Back on June 7, 2018, Representative Frank Pallone, Jr. and Senator Edward J. Markey proposed similar bills to their respective branches of Congress, each entitled the “Stopping Bad Robocalls Act.”  The bills are 19 and 18 pages long, respectively, and can be a bit hard to follow unless you have a complete copy of the TCPA handy and an hour or two to burn.

That being said, instead of breaking down these bills in a summary, we decided to go ahead and mark up the current iteration of TCPA to easily illustrate how these bills would change it.  Note that the marked version of the TCPA linked in the PDF below is based solely on the changes proposed in Rep. Pallone’s bill only.  We took this approach because Rep. Pallone’s bill in the House includes a section entitled “Enforcement,” which includes new subsections, § 227(b)(5) and § 227(b)(6), and Senator Markey’s bill does not include those subsections.  Instead, Senator Markey’s bill re-labels the “Private right of action” section as § 227(b)(5).  Otherwise, the two bills are substantively the same.

TCPA with Rep. Pallone’s Proposed Changes

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Editor’s note: You may have noticed that Eric Troutman and other Womble Bond Dickinson attorneys have authored quite a few articles on insideARM lately. They have. We have just recently established a partnership for the firm to power our TCPA case law chart, and to provide a steady stream of their timely, insightful and entertaining take on this ever-evolving, never-a-dull-moment topic. 

This week the Federal Communications Commission (FCC) published a notice soliciting input for an upcoming staff report on robocalling. The report was requested by the FCC in November 2018, specifying that it should cover progress made by industry, government and consumers in combatting illegal robocalls, as well as the remaining challenges to continuing the efforts. The Commission requested quantitative data including calling trends and consumer complaints, as well as other relevant information.

These are some of the questions asked by the FCC’s Consumer and Governmental Affairs Bureau (Bureau), which has been directed to prepare the report:

• How have providers responded to the new permissive rules from the November 2017 Call Blocking Order?
• What kinds of blocking are providers doing as a result of this and other actions?
• How is the effort progressing to implement SHAKEN/STIR (the standardized system for caller ID authentication), and when will it result in customer benefits?
• How is the consumer complaint data released by the FCC and FTC being used, and what are the benefits of its release?
• What criteria do opt-in filtering tools use in selecting calls for consumers to block or label as illegal or unwanted? Also, how effective and popular are they, and what are service providers doing to let consumers know about them?
• How effective has call traceback been for identifying and enforcing against makers of illegal robocalls, and how might the tactic be improved?

The Bureau is also seeking trend data – using January 2018 as a baseline – that will assist in identifying which voice service providers, which types of calls, which types of scams, etc. are more/less effective. The Notice does suggest it is possible to seek confidential treatment for all or part of a submission, should it include “competitively sensitive information, or information likely to allow unlawful callers to circumvent filtering mechanisms.”

Comments are due July 20, 2018; Replies to the comments are due August 20, 2018. Electronic filers can submit comments here. Other instructions are here on the full notice.

insideARM Perspective

There has certainly been progress on the software solution side of this issue, with more than 500 apps now available, either through mobile phone carriers or app stores. Verizon recently announced screening assist for landlines. Many stakeholders are actively involved in the development of tools, rules and guidelines to stop illegal and unwanted robocalls.

As it relates to debt collection, we are still educating most of these stakeholders about the unique regulatory challenges and unintended consequences of the initiative. In fact – we are now seeing the convergence (or conflict) of FCC direction with the FDCPA rules of third party disclosure. Honestly, I think it’s leaving most people stumped. They mostly get it, but they don’t know what to do about it.

A few weeks ago I posted this 3 minute video on Linkedin describing the challenge. Here’s the gist: The FCC is responding to consumer demand to know who is calling, and why. The FDCPA says that debt collectors can’t reveal who is calling (if their name reveals that they are a collector) and why, until they have verified that they are speaking with the “right” person. So. Yeah.

The Consumer Relations Consortium has organized a roundtable of regulators, advocates, carriers, app developers, and industry to take place in early August that will address this issue specifically in the context of debt collection.

Those interested in more of the history on this can see all of our robocall topic coverage here on insideARM. Here is where it all officially started, in November 2017, with the FCC’s Commission Meeting where the Report and Order referred to above was adopted.

Consumers using scripts to bait debt collectors into FDCPA violations is certainly nothing new; insideARM has been publishing articles about this issue for years.

While the practice of consumers baiting collectors into FDCPA violations is well-established, the specific techniques and scripts used continue to change and evolve. A new trend is sweeping across the country about which all debt collectors should be aware. 

