WILMINGTON, Del. – Phillips & Cohen Associates, Ltd., (PCA) the global leader in deceased account management, is excited to announce the celebration of its 20^th Anniversary.

Founded by Matthew Phillips and Adam Cohen in Westampton, NJ, in 1997, PCA evolved from start-up collection agency to the worldwide leader in compassionate account care in a relatively short period of time.  Throughout its existence, PCA has adapted and flourished in the ever-changing financial services industry by sticking to its core values of Commitment, Compliance, Compassion, and Innovation.  Matthew Phillips commented “[i]t’s been an amazing 20 years and we are fortunate and thankful to work with so many incredible people for so long. It’s something we never take for granted.”

Domestically headquartered in Wilmington, Delaware, with international service offerings in the United Kingdom, Ireland, Canada, Spain, Australia and New Zealand, PCA currently employs over 500 people with plans for additional growth.  In fact, the 20^th Anniversary comes at an exciting time for the global organization, as plans for expansion both domestically and internationally have been recently announced.  Adam Cohen added “[e]ven after two decades, we still feel the same excitement as we grow our business in the US and around the world. We look forward to driving innovation in our company and the industry for years to come.”

Amongst PCA’s proudest moments are the many accolades and awards the company has earned over the years.  The United States team has been awarded Delaware’s Top Workplaces for seven (7) consecutive years, including in 2015 when it was named as the Top Mid-Size Workplace. Industry Publication, insideARM, repeatedly named PCA a Top Place to Work in Collections. In the United Kingdom, our Manchester team achieved: Investors in People Champion status, a first for a collection agency; Credit Today’s “Treating Customers Fairly” Award; and CICM’s “Responsible Approach to the Consumer.  Howard Enders noted “[w]hile we greatly appreciate the industry recognition we’ve received over the years, the most gratifying feedback continues to come from our people, our clients, and the millions of consumers we’ve helped over the years.”

PCA Throughout the Years – A 20 Year Timeline

• 1997: Founded in Westampton, NJ.
• 1998: Introduction to compassionate probate/estate recovery services.
• 2004: PCA Acquisitions, LLC is formed as PCA’s specialty debt-buying arm.
• 2006: Phillips & Cohen Associates (UK) opens in Manchester, UK.
• 2008: Domestic Corporate Headquarters moves to Wilmington, DE.
• 2012: Phillips & Cohen Associates (Canada) opens in Pointe-Claire, QC Canada
• 2013: PCA establishes Estate-Serve®; the industry’s first and only online portal for consumer, self-service estate account management.
• 2013: Phillips & Cohen Associates (Australia) opens in Melbourne, Australia.
• 2013: PCA adds real-time speech analytics to its collections and estates service offerings in the US
• 2016-2017: U.S. Operations expansion and international growth in Ireland, New Zealand and Spain.

About Phillips & Cohen Associates, Ltd.

Phillips & Cohen Associates, Ltd. is a full service accounts receivable management company providing customized services to creditors in a variety of specialized market segments.  Phillips & Cohen Associates, Ltd is headquartered in Wilmington, DE, with additional offices in Colorado, Florida, and New Jersey, as well as international offices in the UK, Canada, Spain and Australia.  For more information about Phillips & Cohen Associates visit www.phillips-cohen.com. PCA provides Equal Employment Opportunity for all individuals regardless of race, color, religion, gender, age, national origin, disability, marital status, sexual orientation, veteran status, genetic information and any other basis protected by federal, state or local laws.

In an opinion post in The Hill, former managing counsel and lead of the debt collection rulemaking team at the CFPB, Tom Pahl, offers insight on how the determination of new leadership at the bureau will wind through all branches of government. He concludes with this suggestion,

Perhaps it would be in the long-term interest of consumer protection to restructure the CFPB as a bipartisan, multimember commission that is less controversial and more transparent, deliberative, and centered.

The article is worth a read, as Pahl specifically references debt collection rulemaking.

Additionally, a the Wall Street Journal (note: registration required) reported today that the Trump Administration suggested it would seek change at the CFPB by changing its personnel. In an interview the Journal conducted with Gary Cohn, Director of the White House National Economic Council, he said “personnel is policy.”

insideARM has published extensively about the question of whether CFPB Director Richard Cordray will continue to lead the bureau in the short term. His five year term expires in July 2018, but many have speculated that President Trump will replace him now.  One player in the saga is the D.C. Circuit. In October 2016 in the case of PHH v. CFPB, the D.C. court ruled that the single-director-removable-only-for-cause structure violates the U.S. Constitution’s separation of powers.

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PHH, a mortgage company in Mount Laurel, N.J., wanted the U.S. Court of Appeals for the District of Columbia Circuit to vacate a June 2015 enforcement ruling by the CFPB that said PHH violated anti-kickback provisions in Section 8(a) of the Real Estate Settlement Procedures Act (RESPA) and had to give up $109 million in what CFPB Director Cordray had said were ill-gotten mortgage reinsurance premiums. Among other issues, the case called into question the CFPB’s structure and authority.

