The following is a profile of just one of the thousands of revenue cycle leaders at healthcare providers across the U.S. I’d like to thank Kim Roberts for generously offering her time to provide her insights. If you are a revenue cycle professional at a healthcare organization and would like to participate in a profile like this, please contact me. I would love to hear from you.

—-

What’s your name, organization & position?  

Kim Roberts, Vice President of Revenue Cycle, Abington-Jefferson Health and Aria-Jefferson Health

How long have you worked there?

12 years

How long have you worked in the revenue cycle field?

42 years

How did you land in the world of revenue cycle?

I initially started out as a coder, doing concurrent coding on the nursing stations while going to school in the mid-70s. My first full-time job was as a Medical Records Supervisor in a community hospital and then I was promoted to Medical Records Director within the year.  In 1984, as DRGs became effective as a method of reimbursement and coding took on a financial aspect, I moved into the world of finance.  I ultimately became responsible for Patient Registration and hospital billing and receivables, along with medical records. Through the years, as the names have changed to Patient Access, Health Information Management and Patient Accounting, I have worked for both non-profit and for-profit organizations, as well as single entities and national corporate organizations.  Over time, I have also taken on responsibility for physician network, home care and hospice billing and receivables.

What does your typical day at work look like?

I’m in many meetings, part of many discussions and part of planning around ways to optimize revenue, further integrate operations and staff, and gain more efficiencies while trying to minimize expense and salary costs. All of this is in light of decreasing reimbursements and changing payer rules, and while also aiming towards best practices and best-in-class KPIs.  The days can often be challenging, but at the same time, very invigorating.

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Can you think of something great you’ve learned about this business you’d really like to pass along?

It’s all about the supporting team and helping and sharing knowledge and experience and giving credit where it is due.  I’ve always operated under the philosophy that if I am on vacation or out of the office, all functions should operate as normal.  Be proactive, not reactive.  I also have a sign right by my office door, as I exit, that says “Unless It’s Fatal, It’s No Big Deal.” I try to keep focused and look at the bigger picture.

If you weren’t in your current career, what else would you most love to do for work?

I love to garden and grow flowers that I then arrange into bouquets that I give to others.  So, I guess I might love to be a florist!

What do you think needs to change most urgently in the revenue cycle field?

There needs to be recognition that the clinical staff are a critical aspect of revenue cycle and it is just as important that the doctors, nurses, service line administrators and ancillary staff all understand their role and impact on the organization’s revenue and financial viability.

At the same time, if I had my wish, it would be that the payers/insurers all follow the same rules, adopt the same electronic transaction processes and values, and allow the clinicians to drive patient care based upon clinical presentation and not hindsight or retro determinations.

Yesterday the Consumer Advisory Committee of the Federal Communications Commission (FCC) met to discuss, among other things, “Unwanted Call Blocking.”

First, a little background

In March of this year the Robocalls Working Group developed a set of recommendations that were made available in a Notice of Proposed Rulemaking (NPRM) and Notice of Inquiry (NOI). The goal of the rulemaking activity was to facilitate voice service providers’ blocking of illegal robocalls.

You can download the complete text of the NPRM and NOI here.

From the NPRM:

We believe that it is in the best interest of achieving the goal of eliminating illegal robocalls to collaborate with industry – government can remove regulatory roadblocks and ensure that industry has the flexibility to use robust tools to address illegal traffic. It is also important for the Commission to protect the reliability of the nation’s communications network and to protect consumers from provider-initiated blocking that harms, rather than helps, consumers. The Commission therefore must balance competing policy considerations – some favoring blocking and others disfavoring blocking – to arrive at an effective solution that maximizes consumer protection and network reliability.

The Commission proposed to allow providers to block calls when the subscriber to a particular number requests that calls originating from that number be blocked. The proposal also contemplates blocking of three additional categories:

1. calls from invalid numbers
2. calls from valid numbers that are not allocated to a voice service provider
3. calls from valid numbers that are allocated but not assigned to a subscriber

The NPRM requested input (comment period closed earlier this year) on specifics of the blocking activities above.

The NOI sought to gather input on development of objective criteria to help differentiate an illegal robocall from a legitimate one. In an accompanying statement, Chairmain Ajit Pai said this:

We seek input on other objective criteria to identify illegal robocalls – criteria that could help us distinguish, for example, between a woman at a domestic violence shelter legitimately using Caller ID spoofing to check on her kids at home and a foreign huckster pretending to call from the Internal Revenue Service. That’s because we know the problem of illegal robocalls is complicated and the solutions are many – and today’s proposals are only the Commission’s first step toward defeating this scourge.

