Last week the New York Times reported that a leaked memo drafted by House Financial Services Committee Chairman Jeb Hensarling (R-TX) detailed plans to weaken the CFPB.

According to the report, plans include allowing the president to replace the CFPB director at any time, limit enforcement authority, reduce the ability to make rules, and repeal the consumer complaint system. Also, perhaps most significantly, he proposes to block the CFPB from being able to use unfair or deceptive acts and practices (UDAAP) as a means of enforcement. This is perhaps the most powerful tool the bureau has because it allows the agency to go after just about any business of any size, whether or not it is specifically defined in its charter.

On Janaury 18 another member of the House Financial Services Committee and cosponsor of The CHOICE Act, Rep. Robert Pittenger (R-N.C.), wrote an article that was published in the Charlotte Observer in which he called Dodd-Frank an “albatross… which has impeded access to capital and credit for small businesses and entrepreneurs.” He offered facts including a decline in the number of community banks from 7,093 in 2010 to 5,521 today. This decline, he says, can be directly attributed to new compliance costs.

UPDATE: 1:30PM 2/13/17 insideARM has acquired a copy of the memo. You can see it here. The following are the reccommendations especially relevant to the ARM industry:

CFPB is to be retained and re-structured as a civil law enforcement agency similar to the Federal Trade Commission, with additional restrictions on its authority:

1. Sole diretor, removable by the President at-will
2. Elimination of consumer education functions
3. Rule-making authority limited to enumerated statutes
4. UDAP authority repealed in full
5. Supervision repealed
6. Consumer complaint database repealed
7. Market monitoring authority repealed
8. Enforcement powers limited to cease and desist and CID/Subpoena powers
9. Mandatory advisory boards repealed
10. Research function eliminated
11. Strengthen the existing Dodd-Frank language that the CFPB’s jurisdiction does not include entities regulated by either the SEC or CFTC

insideARM Perspective

It will no doubt remain unclear for some time how all of this may affect the ARM industry, which has also been burdened by a massive increase in compliance costs. If the CFPB doesn’t get eliminated in its entirety, larger collection agencies, which are not supervised by another agency, would likely remain under its purview.

[Note: Based on the update above, after reviewing details of the memo — which, it should be noted, is all it is, a memo — if #5, “supervision repealed” were to happen, this indeed would also affect “larger market participants,” which the bureau identified in 2012 as being those businesses with more than $10 million in revenue from collection activities.]

Dismantling Consumer Response would certainly represent a change for all collection agencies and creditors. However, the ability to file complaints and actually get a response from large companies has been popular among consumers, so it’s possible this would simply be used as a bargaining chip as other trade-offs are made.

A United States District Court judge granted a collection agency’s motion for summary judgment in a Fair Debt Collection Practices Act (FDCPA) case alleging that the defendant violated 15 U.S.C. §§ 1692d and 1692d(5) by repeatedly contacting Plaintiff on her cellular telephone, as well as calling multiple times a day. The case is Reed v. IC System, Inc. (United States District Court, Western District of Pennsylvania, Case No. 3:15-279). 

A copy of the opinion can be found here.

Background

In her complaint, Plaintiff, Laura Reed, alleged “that between December 2014 and March 2015, Defendant, a ‘debt collector’ under the Act, violated [15 U.S.C.] §§ 1692d and 1692d(5). . . by repeatedly contacting Plaintiff on her cellular telephone, more than eighty-four (84) times over a four (4) month period [beginning in December 2014 and lasting through March 2015], as well as calling multiple times a day.”

Plaintiff also alleges that Defendant “failed to send her written notification of her rights, along with information about the debt, within five days of its initial communication with her, as required by 15 U.S.C. § 1692g(a).” 