The CFPB has petitioned for a rehearing en banc in the case.

Editor’s Note: In the Court of Appeals many cases are originally decided by a panel of 3 Judges. That is what occurred in this case. After the panel has heard the appeal and issued its opinion, either party to the appeal may choose to request another hearing “en banc” in most appeals courts.  This request asks the court to hear the case again, this time with all of the court’s judges listening to the case.

Late last month, a motion to intervene was filed with the D.C. Circuit by the Democratic Attorneys General of 16 states and the District of Columbia, as well as several consumer groups.  PHH argued that the motion should be denied. 

Yesterday, the D.C. Circuit did in fact deny that petition.

On January 25th, the Ninth Circuit Court of Appeals partially reversed and remanded a Fair Debt Collection Practices Act (FDCPA) settlement against debt collector ARS National Services, Inc. (ARS) over voice messages left on class members’ voicemail, criticizing a magistrate judge for approving a settlement that forfeited 4 million members’ rights to pursue future class claims in exchange for “worthless injunctive relief.”

The case is Koby v. ARS National Service, Inc. (United States Court of Appeals for the Ninth Circuit, Case No. 13-56964, District Court Case No. 3:09-cv-00780-KSC). The case has been ongoing for several years; insideARM first reported about it in August 2010.

A copy of the opinion can be found here. 

Background

The underlying theory of the original lawsuit was a claim under the FDCPA that voice messages left with consumers failed to “meaningfully disclose” the identity of the collector. They alleged that ARS violated §§ 1692d(6) and 1692e(11) of the FDCPA by leaving voicemail messages in which the callers failed to disclose (1) that they worked for ARS, (2) that ARS is a debt collector, or (3) that the purpose of the call was to collect a debt.

The specific voice message left with named plaintiff Koby was as follows:

“This is Robin calling for Michael Koby, if you could please return my call at 800-440-6613. My direct extension is 3171. Please refer to your Reference Number as 15983225.”

There were three named plaintiffs. The other named plaintiffs received similar messages.

The named plaintiffs brought the action on behalf of everyone in the United States who received a voicemail message from ARS which failed to disclose that information. The class consists of some four million people nationwide.  

In August 2011, after the district court denied ARS’s motion to dismiss the case on the pleadings, the parties began discussing settlement. Over the course of more than a year, the parties engaged in settlement discussions with the assistance of a magistrate judge. The named plaintiffs and ARS eventually consented to having the same magistrate judge conduct all further proceedings in the case, including the entry of final judgment. The district court entered an order authorizing the magistrate judge to exercise jurisdiction over the case, and she presided over all further proceedings.

In January 2013, following a full-day mandatory settlement conference before the magistrate judge, the parties finally hammered out a deal. Under the terms of the settlement, the parties agreed to seek certification of a nationwide, settlement-only class under Federal Rule of Civil Procedure 23(b)(2).

The proposed class consisted of everyone in the United States who between April 2008 and August 2011 received a voicemail message from ARS that failed to identify ARS as the caller, disclose that the call was from a debt collector, or state that the purpose of the call was to collect a debt. (The parties chose those dates because April 2008 is the beginning of the applicable statute of limitations period and ARS ended the alleged FDCPA violations in August 2011, when it adopted the new voicemail message.) Because the class would be certified under Rule 23(b)(2), the parties agreed that no notice of any kind would be sent to the four million class members and that no one would be permitted to opt out of the class.

ARS agreed to pay each of the three named plaintiffs $1,000, the maximum they could hope to recover under the FDCPA as none of them had suffered any actual damages. ARS represented to the court (although it is unclear whether the magistrate judge took any steps to verify this fact) that its net worth was only $3.5 million, which meant the other four million class members could collectively recover no more than $35,000. Given the impossibility of distributing less than a penny to each member of the class, ARS agreed to make a $35,000 cy pres award to a local San Diego charity instead. ARS also agreed to pay class counsel the negotiated sum of $67,500 in attorney’s fees.

The four million unnamed class members received no monetary compensation under the settlement. They are, however, the beneficiaries of a stipulated injunction to be entered against ARS. The injunction requires ARS to continue using, for a period of two years, the new voicemail message it had adopted back in August 2011. In return, the four million class members forfeited the right to seek damages from ARS as part of a class action. The class members retained the right to pursue damages claims against ARS on an individual basis.

The four million class members did not receive individual notice of the proposed settlement, but one class member—the appellant in this case, Bernadette Helmuth—filed an objection. She is the named plaintiff in a separate class action against ARS pending in the district court for the Southern District of Florida. Her lawsuit alleges essentially the same FDCPA violations alleged in this case, except that she seeks certification of a much smaller class limited to Florida residents who owed money to a particular creditor on whose behalf ARS was attempting to collect.