In the latest episode of the Debt Collection Drill podcast, Moss & Barnett attorneys John Rossman and Mike Poncin discuss this latest call baiting strategy and provide specific steps debt collectors can take to avoid an FDCPA violation when faced with a consumer using this script. Attorneys Rossman and Poncin also discuss the “new frontier” of debt collectors using text messages and how to potentially overcome the regulatory and legal hurdles with use of this technology. 

Listen to the episode here:

http://traffic.libsyn.com/thedrill/TDCD_ep70.mp3

ST. CHARLES, Mo. – Client Services, Incorporated (CSI) announced today that Mr. Jamie Campise has joined the company as Vice President of Business Development to further expand their national client base. Jamie Campise comes to CSI with over 30 years of industry experience. He spent the past seventeen years at one of the nation’s largest agencies, where he was instrumental in acquiring numerous business relationships with many of the nation’s largest consumer and commercial credit grantors. 

Jamie joins Client Services as Vice President of Business Development to expand on an already impressive footprint by introducing new and existing services to national creditors across multiple verticals within the marketplace. With Jamie’s experience and ability to create and deliver client-specific solutions, he will play a key-role in acquiring and strengthening client relationships to complement CSI’s continued success. 

Jamie commented, “I am excited to join a national firm that has a proven infrastructure, an award-winning management team, and a company-wide culture that clearly places a focus on compliance and customer experience. I am fortunate and excited for this opportunity to work with a team that prides itself on being the best in the business.”

About Client Services, Inc.

Established in 1987, Client Services, Inc. (CSI) is a Better Business Bureau A+ accredited organization. CSI offers a full suite of Accounts Receivable Management (ARM), Business Processing Outsourcing (BPO) and Healthcare Revenue Cycle Management solutions, which include collections and recovery programs involving 1st Party Pre Charge-Off, 3rd Party Pre Charge-Off and 3rd Party Post Charge-Off.

CSI provides its clients a standard of performance that emphasizes superior compliance/quality control, consistently high collection results and outstanding back-office processes. For over 30 years CSI has worked as a top-tier service provider in financial services, one of the most highly competitive and complex segments of the ARM industry. CSI operates branches in St. Charles, Mo, Lenexa KS and Barreal de Heredia, Costa Rica. For more information on Client Services, Inc., visit us at www.clientservices.com.

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Since the California Fair Debt Buying Practices Act of 2013 (CFBDPA) went into effect, there has been little guidance on how the requirements of the CFBDPA apply to a third party collection agency collecting on behalf of a debt buyer.  One such requirement is the disclosure a debt buyer must provide a consumer in its initial communication.  This disclosure tells the consumer that they can request certain records, with an instruction in the statute for the debt buyer to “insert debt buyer’s active mailing address and email address, if applicable” for such records. 

At issue in Robinson v. ARS National Services Inc., 3:17-cv-52820, was whether including the debt buyer’s address in the California disclosure, as instructed by the CFBDPA, overshadows the consumer’s FDCPA 1692g validation rights by confusing the consumer in regards to where he or she should send a dispute: to the debt collector or to the debt buyer.

In a short two-paragraph order released on June 19, 2018, the Northern District of California answered unequivocally “no.”

Read the decision here. 

Factual and Procedural Background 

Plaintiff Andrea Robinson, a California resident, incurred a debt on a J.C.Penney account, on which she eventually went delinquent. The debt was sold to Crown Asset Management, LLC. (“CAM”).  CAM placed the account with ARS National Services Inc. (“ARS”) for collection.  Since ARS was collecting on this account on behalf of a debt buyer, ARS included both the FDCPA 1692g validation disclosure as well as the CFBDPA disclosure on the initial letter it sent to Plaintiff.  The FDCPA disclosure was on the front of the letter, instructing the consumer to send any disputes “to this office.”  The CFBDPA disclosure was on the back side of the letter and included CAM’s address as the place to send requests for certain records.

Plaintiff filed a putative class action against ARS in N.D. California with only an FDCPA cause of action. The suit alleged that the CFBDPA disclosure with the debt buyer’s address overshadows the consumer’s FDCPA validation rights by confusing the consumer as to where he or she can send disputes: to ARS’s address on the front of the letter or to the CAM address listed on the back. 

The parties filed cross motions for summary judgment. The court granted ARS’s motion for summary judgment and denied Plaintiff’s motion for summary judgment. 

The Decision 

In its motion for summary judgment, ARS argued that the consumer rights provided in the two statues are separate and there is no confusion based on the letter sent by ARS that a dispute needs to be sent to ARS. The court agreed. 