After Discovery was completed the following facts were deemed to not be in dispute:

• Defendant attempted to reach Plaintiff by calling her and sending her a notice dated December 9, 2014, to the address where she was living at the time.
• Although Plaintiff claims that she never received the notice, there is no evidence that it was ever returned to Defendant as undeliverable.
• Defendant’s account notes reflect that Defendant attempted to call Plaintiff’s cell phone 125 times over a span of 135 days, beginning on December 8, 2014, and ending on April 22, 2015.
• There were 35 days on which Defendant called at least two times, and three days on which Defendant called three times.
• All of the calls went to Plaintiff’s voicemail, and on one occasion, Defendant left a message.
• According to the account notes, the calls ceased after Plaintiff’s attorney wrote a letter to Defendant, requesting that it stop all communication with Plaintiff.
• Once she started receiving the calls, she downloaded a cell phone app called “Blocked Calls Get Cash.”
• From that point on, when Plaintiff received a call on her cell phone, the app “would ask whether it was a personal call or whether it was a debt collector or a telemarketer.”
• Plaintiff explained that her phone would “ring for, like, a second or two” before blocking the call, and then the app “would give [her] a notification of a blocked call.”
• Plaintiff testified that she had the option of answering the call before it was blocked, “but most of the time, when [she] got the phone calls, [she was] at work, and [she could not] answer [the phone].”
• Plaintiff never requested the name of the creditor in writing, nor did she request that Defendant stop making the calls.

The court noted two additional items in footnotes:

• Plaintiff has filed six similar law suits alleging FDCPA violations against other debt collectors during the same time period.
• According to its Web site, “[t]he Block Calls Get Cash app was developed to help [users] effortlessly exercise [their] rights under the Telephone Consumer Protection Act (TCPA). If [a consumer] receives a robocall, BCGC prompts [the consumer] to answer a few simple questions” and the call is logged. Then that “information is reviewed by Lemberg Law, the most active consumer law firm in the country[,]” for violations of the TCPA.

IC System 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.

Defendant made two arguments in support of its motion. First, that Plaintiff lacks Article III standing. Second, Defendant contended that, assuming Plaintiff had standing, she had nonetheless failed to adduce sufficient evidence to support either of her claims under the FDCPA.

The Court first addressed the Article III standing issue. The court discussed the Supreme Court decision in Spokeo Inc. v. Robbins, (136 S. Ct. 1540 (2016) and the need for plaintiff’s alleged injury to be “concrete and particularized” rather than a “bare procedural violation.”

The court determined that Plaintiff had alleged injury in precisely the form the FDCPA was intended to guard against and thus had Article II standing to bring the action.

The court then turned to the merits of Plaintiff’s claim. As to Count 1 the opinion notes:

“15 U.S.C. §§ 1692d prohibits debt collectors from engaging ‘in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.’ In addition to that general prohibition, § 1692d(5) specifically prohibits a debt collector from ‘causing a telephone to ring . . . repeatedly or continuously wit.’

Generally, the question of whether a debt collector acted with the necessary intent is left for the jury. A court, however, may grant summary judgment if a Plaintiff fails to ‘provide evidence such that a reasonable juror could conclude that such calls were caused by Defendants with an intent to harass.’ Although ‘[t]here is no consensus as to the amount and pattern of calls necessary’ to survive summary judgment, it is clear that ‘the number of calls alone cannot violate the FDCPA; a plaintiff must also show some other egregious or outrageous conduct in order for a high number of calls to have the ‘natural consequence’ of harassing a debtor.’

In this case, the Court finds that no reasonable jury could infer that Defendant acted with the intent to ‘annoy, abuse, or harass’ Plaintiff. To be sure, the number of calls does seem relatively high: Defendant called 125 times over the span of 135 days – more than once per day on 35 days, and three times per day on three days. Nevertheless, Plaintiff has not adduced evidence of egregious conduct on the part of Defendant.

First, the calls were never back-to-back; there was always at least two hours between them, and often times, more than that. Second, the calls took place between the hours of approximately 8 a.m. and 7:45 p.m., with the vast majority taking place within ordinary business hours. Third, Defendant only left one message during the entire four month span, and did not call Plaintiff again for three days after leaving that message. Fourth, Defendant never communicated directly to Plaintiff. Indeed, Plaintiff was able to block the calls following just a few rings via the “Block Calls Get Cash” app on her cell phone, so Defendant was put in a position where it effectively had to place repeated calls in order to try to reach her. Finally, the calls ceased as soon as Plaintiff’s attorney contacted Defendant on April 22, 2015.”