After the parties agreed to the settlement in this case, ARS asked the district court in Florida to stay all further proceedings in Helmuth’s case on the ground that, if approved, the settlement would bar her case from proceeding as a class action. The district court in Florida agreed to stay Helmuth’s action pending final approval of the settlement.

The Ninth Circuit Opinion

The Opinion leads off with the following description of the appeal: 

“The magistrate judge in this case approved a class action settlement in which the named plaintiffs and class counsel got what they wanted but the remaining four million class members got worthless injunctive relief. In exchange for receiving nothing of value, the class members gave up their right to assert damages claims against the defendant in any other class action. We are asked to decide two issues: whether the magistrate judge had the authority to exercise jurisdiction without obtaining the consent of all four million class members; and, assuming we get past that issue, whether the magistrate judge abused her discretion by approving the settlement as fair, reasonable, and adequate.”

The court then spent the bulk of the opinion criticizing the magistrate’s decision:

“The magistrate judge abused her discretion by approving the settlement in this case. The settlement should not have been approved for one primary reason: There is no evidence that the relief afforded by the settlement has any value to the class members, yet to obtain it they had to relinquish their right to seek damages in any other class action.

The settlement’s injunctive relief is worthless to most members of the class because it merely dictates the disclosures ARS must make in future voicemail messages for a period of two years. That relief could potentially benefit class members who are likely to be contacted by ARS during the two-year window, but there is an obvious mismatch between the injunctive relief provided and the definition of the proposed class. The class was not defined to include those who are likely to be contacted by ARS in the future; it was defined to include those who had suffered a past wrong at ARS’s hands—receiving a voicemail message between 2008 and 2011 that did not disclose certain information about the caller and the purpose of the call. The fact that a class member was a target of collection efforts sometime between 2008 and 2011, however, does not without more establish that he or she would likely be contacted by ARS again after October 2013, when the settlement was approved.

Because the settlement gave the absent class members nothing of value, they could not fairly or reasonably be required to give up anything in return. Yet the settlement requires absent class members to relinquish their right to pursue damages claims against ARS as part of a class action.

The fact that class members were required to give up anything at all in exchange for worthless injunctive relief precluded approval of the settlement as fair, reasonable, and adequate under Rule 23(e)(2).”

insideARM Perspective 

The most interesting aspect of this case is not the Ninth Circuit’s admonition of the magistrate’s earlier decision. It is the voice message that led to this case being filed in the first place, leading to extended litigation and attorney fee expense for over six years. The voicemail in question that was left by ARS is the same type of message that is currently being recommended by the Consumer Financial Protection Bureau (CFPB) in its Outline of Proposed Rulemaking, issued in July 2016. 

On July 28, 2016 insideARM wrote about the CFPB proposed voicemail message.

“The Bureau is considering a proposal that would provide that no information regarding a debt is conveyed — and no FDCPA “communication” occurs — when collectors convey only: (1) the individual debt collector’s name, (2) the consumer’s name, and (3) a toll-free method that the consumer can use to reply to the collector. For example, a voicemail could state, “This is John Smith calling for David Jones. David, please contact me at 1-800-555-1212.”

The CFPB’s rationale for this proposal:

“Many collectors (currently) believe that, under the FDCPA, they may not be able to leave voicemails or other messages for consumers because the FDCPA requires them to leave information identifying themselves as a collector and provide certain warnings to the consumer. If such content is seen or heard by a third party, however, that would risk violating FDCPA prohibitions against revealing debts to third parties. As a result, when consumers do not answer collections calls, some debt collectors simply hang up and call back, repeating this process until the consumer picks up the call. This may result in consumers receiving many more collection calls than they presumably would if debt collectors could leave a simple message.”

If ultimately adopted, this proposal would appear to provide a “safe harbor” for collectors to leave messages, reduce frivolous litigation over the content of voice messages, and encourage more communication with a consumer. Interestingly, the CFPB’s proposed message is not the one produced by either the famous Foti case or the Zortman case.

Six years in the making, this case is the poster child for the seemingly endless supply of “voicemail message” lawsuits. The ARM industry has been in a No Win situation for years. Leave messages? Don’t leave messages? Foti? Zortman? insideARM has written extensively on the “Catch 22” nature of the issue. See:  here or here or here. There was always another new theory and another new case. 

Let’s hope the CFPB rulemaking puts an end to these lawsuits.

This post originally appeared on the Consumer Financial Services Blog and is re-published here with permission.

The U.S. Court of Appeals for the First Circuit recently affirmed a bankruptcy court’s ruling that a mortgagee did not violate the discharge injunction in 11 U.S.C. § 524(a) by sending IRS 1099-A forms to borrowers after their discharge, agreeing that the IRS forms were not objectively coercive attempts to collect a debt.

A copy of the opinion in Bates v. CitiMortgage, Inc. is available at:  Link to Opinion.

The borrowers obtained a mortgage loan secured by their home. They filed bankruptcy under Chapter 7 in 2008 and received a discharge of their personal liability for the loan in 2009.