A section of the NOI was dedicated to contemplating protections for legitimate callers. For instance, whether a “white list” ought to be created and how it might work, as well as a mechanism(s) for legitimate callers to get un-blocked.

Now, to the Consumer Advisory Committee and yesterday’s meeting

Similar to the Consumer Advisory Board (CAB) at the CFPB, the FCC has a Consumer Advisory Committee (CAC), which meets periodically to provide input to the Commissioners. In May, the group met and adopted these 11 formal recommendations related to unwanted calls. Five of the recommendations relate to education; two relate to enforcement; and the remaining four relate to easier ways for consumers to file complaints.

You can see the agenda for the September 18, 2017 meeting here.

The session included brief updates about the implementation of the “May Robocall Recommendations,” and the July 2017 Call Authentication Trust Anchor NOI (a relatively technical initiative to figure out how to “authenticate” callers automatically, before routing to their destination). None of the panelists that provided updates, nor any of the CAC members, represented industries affected by the blocking activities.

D’wana Terry, Acting Deputy Bureau Chief of the Consumer and Governmental Affairs Bureau (CGB) at the FCC gave the update on the Robocall Recommendations. He began by saying this is a problem that will not be solved overnight. He mentioned:

• One strategy is to figure out how to stop caller I.D. spoofing.
• The Industry Strikeforce created in 2016 has made a lot of good recommendations and they are being implemented.
• It would be great if industry engaged more deeply in an effort to come up with a call authentication framework.
• They are also looking at addressing the problems associated with reassigned numbers.
• Tough enforcement is very important when it comes to unlawful robocalls.

The following recommendations were made by the committee yesterday:

• For those service providers that have implemented any of the recommenations in the NPRM, they should inform consumers of those implementations.
• The FCC should encourage stakeholders from consumer and industry sectors to collaborate to address unintended consequences.
• The FCC should encourage voice providers to offer consumers other, optional, categories that can be blocked.
• The FCC should study the effectiveness of these methods after two years in place.

insideARM Perspective

It’s interesting to me that while this NPRM/NOI seems to contemplate some of the right questions and the wheels of the rulemaking process are turning, blocking by voice carriers has already begun — absent any of the contemplated protections for legitimate callers. 

As we wrote previously, this avalanche is already gathering. A coalition is forming to address it, but momentum does not seem to be in their favor.

SAN FRANCISCO, Calif. – LiveVox Inc., a leading provider of cloud channel of choice communications solutions, announced that LiveVox Director of Product Management, Boris Grinshpun, will join John Bedard of Bedard Law Group, and Chris Shuler, COO of American First Finance, on a panel discussing how cloud is providing a simplified, compliance-focused approach to managing multichannel consent by integrating consent capture into existing workflows at TRMA Fall 2017.                                   

Despite the opportunity to increase contact rates that multichannel presents, businesses continue to struggle to evolve their consumer contact strategies to optimize non-voice channels. This is especially true for consumer recovery efforts where regulatory oversight is particularly high. One of the greatest challenges preventing effective email engagement and other multichannel efforts is concern surrounding consumer consent. 

Hear insights from technology, legal and operational industry leaders as they discuss how to collect, manage, and leverage real-time consent to drive multichannel engagement and ROI. 

On the event, Boris Grinshpun, Director of Product Management, LiveVox states, “As consumer contact preferences continue to show a growing demand for non-voice channels, there is no question that multichannel engagement is a strategic competitive advantage for businesses competing in today’s digital environment. However, managing multichannel consent remains a significant hurdle for contact centers looking to expand beyond voice without interrupting their existing workflows. I look forward to joining industry legal and operations experts to share how cloud is providing a cost-effective, streamlined path to multichannel consent management at this week’s TRMA Fall Conference.” 

To learn more about LiveVox’s email and other multichannel offerings, click here. 

About the event:  

• EVENT:  Leveraging Consent to Enable Effective Email Engagement for Today’s Digital Consumer
• DATE/TIME: Wednesday, September 20^th, 2017 at 9:55am PT
• LOCATION: 2017 TRMA Fall Conference, Phoenix, AZ
• PANELISTS:
• John Bedard, Attorney, Bedard Law Group
• Chris Shuler, COO, American First Finance
• Boris Grinshpun, Director of Product Management, LiveVox, Inc. 

About LiveVox, Inc.

LiveVox is a leading provider of enterprise cloud contact center solutions, managing more than 9 billion interactions a year across a multichannel environment. With over 15 years of pure cloud expertise, we empower contact center leaders to drive effective engagement strategies on the consumer’s channel of choice. Our leading-edge risk mitigation and security capabilities help clients quickly adapt to a changing business environment. With new features released quarterly, LiveVox remains at the forefront of cloud contact center innovation. Supported by over 450 employees and rapidly growing, we are headquartered in San Francisco with offices in Atlanta, Bangalore, and Colombia. To learn more, visit LiveVox.com or email us at Info@LiveVox.com

CARROLLTON, Texas –- SWC Group is excited to announce Kevin Bennick as the newest member of their executive management team. As the Vice President of Business Development, Mr. Bennick will provide leadership in the areas of client acquisition, product development and client services.