As to Count 2, the court held:

“The evidence submitted by Defendant in support of its motion shows that the statutorily required notice was sent to Plaintiff at her correct address on December 9, 2014, which was just one day after the initial communication with Plaintiff. The notice was not returned as undeliverable. Plaintiff, by contrast, has not adduced any evidence of her own that suggests the requisite notice was not sent to her correct address or that it was returned to Defendant as undeliverable. Her testimony that she never received the notice is simply not enough to create a genuine issue of material fact since the statute does not require that the notice be received.”

insideARM Perspective

This is a positive case for the industry. The court recognized and understood that the relevant provision of the FDCPA requires “intent to annoy, abuse, or harass.” 

The case is also an endorsement for policies, procedures and technology that control call attempts and voicemail messages.

Kudos to IC System. The company clearly had controls in place. As noted in the opinion, the calls were never back-to-back; there was always at least two hours between them, and often, more than that. The call attempts took place between the hours of approximately 8 a.m. and 7:45 p.m., with the vast majority taking place within ordinary business hours. The company only left one message during the entire four-month span, and did not call Plaintiff again for three days after leaving that message and, finally, the calls ceased as soon as Plaintiff’s attorney contacted the company on April 22, 2015. 

In the CFPB’s Outline of Proposed Rules, the bureau attempts to define “intent” by creating specific call limitations.  It could be argued that “intent to annoy, abuse, or harass” is better determined on a case by case basis.  It could also be argued that the number of call attempts made by all agencies might be reduced if the specific content of voice messages was defined as suggested by the CFPB in that same Outline.

Finally, insideARM did not research the other six FDCPA lawsuits filed by the plaintiff. Thus, it is unclear whether plaintiff received paydays in those other cases or whether defendants in those cases will use this decision to defend the actions.

If you’ve heard about the CFPB’s new rating system and wondered whether it will become a reality, in my opinion the answer is – yes — I see no possible way they wouldn’t have built their rating system into the upcoming release of the consumer complaint portal. 

The new system allows the complainant to select a 1 to 5 rating, and also type a short narrative.  My analysis of the public statements and FOIA materials indicates the following conditions will exist before a complainant has the option to provide a rating and narrative:

1. The complaint was entered through an existing CFPB input channel
   1. Web
   2. Phone
   3. Mail
   4. Fax
   5. Referral
2. The complaint was successfully routed to a company participating (registered) on the portal (e.g. Banks > $10-billion)
3. The company provided a response through their secure “Company Portal”
4. The consumer visits their “Consumer” portal, calls the call center, or uses any current dispute method
5. The consumer provides a rating and narrative, and also consents to them being shared

Once met, these conditions seem to satisfy the CFPB enough to provide this information publicly.  Rather than the benign “dispute,” left purposefully undefined, we may have a somewhat Yelpish future.  We love Yelp, but Yelp themselves are the only ones who can “do” Yelp.   

What could prevent this rating system from happening?

1. Analysis of the public comments about the proposed system were overwhelmingly negative about the concept
2. CFPB’s cranky new neighbor finds a way to stop it

Please reach out with any questions or concerns; It will be important to understand this new system and its ramifications – early.

JACKSONVILLE, Fla. — As those in the collection industry are well aware, the Telephone Consumer Protection Act (“TCPA”) prohibits the use of Automatic Telephone Dialing Systems (“ATDS”) to contact consumers on cellular telephones. Because of the tremendous growth in recent years in the use of cellular telephones by consumers, TCPA-compliant dialing systems are of paramount importance for all collection industry members. In no small part due to the lack of clarity surrounding the definition of an ATDS, an entire practice area has arisen in which consumer lawyers seek out clients who receive cellphone calls from debt collectors for the sole purpose of pursuing TCPA violations. The statutory damages for TCPA violations range from $500 to $1500 per call, and the cost of defending such cases, in which class action status is also often sought, can be staggering. With stakes this high, every victory for any member of the collection industry is a victory for the collection industry as a whole.