The borrowers entered into a loan modification agreement post-discharge, which did not reaffirm their personal liability but allowed them to remain in the home as long as they made payments. The borrowers defaulted under the modification agreement, the mortgagee foreclosed and the borrowers moved out in October 2011.

In January 2012, each borrower received an IRS Form 1099-A by mail. One of the boxes on the forms was checked, stating that “the borrower was personally liable for the repayment of the debt.”  The borrowers’ attorney sent a letter to the mortgagee demanding the revocation of the 1099-A forms due to the bankruptcy discharge, which the mortgagee refused to do.

In May 2013, the borrowers filed a motion to reopen their bankruptcy case, then sued the mortgagee for trying to collect on the discharged mortgage debt in violation of the discharge injunction provisions under 11 U.S.C. § 524(a).

In June 2013, the borrowers received a pre-recorded phone call from the mortgagee requesting proof of insurance on their former home.

Both sides moved for summary judgment, and the bankruptcy court granted the borrowers’ motion, finding that the phone call violated the discharge injunction, but also finding the borrower failed to prove any damages.

The bankruptcy court granted summary judgment in the mortgagee’s favor on the remaining claims, including the borrowers’ claim that the 1099-A forms violated the discharge injunction, reasoning that they provided “no objective basis” for borrowers to believe that the mortgagee was trying to collect the mortgage debt.

The borrowers appealed the bankruptcy court’s rulings on damages and the 1099-A forms, but the district court affirmed both. The borrowers then appealed to the First Circuit.

On appeal, the Appellate Court began by explaining that under the federal Tax Code, discharged debt can count as taxable income. 26 U.S.C. § 61(a)(12). However, debt discharged in bankruptcy on a qualified principal residence is not considered taxable income. 26 U.S.C. § 108(a)(1)(A).

Section 524(a) of the Bankruptcy Code prohibits “acts to collect, recover, or offset debts discharged in bankruptcy proceedings. … To prove a discharge injunction violation, a debtor must establish that the creditor ‘(1) has notice of the debtor’s discharge …; (2) intends the actions which constituted the violation; and (3) acts in a way that improperly coerces or harasses the debtor.’”

The First Circuit noted that the parties only disputed the third element, i.e., whether the IRS forms “were an improperly coercive or harassing attempt to collect on the discharged debt.”

The Court explained that whether conduct is coercive or harassing is determined using an objective standard. “[T]he debtor’s subjective feeling of coercion or harassment is not enough.” Under the objective standard a court considers “the facts and circumstances of each case, including factors such as the ‘immediateness of any threatened action and the context in which a statement is made.’” However, “bad acts that do not have a coercive effect on the debtor do not violate the discharge.”

The First Circuit agreed with the bankruptcy court that the IRS 1099-A forms were not an improper coercive attempt to collect the discharged debt, reasoning that (a) the forms provided “tax information” but did not demand payment or threaten any legal action; (b) the forms provided the outstanding principal balance as of the foreclosure, but did not state that the borrowers owed any money to anyone; and (c) incorrectly checking the box stating that “the borrower was personally liable for repayment of the debt” did not matter because it did not change the informational nature of the form or demand payment.

The Court rejected as inapposite the borrowers’ argument, citing In re Lumb, 401 B.R. 1 (B.A.P. 1st Cir. 2009), that the IRS forms put them “between a rock and a hard place” because they either “had to pay the discharged debt or seek tax advice.”

In Lumb, unlike the case at bar, the “creditor threatened to sue the debtor’s wife to collect if the debtor did not pay up.” Post-discharge, the creditor sued, causing the debtors to incur legal fees defending “the meritless lawsuit.”  Thus, the debtor in Lumb “was in a jam: pay the discharged debt, or pay the legal fees and risk losing the lawsuit.” The First Circuit here noted “[s]o unlike in In re Lumb, where the consequence of paying to defend a bogus lawsuit was brought on by the creditor’s misdeeds, here the consequence of potentially needing tax advice was triggered by the foreclosure itself. That some consequence may have followed from the [borrowers’] receipt of the 1099-A Forms does not make that consequence coercion.”

Finally, the First Circuit rejected the borrowers’ argument that the bankruptcy court should have considered the mortgagee’s failure to correct the 1099-A forms and the May 2013 pre-recorded phone message in determining whether coercion existed, reasoning that even if the 1099-A form contained an error, “filing the 1099-A Forms did not create tax liability for the [borrowers] or any other consequences beyond those that come with foreclosure.”

However, the Court held that because “there were no consequences and no attempt to collect a debt, [the mortgagee’s] failure to retract the 1099-A Forms does not give rise to an inference of coercion.”

As to the pre-recorded call, the First Circuit reasoned that it saw no reason to find that the call made the IRS forms objectively coercive because the call was made “around a year and a half after [the borrowers] received their 1099-A Forms.”  As there was no other evidence in the record of communications between the mortgagee and borrowers after the foreclosure, and the borrowers did not explain why the one phone call rendered the 1099-A forms objectively coercive, the Court refused to do so.

