so bought-in and driven, and it shows every day. We have some very exciting times ahead of us and I am honored to lead our company as we continue to innovate and bring to market the latest technologies, expand our geographic footprint globally, and continue to be a top performer for our clients.”

Sarim’s promotion is one of several shifts for ERC in the immediate future. The company has recently expanded its footprint to Durban, South Africa, and has its next global location targeted. As a technology-first company, ERC will continue to invest heavily in A.I. and other innovative technologies to bring the best solutions and more robust offerings to its partners.

Sarim joined ERC in 2010 as President and Chief Operating Officer, after holding the CEO position at a competitor. While serving as President and COO, Marty’s strong operational skills and deep business insights enabled ERC to not only navigate through an extremely challenging time in the industry, but to do so while still growing and improving. His more than 20 years in the call center space have established him as a respected industry expert.

About ERC

ERC is a global BPO delivering end-to-end customer engagement driven by Relationships, Resources and Results. We provide the best customer experience and results possible on behalf of our clients by connecting them to superior talent and technology in domestic, near-shore and far-shore locations. ERC’s extensive client list includes more than 20 Fortune 500 clients with customers in all stages of their life-cycle. ERC is committed to matching their best-in-class talent for each client engagement, and to providing an unparalleled customer experience with the quality control, business intelligence and overall performance every client deserves.

For more information, contact Rachel Jackson, SVP of Marketing at rjackson@ercbpo.com or 904-874-1141.

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We are incredibly excited to announce the newest insideARM initiative. It’s close to our hearts, and way past due — Women in Consumer Finance — a conference that will bring women of all levels and from a wide range of organizations together to have an amazing shared experience. We’ve each shared our personal thoughts below about why this event and why now.

Amy Perkins, Chief of Content & Industry Intelligence, insideARM, and Conference Chair

Every woman’s professional journey is unique, but if you’ve had honest conversations with your colleagues, you know that we are more alike than different. We really do have common views and experiences when it comes to financial services work and workplace culture.

What’s missing from our industry is an event organized around this point-of-view. I know that I want to meet with other women who share my experiences — women who have so much great expertise to share, who want to get to know one another better, advance their careers and, as they do, improve workplace culture for everyone. And I’ll bet that you do, too.

That’s why we decided to create the Women in Consumer Finance conference. Our goal is to give women from across our industry a dedicated event just for professional women, an event that combines our individual experience into collective strength. The event we have planned will help women build stronger networks, sharpen leadership skills and provide all of us with the tools we all need to improve our industry from within.

Are you nodding your head right now? Well, then you’re the kind of person we need at the Women in Consumer Finance conference. You owe it to yourself to come. You also owe it to your peers, your mentors and mentees and all the women you’ve come across in your professional life. Register today.

Stephanie Eidelman, CEO of insideARM & The iA Institute

It feels like everything I’ve done before has led me to this point. This will not be a conference about compliance or best practices, but about women; about the common professional challenges we face, about how to tell our own career story, and about building our network.

I’ve had several pretty distinct careers across a wide variety of industries. I have often found myself to be the only woman in a room, or one of just a few. As I think back on my career, I realize that nobody has ever really taken me under their wing, or been a champion for me. I regret that. Maybe it was my issue; maybe it was the environments I’ve been in. Nonetheless, I am where I am, and I – like you – have a story to share.

This event is not about calling men out, but rather calling women up.

I hope you’ll join me and Amy in Baltimore this December and get a last boost of professional energy just before the New Year!

—

Click here to learn more about the conference, to register, and to get involved.

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On Tuesday a block of 14 Democratic senators led by Massachusetts Senators Markey and Warren, but including Bernie Sanders and many others– sent a letter to FCC Chairman Ajit Pai asking the FCC to maintain most of its robocall protections under the TCPA following ACA Int’l. The letter can be found here.

The letter focuses on three key issues. First it asks the Commission to broadly interpret the phrase ATDS to “comprehensively” cover autodialers, while carving out every day devices like smartphones from the statute’s coverage. This, of course, is designed to address the growing push for limiting the definition of ATDS to the statutory requirements of random or sequential number generation.