It is in this landscape that in September 2016 Stellar Recovery, Inc. secured its first milestone TCPA victory. That opinion, in a case called Pozo v. Stellar Recovery out of the United States District Court, Middle District of Florida, held that Stellar’s dialing technology, the LiveVox Human Call Initiator (HCI) system, was not an ATDS under the TCPA. The Pozo opinion was met with significant opposition by the consumer bar, whose mission it has been to undermine the ruling in an attempt to establish contrary authority in the Nation’s courts. Today, however, Stellar is pleased to announce that it has met that challenge and has once again prevailed on the issue, establishing favorable collection industry precedent in yet another Federal jurisdiction.

On February 7, 2017, in the case of Smith v. Stellar Recovery, Inc., Magistrate Judge Mona Majzoub of the United States District Court, Eastern District of Michigan, issued a lengthy and detailed opinion concluding—as did the Pozo court — that the LiveVox HCI dialing system is not an ATDS, and that its use complies with the TCPA. In her 20-page opinion Judge Majzoub closely examined the HCI technology and interpretations of what constitutes an ATDS, both from a regulatory perspective and from an analysis of case law on the topic. Significantly, the Court also considered the arguments raised by the Plaintiff directly criticizing the Pozo decision and urging the Court to find that Pozo was wrongly decided. To the contrary, Judge Majzoub conducted a thorough independent analysis, yet reached the same conclusion as the Pozo court: the LiveVox HCI technology used by Stellar to dial consumer cell phones is not an ATDS.

Stellar’s victory in Smith is a sound defeat of the direct efforts to undermine Pozo and further muddy the turbulent waters surrounding the issue of what constitutes an ATDS. Instead of creating a division among the Courts on the issue, the Smith decision in fact reaffirms the solidity of Stellar’s efforts to accomplish TCPA-compliant dialing, and certainly to LiveVox’s technology which provides a platform for doing so.

Stellar thanks LiveVox for its commitment to developing leading TCPA-compliant technology which allows Stellar and other collection industry members to service clients effectively and efficiently in the ever-evolving realm of consumer contact. Stellar also credits this important victory to Stellar’s innovative use of captive legal counsel, which utilizing its industry unique risk management model allows Stellar to target legal resources to combat unwarranted, and often meritless, consumer lawsuits rather than simply settling such cases without a fight. With this model, developed by Stellar in partnership with its captive law firm, Assurance Law Group, Stellar will continue to rise to the legal and practical challenges that face the collection industry by aggressively defending lawsuits and seeking to establish favorable precedent that pushes back against the growing tide of consumer litigation.

About Stellar Recovery

Stellar Recovery Inc. is an ARM leader headquartered in Jacksonville, Florida. SRI is dedicated to excellence in the accounts receivable industry by meeting and exceeding our client’s expectations.  Stellar Recovery leverages the use of technology to drive effective and efficient collections, while eliminating risks.  Please visit our website at www.stellarrecoveryinc.com or contact us at 904-438-2500.

Editor’s Note: insideARM also wrote about this case today. To see the insideARM story on this case, click here.

On Thursday February 2, 2017 a United States Magistrate Judge in Michigan issued a Report and Recommendation in a Telephone Consumer Protection Act (TCPA) case that determined the LiveVox, Inc. Human Call Initiator (HCI) System was not an Automatic Telephone Dialing System (ATDS) and that calls made to a consumer’s cell phone using that system did not violate the TCPA.

A copy of the Report and Recommendation can be found here.

Background

Plaintiff brought this lawsuit alleging that Defendant Stellar Recovery (Stellar) used an ATDS to call her cell phone dozens of times regarding a consumer debt, in violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (FDCPA), the Telephone Consumer Protection Act, 47 U.S.C. §§ 151-231 (TCPA), and various provisions of state law.