The First Circuit concluded by affirming the bankruptcy court’s ruling that the mortgagee did not violate the discharge injunction, explaining that while it had “no doubt that the 1099-A Forms caused the [borrowers] stress and concern,” their “subjective feeling of coercion is not enough to prove a violation of the discharge injunction, and the [borrowers] have not presented evidence that the Forms were objectively coercive.”

ROCKVILLE, Md. — The Compliance Professionals Forum (CPF) is proud to announce its Editorial Review Board members for 2017. This especially strong group of industry experts will oversee member resources throughout the year, ensuring CPF provides the deepest and most practical compliance insight possible to its members.

The following credit and collections veterans will be tasked with reviewing and enhancing CPF content for applicability and legal issues:*

Rozanne M. Andersen – Ontario Systems
Tracey Bannochie – DCM Services
John Bedard – Bedard Law Group P.C.
Renee Bogar – Radius Global Solutions Inc.
Tim Collins – Convergent USA
David Cherner – Moss & Barnett
Nicole Cummins – Windham Professionals
Sarah Doerr- Moss & Barnett
Bob Deter – National Enterprise Systems
Thomas R. Dominczyk – Maurice Wutscher
Caren Enloe – Smith Debnam
Mike Hiller – American Profit Recovery
David Kaminski – Carlson & Messer, LLP
Kelly Knepper-Stephens – Stoneleigh Recovery Associates, LLC
James McCarthy
Joann Needleman – Clark Hill PLC
James Null – Windham Professionals
Tom Pahl – Arnall Golden Gregory
Sheri Stringer – Account Control Technology, Inc.

CPF members have never benefitted from a stronger group of experts and peers. 

“Legislative and regulatory uncertainty is going to be the defining mark of 2017 and 2018 — so the expertise of our Editorial Review Board will be more important than ever. Compliance Professionals Forum members can rest assured that items they download have been vetted by the best minds in the industry,” said Director of Education Mike Bevel.

The board is made-up of recognized experts in consumer financial services and collection law, former Consumer Financial Protection Bureau management, experienced general counsel and chief compliance officers of collection agencies, creditors and debt buyers, as well as compliance consultants and trainers.

About the Compliance Professionals Forum

The Compliance Professionals Forum is a membership organization and source for industry intelligence on emerging industry compliance pratices. CPF offers practical, timely answers to your toughest compliance questions – when you need them, in the format you want them.

Members learn how their company compares with others in the industry, via CPF’s benchmark reports, peer calls, and regional compliance meetings. Plus, members are constantly improving their system with CPF’s tools, checklists, call-scripts, spreadsheets, and policies/procedures.

CPF is powered by insideARM; the name you already trust for news and information.

*Review by the Editorial Board is not considered the same as legal advice.

Want to join the Editorial Review Board?

If you have significant industry expertise and feel like you would be a valuable addition to The Compliance Professionals Forum’s Editorial Review Board, please send an email of interest to editor@compliancePF.com.

MINNEAPOLIS, Minn. — The International Association of Commercial Collectors, Inc. (IACC) recently elected its board of directors for the 2017 year during the association’s 46th Annual Convention in Miami Beach, Fla.

Directors have been elected by their fellow association members to serve in a leadership role, providing guidance and direction for the association.

The 2017 IACC Board of Directors:

• President: Greg Cohen, Caine & Weiner, Woodland Hills, Calif.
• Vice President: Bill Mann; Joseph, Mann & Creed; Twinsburg, Ohio  
• Treasurer: Anthony Terry, Continental Recovery Filing Solutions, Simi Valley, Calif.
• Past-President: Tom Brenan, Altus, GTS, Inc., Kenner, La.
• Director: Wanda Borges, Borges & Associates, LLC, Syosset, N.Y.
• Director: Randy Frazee, BARR Credit Services, Tucson, Ariz.
• Director: Thomas Hamilton, American Lawyers Quarterly, Cleveland
• Director: Robert Ingold, Commercial Collection Corp. of New York, Tonawanda, N.Y.
• Director: Brad Lohner, Priority Credit Recovery, Inc., Edmonton, Canada
• Director: Ronald Stiegel, Euler Hermes Collections North America, Owings Mills, Md.
• Director: Robert Tharnish, ABC – Amega Inc., Buffalo, N.Y.

About IACC

Made up of commercial collection agency, associate, law list and affiliate members, The International Association of Commercial Collectors Inc. (IACC) is the world’s largest international trade association for commercial debt collection professionals. Headquartered in Minneapolis, IACC serves members throughout the United States and in 25 other countries worldwide. Members of IACC recover millions of dollars annually for their clients and provide valuable assistance to credit departments in controlling mounting debts. To learn more, visit the IACC website at http://www.commercialcollector.com.