With over twenty years of industry experience in both Operational Management and Business Development, Mr. Bennick has built a solid reputation for providing exceptional service by understanding and exceeding clients’ expectations. “We are thrilled about Kevin’s decision to join the SWC Group team. His commitment to excellence and integrity is a perfect match for our culture, and will certainly serve to reinforce the quality service that our clients have come to expect,” says Jeff Hurt, CEO. At SWC Group, our goal is to provide our clients with professional accounts receivable and consumer service solutions based on Value, Integrity, and Performance.

About SWC Group

SWC Group is one of the nation’s leading providers of accounts receivable management and consumer service solutions.  They bring over 40 years of proven experience in the government, tolling, utility, telecommunications, cable, property management, and education industries. SWC Group annually manages billions of dollars in receivable accounts, proudly serving organizations of all sizes—from Fortune 500 private firms to small public agencies. 

NEW YORK, N.Y. — After a year of engineering and development using state-of-the-art artificial intelligence engines and proprietary data mining algorithms, Pairity is nearing the launch of its first product, PairityDiscover™. PairityDiscover™ is a tool that allows a user of any skill level to gain insights into a set of accounts whether they be new or old. 

PairityDiscover™ is built upon a platform that leverages some of the world’s most secure cloud computing infrastructure. According to company founder and CEO Gregory Allen, “We built this system so that it is not only as secure as possible, but it is always available.” 

Pairity developed the system to put advanced analytics into as many agencies as possible. As explained by Bradley J. Bartram, Pairity’s COO, “The world is full of advanced tools for researchers and academics. We created our software to eliminate the need for having a Ph.D. on payroll. It’s simple, it’s obvious, and because of the AI, it provides great insights for anyone of any skill-level.” 

As the company nears an early-October limited market launch of this software, they are soliciting agencies to visit their website and signup for the Beta program. This program runs for a limited time and encourages selected users to provide feedback and insights for ongoing development purposes. All while using the AI powered PairityDiscover™ within their organization for no direct cost.

About Pairity 

Pairity is a software company that services the debt collections and accounts receivable industry with advanced solutions for critical challenges. Pairity maintains offices in New York City, Buffalo, and Boston. 

For additional information please visit https://pairity.ai or email us at info@pairity.ai

Last Thursday the United States Department of Education (ED) filed its latest status report in the United States Court of Claims. This report was promised in a filing ED made with the court on August 24^th. insideARM wrote about that development on August 29, 2017: 

“Finally, the language in the report is interesting. ED does not say that selections will be made on September 14, 2017. ED wrote: “Defendant respectfully requests that it be allowed to file a status report on September 14, 2017 informing the Court of the status of the corrective action.” It may be that September 14^th will only bring another status report requesting yet additional time to complete the evaluations. “ 

insideARM guessed correctly in that August 29, 2017 article. ED did not announce RFP selections on Thursday. Instead ED provided the following: 

Status of Corrective Action 

In a notice filed on August 24, 2017, we informed the Court that ED’s evaluation teams have completed their review of all proposals, and that evaluation reports were being prepared and should be finalized within the next few weeks. ECF No. 184 (Defendant’s Notice of the Status of Corrective Action dated August 24, 2017). Evaluation reports are now being finalized, with an expected completion date of September 18, 2017. Once the reports are finalized, ED’s Source Selection Authority will perform an integrated assessment to identify the proposal(s) deemed to be most advantageous to the Government, followed by a responsibility determination of each apparently successful offeror. Once a new source selection determination has been made, ED will announce any new award or awards, and/or the termination of previously-awarded contracts, as appropriate. 

As stated in our August 4, 2017 and August 24, 2017 status reports, this corrective action is a top priority of Federal Student Aid, and ED is working diligently to complete the corrective action. Defendant respectfully requests that it be allowed to file a status report on October 5, 2017, informing the Court of the status of the corrective action. (Emphasis added by insideARM) 

The above two paragraphs should have been the end of ED’s status report. But ED also needed to respond to what can only be described as a “bizarre” August 29, 2017 Order from Chief Judge Susan G. Braden.  

In that Order, Judge Braden granted ED’s request to file another status report on September 14^th and directed ED “to file their September 14th status report in their appeal of Braden’s May 31, 2017 preliminary injunction, currently pending in the United States Court of Appeals for the Federal Circuit, No. 17-2155, together with: (1) corrections regarding the transcript of a hearing convened by the court on May 2, 2017; and (2) an e-mail sent by the court’s law clerk on April 21, 2017, that was attached to the August 29, 2017 Order.”