Before the Court was Plaintiff’s Motion for Partial Summary Judgment and Defendant’s Motion for Partial Summary Judgment.

In her Motion, Plaintiff contended that Stellar, a debt collection agency, used an ATDS to knowingly and willfully call her 53 times regarding a debt owed to Comcast of Detroit, LLC (Comcast). She claimed that the calls were made without her prior express consent, and after she filed Chapter 7 bankruptcy and subsequently had the debt discharged.

Stellar disputed the total number of calls made, claiming that it called Plaintiff only 35 times. Stellar further responded that it contacted Plaintiff using two different outbound “dialing systems”: Right Party Connect (“RPC”) and Human Call Initiator (“HCI”).

Stellar conceded that the RPC is an ATDS, and that it used the RPC to contact Plaintiff from July 18, 2014 until August 12, 2014. However, Stellar argued that the undisputed facts establish that HCI, which Defendant began using on August 12, 2014, is not an ATDS, and that Stellar was entitled to summary judgment regarding all the calls made using that system.

Magistrate Judge Mona K. Majzoub provided a succinct description of the issue before her:

“The primary issue in the motions for partial summary judgment is, therefore, whether the HCI system used by Defendant Stellar Recovery is an ATDS.”

The Opinion

Magistrate Judge Majzoub highlighted the major characteristics of the HCI system from the evidence presented to her: 

• The HCI equipment is configured in such a way that it cannot dial phone numbers without the clicker agents initiating the call, and therefore the system, while clearly an advanced and efficient method of contacting debtors, is not an autodialer.
• The equipment cannot store numbers, nor can it dial numbers without the call being initiated by the clicker agents.
• When the HCI system is in use, human intervention—the function of the clicker agents—is clearly required.
• The HCI system includes both software and hardware components, that these are not shared by the RPC or any of the other dialing systems, and that they are unique to the HCI system.

In her Report Judge Majzoub also noted:

“At least one other court considering the same HCI system found that it did not constitute an autodialer. See Pozo v. Stellar Recovery Collection Agency, Inc., No. 8:15-cv-929-T-AEP, 2016 WL 7851415 (M.D. Fla. Sept. 2, 2016). Regarding the HCI system’s capacity, the court reasoned that:

Of course, Stellar could hypothetically hire a team of programmers to modify and rewrite large portions of HCI’s code to enable HCI to make autodialed calls, eliminating clicker agents, the dashboard, and all human input. However, the fact that Stellar might be able to undertake such a pointless endeavor does not mean that HCI has the “capacity” to be an autodialer or that it has the “potential functionality” to be an autodialer within the meaning of the TCPA and the 2015 Order.

Moreover, as the court pointed out in Pozo, other courts have upheld the use of dialing systems which employ a “‘point and click’ function.” 2016 WL 7851415, at *5 (collecting cases). One such case, Strauss v. CBE Group, Inc., 173 F. Supp. 3d 1302 (S.D. Fla. 2016), even involved a debt collection agency, like Defendant Stellar Recovery, which used two different systems to contact the plaintiff. Id. at 1307. The court found that one of the systems was a predictive dialer and therefore violated the TCPA, but that the other system “at least as [the defendant] has configured it,” requires an agent to “manually initiate the call by clicking a computer mouse or pressing a keyboard enter key.” The court granted summary judgment to the defendant for the claims arising from calls made using that system.  Plaintiff is correct that the 2015 TCPA Order provides that “[h]ow the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment, based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination.” 30 F.C.C.R. at 7975. However, the undersigned finds the cases that involve systems which require a person to initiate each individual call, like Strauss, instructive.”