A United States District Court in Louisiana has determined that a letter from a collection law firm that invites a consumer to consider voluntary repayment, but also includes a requirement that the consumer sign a Consent Judgment, violates the Fair Debt Collection Practices Act (FDCPA). The case is Brandon v. Eaton Group Attorneys, LLC, Case No. 16-13747, 2017 WL 345864 (United States District Court, Eastern District, Louisiana, Jan. 24, 2017).

A copy of the opinion can be found here.

Background

On May 6, 2016, Eaton Group Attorneys, LLC (Eaton), as the representative of National Collegiate Student Loan Trust 2007-1, filed a petition against Dr. Brandon (Brandon) in the 24th Judicial District Court for the Parish of Jefferson.  In its petition, the Student Loan Trust alleged that defendant had defaulted on a debt, and sought $41,115.13, plus accrued interest of $4,998.37, additional interest at the rate of 4% from the date of judgment, and costs.

On or around June 3, 2016, Brandon received a letter from concerning the lawsuit and her alleged debt. The subject line of the letter described it as a “REQUEST FOR PAYMENT ARRANGEMENTS.” 

The letter stated:

If you would like to explore a voluntary repayment plan, then please provide the requested information. The debt will need to be acknowledged through the attached consent judgment. Please return these forms as soon as possible. This is a communication from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose. 

The letter also included a form for Brandon to provide information— including address, social security number, and employer’s contact information—for both Brandon and her spouse.

Attached to the letter was a partially completed consent judgment and a copy of the petition in the Jefferson Parish case. The consent judgment stated:

IT IS ORDERED, ADJUDGED, AND DECREED that judgment be rendered in favor of the Plaintiff, NATIONAL COLLEGIATE LOAN TRUST 2007-1, and against the defendant, CASSANDRA PLUMMER (SSN []), in the full sum of $41,115.13, together with accrued interest of $4,998.37, and additional interest of 4% from date of judgment, and for all costs of these proceedings, subject to a credit of $.00.

The consent judgment had already been signed by a representative of the Eaton Group.

Brandon sued Eaton, alleging that the debt collection letter violated the FDCPA, 15 U.S.C. § 1692, et seq., and the Louisiana Unfair Trade Practice and Consumer Protection Act, LA. Rev. Stat. § 51:1401-18.

In her complaint, Brandon alleges that the letter “was deceptive and misleading as it attempted to trick [her] into signing a consent judgment by promising a voluntary repayment plan.”

The Eaton Group moved for summary judgment, arguing that the letter it sent to Dr. Brandon was non-deceitful as a matter of law. The court denied the motion. 

The Court’s Decision 

The decision was written by the Honorable Sarah S. Vance, United States District Court Judge.  Judge Vance wrote: 

“The Court finds that the letter plaintiff received was misleading because an unsuspecting debtor, seeking only to “explore a voluntary repayment plan,” could be fooled into executing the consent judgment without knowledge of the consequences. Specifically, an unsophisticated debtor may not know that the consent judgment will serve to waive potentially valid defenses and may facilitate a wage garnishment order.

Plaintiff alleges that defendant did not intend to use the consent judgment for a voluntary repayment plan, but rather to enforce involuntary repayment. If a repayment plan is “explore[d],” but no repayment plan is actually agreed to, the debtor is still bound by the acknowledgement and consent judgment. This follows because the letter could be read to mean the debtor is receiving only the right to “explore” an unspecified repayment plan by signing the acknowledgment and consent judgment. Under these circumstances, the debtor has to sign the consent judgment and acknowledge the debt before he even knows the terms of the payment plan to be “explore[d].” Unsophisticated consumers may be unaware that they will have no leverage to negotiate a payment plan because they will be bound by the acknowledgement and consent judgment even if the plan offered is never agreed to. Defendants’ argument that the letter expresses their purpose not to enforce the consent judgment if plaintiff adheres to an agreed payment plan is not supported by the language of the letter.”

insideARM Perspective 

insideARM encourages readers to review the full opinion in this case. In Judge Vance’s discussion she references cases regarding settlement offers on time-barred debt and views the letter in this case as similar. Judge Vance found persuasive the argument that time barred debt letters could fool an unsuspecting debtor into reviving the barred debt—and thereby place the debtor in a worse position; letters containing such offers and no disclosure of the associated risk may be misleading. She felt the letter is this case could have the same impact.

insideARM has previously written about time barred debt settlement offers in the past. See our September 14, 2016 article here.

LAS VEGAS, Nev. — Representatives from FrontLine Group, the business process outsourcing (BPO) subsidiary of Canadian industry-giant CBV Collections Services Ltd., will debut the newly-minted company as they celebrate the twentieth annual DBA International Annual Conference on February 7, 2017.

“We’re here in 2017; CBV has acquired three US national collection agencies,” said FrontLine and CBV President Bob Richards of recent acquisitions. “And we will continue to look for strategic opportunities to grow our business in accounts receivable management.”