Simply put, the court found that the letter distinguished well between the two statutory rights. The FDCPA 1692g notice was on the front of the page. All around this paragraph were references that “make clear that this paragraph is referring to ARS and that the customer should contact ARS at the mailing address at the top of the page to verify their debt.” The court found that the footer of the letter, which stated that the consumer should see the reverse side for “important information” does not make the consumer’s 1692g rights unclear. 

Very pointedly, the court states that “[e]ven an ‘uninformed or naïve’ recipient of the letter would understand that the notice on the back of the letter relates to a different kind of request, which would be addressed to Crown Asset Management, LLC.” 

Ultimately the court found that the “least sophisticated debtor would not be misled by the collection letter that ARS sent Robinson.” 

Analysis 

Anytime a new statute comes out, there often is uncertainty on how such statute is practically applied until there are a few court decisions on the issue to provide guidance. This decision is one of those guides to debt collectors collecting on behalf of debt buyers in California.

Additionally, this decision shows the benefit of agencies defending suits on issues of first impression that appear to be far-fetched claims so they do not turn into the “next big thing” for plaintiffs’ attorneys. This issue is now closed, and instead of focusing on endless litigation on the matter we can all move forward with more productive issues.

TCPA defendants have enough to deal with without having to worry about secret limitations on their ability to call phone numbers supplied by customers. But, oh well!

In Benedetti v. Charter Communications, No.1:16-CV-2083 RLM-DLP, 2018 WL 2970998 (S.D. Ind. June 13, 2018) a customer supplied his nanny’s phone number to the Defendant in connection with his account. After the account went delinquent the Defendant began calling the phone number in an effort to collect. The nanny sued under the TCPA contending that the calls had been made to her without her express consent.

Charter sought summary judgment in the case arguing that it had permission to call the number supplied by its customer. Importantly, the nanny had admitted in deposition that she had given permission to the customer to provide the phone number to Charter. Thus, Charter argued, under the FCC’s presumed consent rule it had permission to make the informational calls at issue.

The Court disagreed. The nanny had testified that she only gave the customer permission to supply the phone number to Charter for a limited purpose–specifically for setting up the cable service and for troubleshooting if it was on the fritz. Because the record was barren respecting what the customer had actually told Charter in providing the phone number, the Court concluded that a jury might find that the customer told Charter that it could only call the number for those limited purposes. If that was the case, then the scope of consent would not have be broad enough to encompass debt collection calls. So summary judgment was denied.

Although the issue of what the customer did or did not say to Charter is obviously speculative given the poorly-developed record, the Court found that it was Charter’s job to prove the negative–i.e. that the customer didn’t tell it to call the number for a limited purpose. That’s always fun.

The take away here is that a caller receiving a third-party’s phone number from a customer must always be cautious for secret limitations imposed by the third-party. Absent documentation that the customer did not provide additional instruction related to the scope of consent, the third-party may sue the caller on the theory that the customer had exceeded the scope of his or her consent in providing the number to the caller. While a counterclaim would likely exist against the overreaching customer, that is of little comfort.

Of course if the customer never even reveals that the number belongs to a third-party in the first place things get even trickier. All the more reason to see the FCC adopt the “expected recipient” approach in defining the phrase “called party.” Keep your fingers crossed.

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Editor’s note: You may have noticed that Eric Troutman and other Womble Bond Dickinson attorneys have authored quite a few articles on insideARM lately. They have. We have just recently established a partnership for the firm to power our TCPA case law chart, and to provide a steady stream of their timely, insightful and entertaining take on this ever-evolving, never-a-dull-moment topic. Welcome to the WBD team!

TREVOSE, Pa. — NCB Management Services, Inc., a privately held national debt buyer and collection agency, has successfully secured a new senior credit facility of $150 million through a leading alternative asset manager with over $14 billion in assets under management that specializes in providing capital to growing businesses.  

Ralph N. Liberio, President & CEO of NCB Management Services, Inc., commented on the recent transaction, saying: “This transaction marks a significant milestone in NCB’s proud 24-year history. This new facility provides NCB with a strong borrowing capacity along with the necessary financial flexibility to access credit that is needed to properly grow and scale our business over the next several years.  We are extremely pleased with the expansion of our credit facility as it will provide ready access to capital for our portfolio acquisition efforts.”

The refinancing efforts were led by Marcelo Aita, currently Board Advisor at NCB who stated, “The team at NCB demonstrated that a well-run company with the right strategic outlook can attract the capital it needs to support future growth for years to come.” As the former President & CEO of NCB he knew exactly what it would take to complete a transaction like this. Aita added, “Securing the right type of capital is a process that starts with a strong management team, a clear financial vision, and financial partners that truly understand a company’s potential.” NCB was also advised by Chartwell Financial Advisors and represented by Frost Brown Todd, LLC. and Andrew J. Blady of Sessions, Fishman, Nathan & Israel LLC.