The August 29^th order continued with two additional paragraphs that were almost nonsensical. But, apparently Judge Braden wanted to make certain the record was complete for the Court of Appeals. Judge Braden wrote: 

“The Government should supplement their Appendix by filing all pages of the transcript of the afternoon hearing on May 2, 2017 to provide complete context. These pages are required to correct the narrative on pages 20–21 of the Government’s August 15, 2017 brief on appeal, wherein the counsel for the Department of Justice contends that the court excluded Plaintiffs and Plaintiff-Intervenors from participating in a conference convened by the court in its chambers. As the transcript demonstrates, on pages 30–31, it was the court’s perception that all parties that wished to participate in the conference attended. In addition, the court ordered counsel for the small business-intervenors removed by a Court Security Officer (“CSO”), because she shouted at the court and interrupted the proceedings. 

With respect to the e-mail, at page 15 of the Government’s August 15, 2017 brief on appeal, counsel for the Department of Justice stated “the trial court acknowledged having contacted the Secretary of Education’s office via e-mail to attempt to force the United States into mediation.” But, as the April 21, 2017 e-mail from the court’s law clerk evidences, the court had no direct communication with the Secretary of Education nor did the court “attempt to force the United States into mediation.” Court Ex. A. Instead, the court explained that it issued an Order on April 19, 2017, so that the parties could negotiate a global solution. In addition, counsel for all parties were copied on the e-mail.” 

As a result of the August 29^th order, ED needed to provide a further response in the September 14^th status report. Per that status report ED states: 

“As explained below, we will comply with the Court’s order by seeking leave to file this status report and other materials described in the August 29 Order with the Federal Circuit.” 

ED then tells Judge Braden:

“As an initial matter, no appendix has yet been filed in Continental Service Group, Inc. et al. v. United States et al., Nos. 2017-2155, -2156, -2157, -2158, -2159, -2160, -2210, -2212, -2214, -2215, -2216, -2221, and -2342 (Fed. Cir.). A joint appendix will be filed after the completion of the briefing by all parties. 

Further, because the Government specifically cited the pages in the transcript (pages 30-31, designated as Appx101481-101482) to which the Court refers in its August 29, 2017 Order, pursuant to Federal Circuit Rules, these pages will be included in the joint appendix.

In addition to these materials that are sure to be included in the joint appendix to be filed with the Federal Circuit, in accordance with the Court’s order, we are seeking leave from the Federal Circuit to file the afternoon session of the May 2 hearing transcript in its entirety as an attachment to the Government’s status report. Even if the Federal Circuit denies our motion for leave, the specific transcript pages cited in the Court’s order will be part of the joint appendix when it is filed under normal operation of the Federal Circuit’s rules.

In addition, defendant will also seek leave from the Federal Circuit to file the redacted and highlighted version of the Court’s email dated April 21, 2017 to James Manning, Office of the Secretary of Education, and the law firm of John Ashcroft, expressing the Court’s view of the need for a skilled mediator in this case. This e-mail was not previously designated for inclusion in the joint appendix because it was not filed in Court, but we will include this document in our motion for leave to file this status report with the Federal Circuit. 

insideARM Perspective 

insideARM would love to tell its readers the meanings of Judge Braden’s August 29^th order and ED’s September 14^th response to that order. Unfortunately, this writer is simply not smart enough to decipher the two items. 

It appears Judge Braden is concerned that the Court of Appeals for the Federal Circuit be given all of the background documents and all transcripts of hearings held in the Court of Federal Claims. It appears that ED has the same concern. Yet, both seem compelled to point it out. 

The case has had so many plots and sub-plots that it is hard to predict where it will go next. For example, insideARM did not previously write about one of those sub-plots. Over the past 10 days, ED and Progressive Financial Services, Inc. (Progressive) had a dispute over ED initiating “a limited recall of student loan accounts to provide immediate relief to student borrowers affected by the devastation of Hurricane Harvey.” 

On September 7, 2017 ED provided notice of a program to recall accounts that met that criteria. On September 8th Progressive filed a motion with the court for emergency relief to stop the recall. On that same day, ED filed a response to that motion. On September 12^th Judge Braden issued an order denying the request for emergency relief. 

All we can do is continue to monitor the litigation and report when and where appropriate.

Editor’s Note: See here for a link to an insideARM page that provides a history of our ED-related articles. The page is automatically updated as new stories are written.