 The Judge concluded:

“Plaintiff has failed to create a genuine material dispute of fact over whether the HCI dialing system constitutes an autodialer. Defendant Stellar Recovery indisputably began using the HCI system to contact Plaintiff starting August 12, 2014. Therefore, summary judgment should be awarded to Defendant Stellar Recovery on Plaintiff’s TCPA claims arising from all calls made on or after August 12, 2014.” Editor’s Note: Defendant Stellar Recovery’s Motion only sought summary judgment on Plaintiff’s TCPA claims arising from the calls made using the HCI system.

insideARM Perspective

The analysis of Magistrate Jude Majzoub was thorough and thoughtful.  She was clearly persuaded by the evidence presented by Stellar.

insideARM contacted LiveVox for reaction. Mark Mallah, LiveVox’s General Counsel commented:

“LiveVox is very pleased to have now won two out of two cases concerning HCI, our clicker app.  We believe that the Smith ruling not only reinforces our prior victory in Pozo, it expands upon it with respect to potential capacity.”

“We think that the Smith decision is great for the industry in that it once again validates point and click applications such as ours, continuing a series of successful cases in this regard.”

However, to be clear, Stellar was successful in defending the TCPA claims regarding calls made using the HCI system. Plaintiff was awarded summary judgment regarding calls made using the RPC system.  The Judge determined that there was still a question of fact regarding whether Plaintiff is entitled to treble damages on these calls and regarding the number of calls made using the RPC, and therefore regarding the total amount of damages.

Calls to cell phones using any ATDS equipment are still a potential TCPA liability.

Editor’s Note: See also the Stellar Recovery Press Release on this case here.

Yesterday Jessica Rich, the Director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection announced to the staff of the agency her resignation.  Her last day in the office will be Friday, February 17th. Today, acting FTC Chairman Maureen Ohlhausen named Tom Pahl as the acting Director, replacing Jessica Rich.

Pahl has been a partner with the D.C. law firm Arnall Golden Gregory since the fall of 2016, following his summer departure from the Consumer Financial Protection Bureau. While at the CFPB, he was Managing Counsel, responsible for leading the rulemaking, policy development and regulatory guidance activity related to the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, the Dodd-Frank Act and other regulatory requirements.

Prior to joining the CFPB, Pahl was Assistant Director for the Division of Financial Practices, Bureau of Consumer Protection at the FTC. While at the FTC Pahl managed the division responsible for law enforcement, rulemaking and policy development activities related to financial services, including debt collection, payday lending, mortgage lending and debt relief services.

insideARM Perspective

In recent weeks Tom Pahl has written a series of blog posts for both insideARM and The Hill, including:

The tortoise, not the hare, will win the deregulation race 2/2/17

Collector contact caps and the application of “regulatory humility” 1/30/17

Trump’s wise choice for the FTC 1/26/17

How Washington will decide the consumer watchdog’s fate 1/26/17

The CFPB and the FTC should divide up debt collection enforcement 1/9/17

The CFPB is a sleeping giant on data security. Let’s not wake it 12/28/16

Consumer financial protection will remain alive under Trump 12/16/16

In his December 28 article on data security, Pahl may offer a window into his focus in his new role. He states,

Whether by design or default, keeping the FTC (not the CFPB) in the lead on data security makes sense. The FTC has substantial data security expertise through many years of enforcement, rulemaking and policy development work, which is critical given the complexity of many data security matters.

When new leadership appointed by Donald Trump arrives at the CFPB, I anticipate they will change the CFPB’s priorities and agenda in many ways. However, the new leaders should not change the CFPB’s somnolent role on data security.

To anyone who has been paying attention, it will come as no surprise that data security will be a major area of regulatory focus in 2017 and beyond, not only at the federal level, but among states as well, as evidenced by recent activity in New York.

In his January 9 article he suggests that the CFPB and FTC should divide debt collection enforcement:

With more than five years of experience, the time is ripe for the FTC and the CFPB to consider revising their MOU to include a substantive division of enforcement responsibilities where they have concurrent authority.  One proposal would be to allocate agency enforcement more clearly in markets for which the CFPB has defined by rule larger participants.  The CFPB would have primary enforcement responsibility for larger participants in these markets, while the FTC would have primary enforcement responsibility for everyone else. 