NCB has invested more than $150M in portfolio acquisitions and has acquired north of $3.3B in unsecured consumer receivables both direct from creditors as well as other debt buyers.  “This credit facility will provide NCB the ability to more effectively manage our capital in a manner that we believe will continue to enhance shareholder value”, stated James LaSala, Chief Financial Officer for the company.

NCB continues to concentrate their debt buying and servicing attention in the “Unsecured Consumer Credit” verticals, specifically within the credit card, unsecured consumer loan and auto-deficiency asset classes.  The company purchases both non-performing and semi-performing portfolios.  They have more than two-decades of experience buying and servicing these types of debt and want to continue leveraging their new financial and operational capacity.  To learn more about partnering with NCB, reach out to one of the executives at NCB and start an exploratory conversation.

About NCB Management Services, Inc.

NCB Management Services, Inc., established in 1994, is headquartered in the Philadelphia area with satellite offices in Jacksonville, FL and Sioux Falls, SD.  NCB is a recognized Accounts Receivable Management (ARM) industry leader as well as a nationally respected debt buyer. The company is partially owned by its employees through an Employee Stock Ownership Plan (ESOP). The NCB ESOP is a company-funded defined contribution retirement plan established in 2014 for the benefit of NCB employees.

In an unusual weekend announcement, on Saturday a White House spokesperson announced that President Trump has selected Kathy Kraninger, an associate director at the Office of Management and Budget (OMB) under Mick Mulvaney, as his nominee to lead the Bureau of Consumer Financial Protection. Kraninger was on nobody’s reported short list… or at least if she was, it was an extremely well-guarded secret.

According to Kraninger’s Linkedin profile, she graduated in 1997 from Marquette University, and in 2007 from Georgetown University Law Center. She has been at OMB since March 2017. In the ensuing years she served as deputy assistant secretary for policy at the Department of Homeland Security, and also worked at the Transportation Department.

White House spokeswoman Lindsay Walters said in a statement that 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.”

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The announcement is drawing criticism from both sides. 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.” He compared her nomination to the ill-fated confirmation process for Harriet Miers, the Supreme Court nominee chosen by President George W. Bush who was rejected by fellow Republicans as unqualified. Verret is also a colleague of Todd Zywicki, who was reportedly an early contender for the BCFP job, and re-emerged late last week as one of two remaining finalists. 

The banking industry was pleased with the pick. American Bankers Association president and CEO Rob Nichols released this statement,

“We congratulate Kathy Kraninger on her nomination to lead the Consumer Financial Protection Bureau. Her experience at OMB alongside Acting CFPB Director Mick Mulvaney, along with her years of work on Capitol Hill and in the executive branch, would serve her well in this important position. We trust she shares our interest in ensuring consumers have access to the financial products they want and need, while maintaining the protections they deserve.

We also appreciate Acting Director Mulvaney’s willingness to review the Bureau’s policies and priorities to ensure they are meeting the Bureau’s mission, and we hope Ms. Kraninger will build on that foundation. We look forward to learning more about her views on specific regulatory issues during the confirmation process.”

insideARM Perspective

While Verret compares this nomination to the Miers Supreme Court debacle, to me it is reminiscent of something much more recent — former CFPB Director Richard Cordray’s eleventh hour elevation of his top aide Leandra English. English was also a little-known manager who – it seemed to many – was hand-picked to continue the work of her boss, in spite of her lack of name recognition and political gravitas. I recall searching in vain for a photo of English when the announcement was made. Evidently nobody else could find one either, until finally she was photographed by the press in a meeting with lawmakers following Cordray’s announcement. In this case, other than the photo I pulled from Kraninger’s Linkedin profile, I note that the Wall Street Journal had to go back to 2008 to locate one.

Meanwhile, Mulvaney said just last week that he had not been involved in the process of choosing his successor. According to a report last Tuesday, Mulvaney told reporters he was recently told by White House Counsel Don McGahn that the Trump administration will adhere to a June 22 deadline for selecting a permanent CFPB director. He said that Treasury Secretary Steve Mnuchin and top White House economic advisers Larry Kudlow and Kevin Hasset have been leading the search, and “Once they name a person I look forward to working with him or her to get that person up to speed.”

This seems hard to believe, given how closely Mulvaney must work with Kraninger at OMB. It also seems unlikely that Trump wouldn’t have asked Mulvaney for his opinion about her.