FrontLine hung its shingle in the beginning of 2017 at two shared-service centers in Chicago and Tyler, Texas, marking the company’s foray into American markets. FrontLine offers customer experience-oriented First Party and BPO services, backed by CBV’s 96 years of expertise in the receivables industry.

WHO: FrontLine Group
WHAT: CBV introduces its new BPO subsidiary to the US receivables management community
WHEN: February 7, 2017
WHERE: DBA International Annual Conference, Aria Resort and Casino, Las Vegas

FrontLine Group’s goal is to introduce itself while accepting contracts to provide premier BPO and First Paarty services to the American receivables management industry – as CBV has in the Canadian market for nearly a century. For more information on Frontline Group’s receivables management BPO solutions, visit www.flgfrontline.com.

For more information contact:
Ryan O’Hara

rohara@cbvcollections.com

1-855-591-2163

This article previously appeared on Ballard Spahr’s CFPB Monitor and is re-published here with permission.

This past Friday, PHH filed a supplemental response to the CFPB’s petition for en banc rehearing and a response opposing the motion filed by Democratic Attorneys General of 16 states and the District of Columbia to intervene in the PHH appeal.

Supplemental Response.  The D.C. Circuit invited the Solicitor General to file a response to the CFPB’s petition expressing the views of the United States.  After the Department of Justice filed a response, PHH filed a motion for leave to file a supplemental response.  In that motion, PHH asserted that because the DOJ had argued that the D.C. Circuit should grant the CFPB’s petition on several grounds that were not pressed in the CFPB’s petition, PHH was seeking an opportunity to be heard on the views expressed by the United States.  Despite the CFPB’s opposition to PHH’s motion, the D.C. Circuit granted PHH’s motion and required PHH to file its supplemental response by January 27.

In its supplemental response, PHH asserts that the United States did not dispute the panel’s conclusion that the CFPB’s structure is unconstitutional or the panel’s remedy to address the constitutional violation (i.e. severance of the for-cause removal provision) but only challenged the panel’s reasoning in reaching that outcome.  While rejecting the United States’ reading of U.S. Supreme Court precedent with regard to the role of separation of powers in protecting individual liberty, PHH also argues that even under “the United States’ crabbed reading of [such precedent], the panel undoubtedly reached the correct result.”  According to PHH, “the United States identifies no reason for the full Court to grant rehearing simply to retrace the panel’s steps and arrive at the same place.”

PHH also calls “passing strange” the United States’ suggestion for the en banc court to conclude that it should not reach the separation of powers issue under the doctrine of constitutional avoidance while simultaneously arguing that the en banc court should review the panel’s separation of powers analysis.  PHH observes that the “United States cites no examples of an appellate court granting rehearing en banc for the purpose of not reaching an issue.” (emphasis provided).  PHH argues that because the panel properly reached the separation of powers question, the court should reject the United States’ suggestion that the court should grant rehearing on the question but then decline to decide it.

PHH also observes in its supplemental response that the United States did not contest the D.C. Circuit’s RESPA interpretation or its due process holding and instead only addressed its separation of powers holding.  PHH argues that the panel’s RESPA interpretation and due process holding were correct and that “there is no possible basis to rehear either the panel’s RESPA or due-process holdings.” 

Response to Motion to Intervene.  Last week, a motion to intervene was filed with the D.C. Circuit by the Democratic Attorneys General of 16 states and the District of Columbia.  In its response, PHH argues the motion should be denied for reasons that include the following:

• The motion was untimely because federal appellate rules require a motion to intervene to be filed within 30 days after a petition for review is filed and PHH filed its petition for review in June 2015.   The state AGs’ argument that good cause exists to extend the deadline is “implausible” because the results of the presidential election are not relevant to the question of intervention and even if they were relevant, the state AGs did not explain the reason for “their additional two-and-a-half-month [post-election] delay before seeking to intervene.”  In addition, “intervention would be grossly unfair to petitioners, who suddenly would be faced with the burden of litigating any further judicial proceedings against seventeen new (and sovereign) party opponents.”
• The state AGs lack standing to intervene because they have no legally protected interest.  With regard to RESPA, the state AGs’ involvement is not “necessary or appropriate to protect the Executive Branch’s interest in the interpretation and enforcement of RESPA.”  With regard to the CFPB Director’s independence, the state AGs “have no standing to defend the constitutionality of a federal statutory provision that applies only to one federal Officer–the Director of the CFPB.”  The panel’s decision does not, as the state AGs contend, “effectively giv[e] the President veto power over” the state AGs’ attempts to enforce the CFPA under Section 1042 because the CFPA merely requires the state AGs to notify the CFPB of an intended enforcement action before filing and allows the CFPB to intervene.  The state AGs “remain free to pursue their own enforcement actions, and the courts would remain the ultimate arbiters of any disagreements.”  The state AGs also provide no explanation for “their illogical and ultimately speculative contention that a constitutionally accountable CFPB would somehow ‘undermine’ regulatory coordination.  To the contrary, states routinely coordinate with constitutionally accountable federal agencies, such as the Department of Justice.”
• The motion “is simply an effort by the state AGs to intervene in order ‘to file a petition for certiorari,’ as they admit, in the event the Solicitor General does not.”  The state AGs should not be given control over efforts to seek Supreme Court review.  More specifically, granting intervention would circumvent the CFPA provision requiring the CFPB to seek approval from the United State AG to file a certiorari petition–which is “one of the only means that Congress provided the President to supervise litigation involving the CFPB.”