Today insideARM is running a Press Release from DCM Services (DCMS). It is an announcement that I have been named the new CEO of DCMS, effective October 23, 2017. I feel like the announcement needs a little companion story. 

I started doing some consulting work for insideARM in August of 2015. In January of 2016 I joined the company full time as President, working for and with Stephanie Eidelman. I have absolutely loved my position and my time at insideARM. I loved working from home (that 30 step commute was outstanding). I was sure I was going to stay until I retired. But, every now and then, life throws you a curveball. 

I grew up in Minnesota. Though I left Minnesota in 1996, I am a Minnesotan. I have diligently read the Minneapolis and St. Paul newspapers online every day since I left. I follow the Minnesota sports teams. Though I hate cold weather, Minnesota is still my home. 

Several weeks ago, I was approached about the opportunity at DCMS. Having been in the industry for a number of years, I often hear from executive recruiters about potential opportunities. I have politely said “no thanks” to every opportunity since I joined insideARM. I was firm that I was never going back into the agency world again. 

But, as I thought about the opportunity, I was reminded of two totally unrelated news events from the past. First, Sean Connery once vowed to “never again” play James Bond (Agent 007) after the 1971 film Diamonds are Forever. But, we know that he did return to the role in Never Say Never Again. So, a change of heart can happen to anyone. 

Second, in 1985, when I was still living in Minnesota, Lou Holtz was the Head Football Coach at the University of Minnesota. When he resigned to take the head coaching job at Notre Dame he explained that he had a provision in his U of M contract that allowed him to leave for one job – the head coach of Notre Dame. 

I have told people that DCMS is my Notre Dame opportunity. It was the one job that would make me consider leaving insideARM. DCMS is not a traditional collection agency.  It is different. The work efforts are different. The company culture is different. It fits me.  

insideARM has been a great experience for me. Working with Stephanie Eidelman has been terrific. We accomplished a lot together during the past three years. Our Compliance Professionals Forum (CPF) is thriving. We have over 200 active members.

A concept that Stephanie and I both had around the same time, the Consumer Relations Consortium (CRC), is having a positive impact on the ARM industry. There are over 30 Larger Market Participants (LMPs) that meet on a regular basis to address industry issues. 

In 2015, we created a new industry conference that is truly unique. The Fourth Annual First Party Summit (FPS) will be held in Dallas June 4-6, 2018. That event has grown every year. Stephanie and I think that it is now the model for effective ARM industry conferences – collaborative, informative, and collegial.

In 2016, we also quietly launched the One-to-One Appointments Forum. We created an event that allows for intimate, pre-scheduled meetings between creditors and potential vendors. It has been a huge success. Next year we will hold our third Forum. 

Our flagship product, the ARM insider, our newsletter that is delivered four days per week (Mon-Thu) has gotten better and better. I like to think that our insideARM Perspective is a huge differentiator. We not only relay the critical news, but we offer our opinion on what the news means to the industry. 

Finally, I must talk about the insideARM team. Most people have no idea that a very small group of people work very hard every day to deliver all of the above products. To Aaron Steinberg, Mike Bevel, Jeff Hearn, Kerry Murphy, Berta Bustamante, Debra Panitch, and Mark Eidelman, I can only say THANK YOU. I am amazed every day at your level of engagement. 

I am not leaving insideARM immediately. Ben Boyum, the current CEO at DCMS graciously agreed to stay with the company a while longer so that I could help Stephanie with the transition. I will leave insideARM on October 13^th and join DCMS on October 23^rd. I have a few more articles to write, and planning to do for the CRC and the First Party Summit. 

Stephanie Eidelman’s Perspective

As Tim mentioned above, a few years ago we started including the “insideARM Perspective” on many of our articles. In this case I thought it appropriate to make it more personal. 

Working with Tim has been a pleasure. I can truly say that – from day one – we’ve been on the same page on nearly every topic. Our philosophies on management, our approach to business development, and our commitment to doing what’s right, were completely aligned. The last several years have been a true collaboration and I will miss that greatly. Of course, I will be thrilled to return to the type of relationship that we had before – with Tim as an engaged industry leader and participant in our initiatives. 

So, with every door that closes, a window of opportunity opens. As Tim will tell you, his role with insideARM has been a great platform from which to affect the industry as a whole, while stepping back from the day-to-day of managing a collection operation. 

While an exact replacement for Tim Bauer may be impossible, I welcome a new chapter with an industry professional who can bring their own unique talents to insideARM. If this sounds good to you, please get in touch.

Yesterday in a Fair Debt Collection Practices Act (FDCPA) case, a federal judge in California denied a plaintiff’s motion for reconsideration of the court’s prior decision and granted a defendant’s motion for sanctions for having to respond to the request for reconsideration. The case is Shepard-Hall v. Gordon and Wong Law Group PC (Case No 2:16-cv-1361, U.S.D.C., Eastern District of California). 