One has to wonder whether keeping Mulvaney in office long enough to make permanent change (or at least change that is super-difficult to reverse) is the driver of this selection. 

Ballard Spahr’s Alan Kaplinsky did the research on Section 3345(a)(2) of the Federal Vacancies Reform Act (FVRA) – which Trump used as the source of his authority to appoint Mulvaney as Acting Director – earlier this year. He noted, “[if the first] nomination is rejected, withdrawn, or returned by the Senate, Mr. Mulvaney can continue to serve for another 210 days and assuming the President makes a second nomination within that 210-day period, Mr. Mulvaney can continue to serve until the second nominee is confirmed or for no more than 210 days after the second nomination is rejected, withdrawn, or returned. Given [this], Mr. Mulvaney’s service as Acting Director could potentially continue into 2019.”

In a tweet, the Credit Union National Association (CUNA) said, “We are hopeful that under her leadership, the Bureau will recognize the unique structure of credit unions and the enormous benefit that credit unions provide to 110 million members.”

The Defendant in Bad Reyes is going to have to wait to appeal the court’s ruling on ATDS functionality.

Recall that Estrellita Reyes v. Bca Fin. Svs. (aka “Bad Reyes“) is part III in our post-ACA Int’l ATDS functionality saga.  Following the court’s ruling – which found that the FCC’s 2003 and 2008 predictive dialer rulings remained valid following ACA Int’l – the Defendant asked the court to certify its ruling for immediate interlocutory appeal to the Eleventh Circuit. The court recently denied that motion, finding that the case did not meet the three conditions required for certification: (1) a “controlling question of law”; (2) a “substantial ground for difference of opinion” as to that question of law; and (3) that an appeal must “materially advance the ultimate termination of the litigation.”

But before we get into the court’s analysis, there’s one thing to note. The decision opens with the comment that the motion had been filed because the Defendant was “unhappy” with the court’s ruling. Well, who wouldn’t be? But Defendant’s emotions aside, that pretty much set the tone for the rest of the ruling in which the court shot down each argument made by Defendant in seeking certification.

First, the court ruled that the mere fact that Defendant disagreed with the court’s ruling establishes neither a controlling question of law, nor a substantial ground for difference of opinion.

Second, the court ruled that the fact there are other district courts that have reached different conclusions (i.e. Marshall and Herrick) didn’t matter because those were non-binding, out-of-circuit authorities – and that decisions by courts within the Eleventh Circuit were in alignment.

Third, the court ruled that the appeal would not “materially advance the ultimate termination of the litigation” because, even assuming the Eleventh Circuit reversed, the case would still need to go to trial. The parties would still need to litigate the issue of whether the device used by Defendant was an ATDS (granted, under the statutory text of the TCPA, rather than the FCC rulings), and – here’s the kicker – it wouldn’t matter anyway because Defendant itself had not moved for summary judgment on the issue (hence the appeal would only result in a reversal of the court’s ruling on Plaintiff’s summary judgment motion).

Defendant came out 0 for 3 here but, no doubt, the bar for certifying a ruling for interlocutory appeal is high. But query: should it really be a Circuit Court of Appeal that decides this issue of ATDS functionality? Or should it be left to the FCC? If anything, Worse Reyes might very well be the poster child for primary jurisdiction stays in TCPA cases.

MINNEAPOLIS, Minn. – CenterPoint Legal Solutions, a leader in skip tracing, non-performing judgment programs, litigation and ancillary legal services is moving offices this month to facilitate its current and future expansion. 

CenterPoint has seen an increase in business over the last several years from a combination of increased market share from existing clients as well as new client programs. In order to maintain the quality of service that its clients are familiar with, it was time to move to a larger space in order to increase capacity of scale.

“This is a very exciting time for our CenterPoint family,” said Aaron Rose, President and Managing Member of CenterPoint.   “We are grateful for our client partnerships and look forward to our expansion.”

Over the next several months, CenterPoint will be further concentrating on developing its ancillary products to offer current and prospective clients additional services. This includes: File Evaluations, Balance Reconciliation, Substitution of Counsel Filings, Assignment of Judgment Filings, Judgment Renewals, Domestications and other back office related functions.

“Our new office allows for continued operational success which wouldn’t be possible without our loyal and committed employees”, said Mark Hutchins COO and Co-Owner of CenterPoint. “We truly have one of the best teams in the industry.”

The official office move will take place on Friday June 15, 2018. To celebrate the occasion CenterPoint will be hosting an office christening celebration for its 40 plus employees.

To learn more about CenterPoint Legal Solutions please visit www.centerpointls.com or contact Aaron Rose at 877-258-1598 or email arose@centerpointls.com.