In addition to the state AGs’ motion, two other motions to intervene were filed last week.  One motion was filed by Democratic lawmakers Senator Sherrod Brown and Representative Maxine Waters who are, respectively, the Ranking Members of the Senate Banking Committee and the House Financial Services Committee.  The other motion was filed by Maeve Brown (who chairs the CFPB’s Consumer Advisory Board), Americans for Financial Reform, Center for Responsible Lending, Leadership Conference on Civil and Human Rights, Self-Help Credit Union, and United States Public Interest Research Group.  In a footnote to its response, PHH states that it “will promptly and separately respond to those motions.”

FRANKFORT, Ky. – Gov. Matt Bevin announced yesterday that Diversified Consultants Inc. (DCI), a collection services company servicing major-name telecom clients, will locate a new operation in Louisville with a $6.65 million investment expected to create 433 jobs.

“DCI’s commitment to exceptional service makes it a great fit for Kentucky,” said Gov. Bevin. “Their high standard of customer care will make them a terrific partner for the commonwealth’s dedicated workforce. We welcome DCI to Kentucky and look forward to seeing both their client base and workforce grow in the years ahead.”

DCI will lease 40,000 square feet of a 60,000 square-foot building currently occupied by the downsizing Vantiv Call Center in the Commerce Crossings business park. The new DCI office will not only employ customer service agents but office-support staff including Human Resources, Quality Assurance, Administration, Compliance and other functions. Gordon Beck, DCI’s Chief Operating Officer and a Louisville native, said he plans to quickly fill all available positions.

Buildout of the space could begin in late February and Beck said he aims to open the new office by April 1. His Kentucky roots and confidence in the local workforce played into the decision to open the new office.

“Ours is an industry that too often gets a negative reputation. DCI is changing that in how we treat our customers and through our own company culture. We got to the top of our industry by being nice. We focus on the customer experience and are legal, moral and ethical,” Beck said. “The reason we’re opening this office in Louisville is our company is looking to expand its customer base and we know we can recruit the kind of employees who want to be a part of our company.”

Founded in 1992 in Jacksonville, Fla., DCI is a family owned telecom collection services company. Charlotte Zehnder has acted as the company’s CEO since 2010, and the company is a certified member of the Women’s Business Enterprise National Council as a woman-owned business. DCI has quadrupled in size since 2009, currently employing 930 people across three locations in Jacksonville, as well as operations in Portland, Ore. and in the Philippines. Of those, 835 employees are located in the U.S.

Louisville Mayor Greg Fischer said the company’s new location and jobs will add further momentum to the city’s economy.

“Louisville’s economy continues to thrive with the addition of a new business services company in south central Louisville. As we usher in a new year, we are proud to welcome DCI to our community,” said Mayor Fischer. “We are especially excited to welcome home COO Gordon Beck, Louisville native and graduate of Fern Creek High School.”

Sen. Dan “Malano” Seum, of Louisville, described the announcement significant for the community.

“I am pleased to welcome DCI to Louisville,” Sen. Seum said. “It’s a great day for Kentucky when a company with ties to the commonwealth and the city of Louisville plans to bring more jobs to our state. I look forward to DCI’s success and wish them the best in future endeavors.”

Rep. Jeffery Donohue, of Louisville, said DCI is the type of business the community continuously looks to add.

“Economic development is vital to the future of Louisville, and I am pleased to see that companies like Diversified Consultants Inc. are selecting our city as a place to grow their operations,” Rep. Donohue said. “Investments like these will guarantee Louisville remains a great place to work, live and raise a family in the years to come. I look forward to a long-term partnership with DCI.”

To encourage the investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) in January preliminarily approved the company for tax incentives up to $1 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the agreement term through corporate income tax credits and wage assessments by meeting job and investment targets. 

In addition, DCI can receive resources from the Kentucky Skills Network. Through the Kentucky Skills Network, companies can receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives. In fiscal 2016, the Kentucky Skills Network provided training for nearly 95,000 Kentuckians and 5,000 companies from a variety of industry sectors.

For more information on DCI, visit www.DCIcollect.com.

A detailed community profile for Jefferson County can be viewed at http://bit.ly/LouisvilleJeffersonCo.

Information on Kentucky’s economic development efforts and programs is available at www.ThinkKentucky.com. Fans of the Cabinet for Economic Development can also join the discussion on Facebook or follow on Twitter. Watch the Cabinet’s “This is My Kentucky” video on YouTube.