Next, it urges the Commission to interpret “called party” to mean the “actual party that is called”–whatever that means–and not the intended recipient. This comes in response to the FCC’s Public Notice that seems to favor the “expected recipient” definition of “called party.”

Finally, the letter asks the FCC to clarify that consumers are free to revoke their consent–even if they enter into contractual provisions that make their consent irrevocable. This last point departs markedly from the state of existing law, as even the FCC seems to agree that parties can contractually agree to revocation paradigms that suit their needs. The case law also confirms that contractual revocation provisions are enforceable, and at least one Circuit Court of Appeals has held directly that consent provisions lacking a revocation provision are simply not revocable. See Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d 51, 53 (2d Cir. 2017).

 

VICTORIA, B.C. — Comtech, a worldwide leader in collection software, releases Collect! Lite for smaller or startup companies. Designed to provide the basic functions of the larger editions of Collect! at an attractive entry-level price, the cloud-based Collect! Lite package, at $49 per month, can accommodate up to 4 users and manage up to 1,000 accounts. Collect! Lite Plus is a more robust version that can accommodate up to 6 users, manage up to 2,500 accounts and has an optional credit bureau reporting module.

Collect!’s established Entrepreneur, Professional and Corporate editions are used daily by hundreds of businesses and thousands of users globally to manage first and third party collections. Using this experience, Collect! identified the need for a well-priced basic starter option for use prior to scaling up to the feature-rich, flexible and customizable standard editions of Collect! A new user can now choose Collect! Lite or immediately take advantage of Collect!’s full feature set with the Entrepreneur edition.

Collect! Lite, a cloud-based entry-level solution, includes orientation, tools for workflow management, online HELP documentation, help desk support plus optional batch importing, credit bureau reporting and logo inclusion. Collect! Lite users can move seamlessly to more robust versions of Collect! without the need for a data migration.

Collect! Lite $49 for up to 6 users and 1,000 accounts
Option: Lite Plus $99 for up to 6 users and up to 2,500 accounts

Collect! standard editions, in addition to much richer feature sets than Lite, offer a wide range of modules (including a dashboard), integration with many other service providers and the flexibility to build a highly customized system to meet workflow requirements. All standard editions come in cloud and premise versions.

Collect! Entrepreneur for up to 10 users and up to 10,000 accounts
Options: modules, integrations, customizations

Collect! Professional for unlimited users and up to 100,000 accounts
Options: modules, integrations, significant customizations

Collect! Corporate with unlimited users and unlimited accounts
Options: all modules included, integrations, extensive customizations

“Collect! Lite fills an important gap in the market”, says Fritz Schulze, founder of Comtech. “Lite provides an affordable entry level collection package with the basic features a start-up needs, including the ability to import bulk accounts and report to the credit bureaus. By the time new businesses get their basic workflows in place, they are excited to move to Entrepreneur and have the full functionality of Collect! at their fingertips. Fortunately, moving to a more powerful edition of Collect! is seamless.”

Information will be available in the Comtech booth at the ACA International Conference in Nashville, July 23-25, the NARCA Conference in Nashville October 3-6, and the CAC Conference in Monterey October 8-9, or at www.collect.org.

This announcement from Comtech is a significant step in the next generation of early user collection platforms. Comtech continually complements and extends the capacity of its current product feature set to provide competitive and cost effective solutions for both first and third party users.

All Collect! users are invited to attend Collect!’s 2018 User Conference at the Hampton Inn & Suites in downtown Nashville July 26-27, 2018 for two intense days of learning.

About Comtech

Comtech is a privately held company based in Victoria, BC, Canada and currently supports 520 installations globally. Founded in 1988, Comtech has provided cost-effective and modular solutions with over twenty years of collection experience and best practice solutions to the collection industry. Comtech offers its Collect! Collection Platform Product for both large and smaller users in both hosted and premise versions.