Finally, in his February 2 article on deregulation, he offers advice to industry,

President Trump’s appointees undoubtedly will move as quickly as they can, and they are going to need help. Industry can assist in identifying rules that are the most important to change. Think tanks, academics, and others can do the same. Even other agencies can help pare back regulations. The FTC, for example, has a long-standing advocacy program (and one that is likely to remain very active under acting FTC Chairman Maureen Ohlhausen) that files public comments to assist other agencies in understanding how proposed changes in their rules affect consumers and competition.

This appointment may offer an fresh opportunity to industry groups to make their case, at least to the FTC.

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MINNEAPOLIS, Minn. — Moss & Barnett is pleased to announce that David D. Cherner has joined the firm’s creditors’ remedies and bankruptcy team. Dave counsels creditors, debt buyers, collection law firms, collection agencies, and other businesses engaged in accounts receivable management on compliance with federal, state, and local credit and collection laws, as well as compliance and risk management strategy.

Prior to joining Moss & Barnett, Dave served as corporate counsel and director of state government affairs for ACA International, the Association of Credit and Collection Professionals, and as the chief compliance officer for a nationwide accounts receivable management company. Dave received his J.D. from Marquette University Law School and his B.A. from Lawrence University.

Dave is on the steering committee of the Consumer Relations Consortium (CRC), a national organization of larger market participant collection agencies formed by industry executives who believe that a reasonable and knowledgeable voice is needed to address both issues and solutions. In his role with the CRC, Dave proactively engages with key federal and state regulators and consumer groups to effect positive change for all parties.

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“Dave Cherner is an incredibly skilled attorney with a proven track record of successfully creating and implementing compliance solutions for debt industry clients. His astute and creative approach to the practice of law, along with his “real world” experience in devising and actualizing compliance management systems that work as an in-house attorney, will benefit our firm and its clients,” said John Rossman, Chair of the Creditors’ Remedies and Bankruptcy Practice Group at Moss & Barnett.

PHOENIX, Ariz. — BillingTree®, a leading payment technology and services provider, announced last week the appointment of Barton ‘Chip’ Bright as General Counsel and Chief Compliance Officer. Bright will lead the Compliance and Risk teams at BillingTree which monitor not only internal compliance concerns but also ensures BillingTree customers in all markets have the tools to remain compliant in the face of increasing regulatory scrutiny.

Last year BillingTree added 10 new hires to its employee base in IT, development and quality assurance along with the addition of Bright. Growth and new hires were driven by expansion in new and existing vertical markets including, Accounts Receivables Management (ARM), Healthcare, Property Management and Financial Services. Additional staffing is planned with open roles currently in Sales, IT and Client Services. A current list of all open BillingTree positions is available at https://mybillingtree.com/about-billingtree/careers/

Bright joins BillingTree as a member of the Executive Team coming most recently from SunTrust, where he managed credit card compliance for the $200 billion bank, and FactorTrust, where he held the position of General Counsel and VP of Compliance.  Bright brings over 20yrs experience in the compliance sector to the firm. He and the many additional new hires are joining an award-winning team, as BillingTree was recently named by the Phoenix Business Journal as one of the best places to work in the Valley of the Sun for the second year in a row.

“The addition of Chip expands our commitment to compliance in our industry and the industries that we service. With a range of vertical markets experiencing a shifting regulatory landscape, compliance should be the cornerstone of payment operations. Chip enables us to be a better leader in the payments industry while offering our clients compliant merchant services and payment technology to help them navigate regulatory change,” commented Edz Sturans, CEO and President at BillingTree. “Chip joins a company poised to continue our growth path through the coming years. The success of BillingTree is built on the strength of its employees, and we welcome Chip to an award-winning team.”

About BillingTree

BillingTree® is the leading provider of integrated payments solutions to the healthcare, ARM and financial services industry verticals. Through its technology-enabled suite of products and services, BillingTree enables organizations to increase efficiency and decrease the costs of payment processing while adhering to compliance regulations. Leveraging more than a decade of market experience, BillingTree is dedicated to growing payments with technology through an integrated omni-channel offering, suite of proprietary products and value-added services, and a Company-wide focus on delivering extraordinary customer service.