This case highlights the cost to defend frivolous FDCPA cases and the difficulty in obtaining sanctions to fully compensate for the expense.

A copy of the court’s Memorandum and Order can be found here.

Background 

Asset Acceptance, LLC (not a party to the action) retained defendant Gordon & Wong Law Group PC (G&W) to enforce a state court judgment entered against plaintiff Shepard-Hall for the balance on a Dell Financial Services account. On February 23, 2016, G&W filed a writ of execution to garnish plaintiff’s wages, which was served on plaintiff’s employer by the Sacramento County Sheriff’s Office. On April 8, 2016, the parties agreed by phone to settle the debt for a single payment of $3,000. Plaintiff was represented by the Price Law Group, APC, (“PLG”) during these negotiations. 

On April 15, 2016, G&W faxed a letter to PLG reflecting the settlement terms. PLG then called G&W, informing them that plaintiff’s wages had been garnished by $834.09 that morning, and the parties agreed to reduce the $3,000 settlement by the amount garnished. Four days later, G&W sent a new settlement letter to PLG, reflecting the new terms, and also faxed a notice to the Sacramento County Sheriff’s Office to terminate the garnishment effective immediately.

On that same day—that is, four days after the new agreement was reached—plaintiff sent G&W a signed copy of the original settlement agreement and the full $3,000, not deducting the amount garnished as specified in the new agreement.

On April 29, 2016, as a result of an error by the Sheriff’s Office (emphasis added by insideARM), plaintiff’s wages were garnished again, even though the Sheriff’s Office had been notified of the garnishment’s termination. Because the garnishments resulted in overpayment, G&W voided the check it had received from the first garnishment, and instructed the Sheriff’s Office to return the second garnishment to Plaintiff, which it did.

On May 5, 2016, G&W received a letter from PLG demanding $4,000 in order to avoid suit under the FDCPA. Defendant refused to pay the $4,000. Plaintiff, by and through its attorneys, PLG, filed a lawsuit about a month later. The suit alleged that G&W violated the FDCPA by reason of the above activity.

G&W moved for summary judgment.

Editor’s Note: A motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial. 

On June 20, 2017, the court granted G&W’s motion for summary judgment and judgment was entered in favor of G&W. In the same order, the court also granted G&W’s motion for sanctions under Federal Rule of Civil Procedure 11, due to the frivolous nature of plaintiff’s suit. Plaintiff’s counsel (PLG) were ordered to pay G&W’s attorney’s fees associated with defending the frivolous suit in the amount of $29,507.

On June 23, 2017 plaintiff brought a motion for reconsideration of the imposition of sanctions. G&W opposed that motion and sought additional sanctions for having to respond to the motion for reconsideration. 

The Court’s Order 

The Honorable Morrison England, Jr. was clearly not enamored with plaintiff’s attorneys and their arguments, writing:

In sum, Plaintiff’s counsel does not address the bases for sanctions outlined in the Memorandum and Order imposing them, and accordingly has not shown that the imposition of sanctions was clearly erroneous. Accordingly, Plaintiff’s Amended Motion for Reconsideration is DENIED.

 The court then discussed G&W’s request for additional sanctions. He wrote:

“Defendant claims sanctions are warranted because Plaintiff’s motion for reconsideration “simply reiterates the same arguments that the Court already rejected,” and because the motion “contains numerous false statements.”

The Court finds that Plaintiff’s motion for reconsideration is recklessly frivolous, so as to warrant sanctions under the Court’s inherent authority.”

The court goes into detail about plaintiff’s counsel’s “misstatements” in the motion for reconsideration. Judge England wrote: 

“All of these misstatements are at least reckless. Furthermore, Plaintiff’s reliance on these misstatements renders Plaintiff’s motion for reconsideration frivolous, providing the “additional factor” required for the Court to impose sanction under its inherent authority when a party acts recklessly.”

However, the court only imposed additional sanctions of $500!

G&W had requested “$11,555.50 in sanctions as the attorney’s fees incurred by plaintiff’s frivolous motion.” The court felt that $500 in additional sanctions was sufficient to deter plaintiff’s counsel’s conduct. 

insideARM Perspective  

The court’s reluctance to impose meaningful additional sanctions is frustrating.  This case highlights the substantial challenges involved in defending frivolous lawsuits. G&W could have settled this case for the original demand of $4000. But, since they felt they did nothing wrong (and the judge ultimately agreed with them) they chose to defend the case. Good for them. But, it is always a tough business decision. Sometimes you have to just say “no.”