Federal Trade Commission Acting Chairman Maureen K. Ohlhausen announced today that Jessica Rich, Director of the Bureau of Consumer Protection, is leaving the agency on February 17 after 26 years of service.

“We are grateful to Jessica for her many years of service to the FTC and the public,” said Ohlhausen. “She is a pioneer in consumer protection who spearheaded major initiatives regarding consumers’ privacy, data security, and financial transactions. Many of the FTC’s programs bear her indelible mark.”

As Bureau Director, Rich managed eight consumer protection divisions and eight regional offices charged with stopping consumer fraud and deception and protecting consumers’ privacy. Under her tenure, the Bureau brought a series of major law enforcement actions that returned billions of dollars to consumers, including cases against Western Union, Volkswagen, Herbalife, Apple, Google, and Amazon. She was appointed Bureau Director by former Chairwoman Edith Ramirez in 2013. Prior to that, she served in a number of senior roles at the FTC, including Deputy Director of the Bureau, Associate Director of the Division of Financial Practices, and Acting Associate Director and Assistant Director of the Division of Privacy and Identity Protection.

During her tenure, Rich also led the FTC’s efforts to expand its technological expertise. She created the FTC’s Office of Technology Research and Investigations (OTech) to train staff and assist with tech-related investigations, reports, and public workshops.  She hired technologists and attorneys with tech backgrounds to bolster the FTC’s understanding of the evolving marketplace and perform original research. She developed influential FTC policy reports, including reports on the Internet of Things, Big Data, data brokers, mobile apps, and cross-device tracking. And she oversaw public fora on a range of tech-related matters, including ransomware, Smart TVs, drones, and crowdfunding.

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As a division manager earlier in her career, Rich spearheaded the FTC’s privacy and data security program, building it from a small team to one of the agency’s signature programs. Among other things, Rich led development of the FTC rules protecting children’s online privacy (Children’s Online Privacy Protection Rule) and sensitive financial information (Safeguards Rule), and brought precedent-setting enforcement actions to address the privacy and data security practices of Microsoft, BJ’s Warehouse, DSW, TJX, and ChoicePoint.

Rich, who joined the agency in 1991, is a recipient of the FTC Chairman’s Award, the agency’s highest award for meritorious service, and a graduate of Harvard University and New York University Law School.

insideARM Perspective

The Bureau of Consumer Protection (BCP) also oversees the debt collection industry. In May 2016, Jessica Rich warned the industry that debt collection agencies that fail to live up to their obligations under the Fair Credit Reporting Act “can expect to hear from the FTC.”

Under Rich, the BCP also regularly pursued bad actors, a practice that receives wholehearted support from the Debt Collection Industry. For instance,

In April 2015 insideARM wrote about the FTC and the Illinois Attorney General’s Office partnering to sue a fake debt collection agency. In the announcement they said they had obtained a court order temporarily halting a fake debt collection scam located in a suburb of Chicago. The defendants were charged with illegally using threats and intimidation tactics to coerce consumers to pay payday loan debts they either did not owe, or did not owe to the defendants.

In May 2015 insideARM wrote about the FTC and the Office of the Florida Attorney General partnering to go after “true Robocallers.” They charged a web of related defendants based in Orlando with bombarding consumers with illegal robocalls in an attempt to sell them bogus credit-card interest rate reduction and debt relief services. In all, the complaint alleged the defendants’ robocall scheme bilked consumers out of more than $15.6 million since at least January 2013.

And in June 2015 insideARM wrote that at the first of three “Debt Dialogues” hosted by the FTC, Jessica Rich provided a review of debt collection complaint statistics and data related to enforcement actions. She said “the FTC is very busy with enforcement actions this year, having already filed eight new debt collection cases in 2015.” She reported that the FTC had expanded efforts in the debt collection arena, and would continue to do so until the problems abate. Rich also said that they wanted to partner with the collection industry to stop bad actors.