In this case the legal fees to defend the case were $29,507 to win the initial summary judgment and $11,555.50 to respond to the motion for reconsideration, for a total cost of $41,062.50. They received a sanction award to cover the initial $29,507. Assuming that amount has been paid, they are out over $11,000 in total.

insideARM maintains a FDCPA Caselaw chart. Even a cursory review of that chart will show multiple cases that highlight the challenges to recovering attorney’s fees to defend suspect FDCPA cases.

MINNEAPOLIS, Minn. — DCM Services (DCMS), the industry leader in estate and specialty account recovery solutions, is pleased to announce the appointment of industry veteran Tim Bauer as chief executive officer, effective October 23, 2017. 

Bauer joins DCMS from insideARM, where he has been serving as president. He has also been serving as co-executive director of the Consumer Relations Consortium. Bauer’s prior experience includes key executive roles within the ARM industry, including chief executive officer of Integrity Solution Services, Inc. as well as executive leadership positions at Outsourcing Solutions, Inc. (OSI), OSI Portfolio Services, and Risk Management Alternatives, Inc. (RMA). Bauer is a graduate of St. Mary’s University of Minnesota and Loyola University of Chicago, School of Law. Before joining the debt collection agency world in 1995, Bauer spent 15 years as a partner in the Minneapolis law firm of Messerli & Kramer, P.A.

Bauer’s appointment follows the previously announced retirement of Ben Boyum who has served as DCMS’ chief executive officer since 2011. Boyum, who will maintain his role on the DCMS Board, stated, “I am absolutely delighted to add Tim’s insight, expertise, and industry experience to our team. Even more importantly, Tim is a great cultural fit for DCMS and our clients. DCMS will benefit greatly from Tim’s industry connections as we continue to grow and provide new solutions that meet the needs of our clients and the industries that we serve.”   

Bauer commented, “While I loved my role at insideARM, the opportunity to join DCMS was too much to pass up. The company has a culture of compliance and consumers are treated with dignity and respect. The minute I walked into the DCMS offices, I made my decision. I am thrilled to be joining an outstanding DCMS management team previously assembled and led by Ben.”

“I want to thank Ben Boyum for his leadership and dedication to the organization. We are thrilled that Ben will retain his involvement through an active board seat” said Bill Willhite, managing partner of WILsquare Capital and DCMS board member. “We executed an extensive, nationwide search for the next leader of DCMS and could not be more pleased with its outcome. Tim Bauer brings tremendous industry expertise and, most importantly, shares our commitment to regulatory compliance, client engagement and fits well with DCMS’ corporate-wide culture.”

About DCM Services

Minneapolis-based DCM Services is the industry leader in estate and specialty account resolution services, maximizing the value of client portfolios across financial services, healthcare, retail, and telecom industries through innovation and performance. Its recovery solutions offer a full range of services from proprietary web-based solutions to full outsourcing, maintaining an unmatched spectrum of innovative solutions that increase recoveries, protect brand value, and enhance survivor relationships – with respect and sensitivity. For more information on all DCM Services’ offerings, visit www.dcmservices.com.

About WILsquare Capital

WILsquare Capital is a St. Louis-based private equity firm focused on acquiring and growing lower middle market businesses in the Midwest and Southern United States, with an emphasis on business services, niche manufacturing, and distribution and technology companies. The firm is currently investing out of WILsquare Capital Partners Fund I, L.P

Yesterday the Consumer Financial Protection Bureau (CFPB) released its Summer Supervisory Highights report for the first half of 2017 which, among other things, highlighted findings related to debt collection.

You can download a copy of the full report here.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to supervise banks and credit unions with more than $10 billion in assets, as well as certain nonbanks. These include mortgage companies, private student lenders, payday lenders and others – like debt collection agencies — defined as “larger participants.” Larger debt collection participants are defined as those with annual receipts of more than $10M.

In this latest report, the bureau notes that at one or more entities, the examiners review included activities conducted in a foreign country.

The following FDCPA violations were noted:

• Unauthorized communications with third parties
• False representations made to authorized credit card users regarding their liability for debts
• False representations regarding credit reports
• Communications with consumers at inconvenient times

Unauthorized communications with third parties

Under section 805(b) of the FDCPA, a debt collector generally may not communicate with a person other than the consumer in connection with the collection of a debt without permission from the consumer. Examiners determined that one or more entities did not confirm that the correct party had been contacted prior to beginning collection activities. As a result, one or more entities communicated with a third party in connection with the collection of a debt by discussing the debt with an authorized user of a credit card who was not financially responsible for the debt (and who was not otherwise a “consumer” under section 805(b)).

In response to these findings, one or more entities enhanced consumer verification processes to include the verification of first and last names, and confirmation of date of birth or the last four digits of Social Security number, before disclosing the debt or the nature of the call to the consumer. Additionally, one or more entities revised their processes to discuss the debt with an authorized user only after explicit authorization from the cardholder. Lastly, the entities trained their collection agents on the enhanced policies and procedures. [emphasis added]

False representations regarding authorized users’ liability for debts

Under section 807(10) of the FDCPA, a debt collector may not use false representations or deceptive means to collect or attempt to collect any debt. Examiners determined that one or more entities violated the FDCPA by attempting to collect a debt directly from the authorized user of a credit card even though the authorized user was not financially responsible for the debt. The practice of soliciting payment from a non-obligated user in a manner that implies that the authorized user is personally responsible for the debt constitutes a deceptive means to collect a debt in violation of the FDCPA. One or more entities have undertaken remedial and corrective actions regarding these violations, which are under review by Supervision.

False representations regarding credit reports

As noted above, a debt collector may not use false representations or deceptive means to collect or attempt to collect any debt under section 807(10) of the FDCPA. Examiners found that one or more entities made false representations to consumers about the effect on their credit score of paying a debt in full rather than settling the debt for less than the full amount.

As the CFPB explained in a 2013 bulletin, representations about the impact of paying a debt on a consumer’s credit score may be deceptive. The bulletin states that “in light of the numerous factors that influence an individual consumer’s credit score, such payments may not improve the credit score of the consumer to whom the representation is being made. Consequently, debt owners or third-party debt collectors may well deceive consumers if they make representations that paying debts in collection will improve a consumer’s credit score.” In response to these findings, one or more entities amended training materials to remove references to how a consumer’s credit score may be affected by either settling the debt in full or paying the debt in full.

In response to these findings, one or more entities amended training materials to remove references to how a consumer’s credit score may be affected by either settling the debt in full or paying the debt in full.

Communications with consumers at inconvenient times

Under section 805(a)(1)of the FDCPA, a debt collector may not communicate with a consumer in connection with the collection of any debt at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. Examiners discovered that consumers were contacted by one or more entities outside of the hours of 8:00 am to 9:00 pm (which, in the absence of knowledge to the contrary, may be assumed to be convenient) or at times consumers had previously informed the entities were inconvenient.

These violations were caused by the failure to accurately update account notes and the use of auto dialers that based call parameters solely on the consumer’s area code, rather than also considering the consumer’s last known address. Supervision directed one or more entities to enhance compliance monitoring for dialer systems to ensure that they input system parameters accurately and to ensure that they properly monitor collectors for inputting and adhering to account notations.

Finally, the report notes in its debt collection overview that “at one or more entities, examiners discovered that debt collectors followed client instructions that led to violations of the FDCPA.” There are no specifics provided as to what these instructions were.

insideARM Perspective

insideARM recommends that all debt collection organizations, whether at a creditor, debt buyer, collection law firm or debt collection agency, review the CFPB supervisory highlights reports in detail, and compare findings to your own training practices, policies and procedures.

With that said, two of these latest findings are worth some discussion.

First, confirming that a collector is speaking with the “right party” prior to disclosing any information is perhaps one of the thorniest challenges in collection today. We have written about this issue on several occasions. The Federal Trade Commission, the CFPB, and consumer advocates regularly caution consumers against providing personal information to collectors. This is understandable in today’s identity-theft prone environment. Yet the law requires that debt collectors request such information in order to confirm that they are speaking with the right person before providing any information… including the fact that they are a debt collector (which, by law, they are also required to disclose).

For the benefit of all parties involved, this conundrum needs to be resolved. In addition to creating an incredibly uncomfortable and awkward interaction from the start, this “authentication dance” gets in the way of the quality communication between consumers and collectors that is required to calmly answer questions and resolve debts.

Second, the bureau advises in their report that “Entities can mitigate the risk of an FDCPA violation if they determine whether client instructions would violate the FDCPA before following them.”

This is another common conundrum for many collection agencies. Clients may require certain activity or procedures in their “work standards” that are provided to agencies and often incorporated into contracts. If and when a client suggested/mandated work standard could be deemed to be a FDCPA violation, a UDAAP, or even a risk of potential litigation, the agency needs to have candid discussion with the client about that particular work standard. Clients need to listen and hear concerns. 

If a client insists that the work standard remain, the agency should either walk away from the opportunity (this is very difficult to do when the client is a very large organization promising significant business) or insist on indemnification from the client in the event of suit or regulatory penalties (this is nearly impossible, as collection agencies typically have little to no leverage in negotiating contract terms with very large credtior oganizations).  

What could be very helpful in this situation is if the CFPB in its upcoming rulemaking would eliminate as many grey areas as possible. This would minizmize the gap between client and service provider interpretations of the law.