Yesterday I attended the Midwest Compliance Symposium, a
training conference for creditors, hosted by Delta Outsource Group and CBE
Companies. One of the sessions featured a “fireside chat” (sans the fire) with
John Bedard and Sergei Lemberg, of Lemberg Law, a consumer attorney. Here’s what was said, expressed in excerpts
(not 100% verbatim), in a Q and A format.

Bedard: How do you find your clients?

Lemberg: I spend
approximately $50,000 per month on online advertising to buy keywords
(including terms such as debt attorney and harassing phone call).

Bedard: Do you advertise using the names of debt collectors?

Lemberg: I used
to, but I stopped buying pay-per-click ads using names of debt collectors a few
years ago. I just didn’t like the vibe of it. I still also use videos, and we
have an app, though it’s less successful than I had hoped – we still have about
25,000 members.

Bedard: Do you actually talk with the clients you represent?

Lemberg: Yes,
several humans talk with the consumers we represent. We have a multi-step
process that includes 1) intake with a paralegal, 2) online sign up, 3) talk
with an intake supervisor, 4) talk with a litigation paralegal, 5) speak with
an attorney (or maybe just communicate by email, if I don’t need further
clarity – but I give my attorneys leeway to make their own decisions about
this).

We also ask for screenshots or a voicemail recording of
calls, as well as certainty about revocation, if that is involved.

Bedard: How many of your cases end up in law suits, and can you tell us
about how you proceed?

Lemberg: We send
demand letters first. About 25% end up in law suits.

Some simply ignore the letters.

Sometimes there is a disagreement – a consumer says x
happened; defendant says y happened. Those cases will get filed as long as the
plaintiff is believable.

Sometimes the company won’t share call recordings; sometimes
they do. If the evidence rebuts our client’s claim, the case is dropped. If the
evidence rebuts the claim, but we notice another actionable claim, we will send
a new demand based on that claim.

People come to us because they are pissed or don’t know
where to turn. That’s about 95%. Some are “case fishers”… you can tell who
those are. I don’t want those cases.

Bedard: How many
demands/law suits do you file?

Lemberg: We file
about 250 pre-suit demands per month, and about 50-60 lawsuits per month. About
65% of the time cases are settled.

Bedard: How do you determine what amount to demand?

Lemberg: No
defendant will settle a case for 100 cents on the dollar. So we try to find a
middle ground that’s reasonable and appropriate but doesn’t make defendants
want to run to court.

Bedard: How do you charge your clients?

Lemberg: We don’t
earn anything unless we win. We eat what we kill.

Bedard: What happens to your expenses when you lose a case?

Lemberg: We write
off expenses when we don’t win. Clients are not out of pocket – except when
they have been deceptive – then we will bill them.

Bedard: Do you tell people not to pay their debts?

Lemberg: I don’t
get involved in the debt… unless I am hired to represent someone on a debt
collection matter. There are just too many variables.

Bedard: Do you encourage people to complain to the government?

Lemberg: No, we
don’t encourage people to file complaints.

Bedard: Do you have relationships with Attorneys General or other
authorities?

Lemberg: There was
a time when we had a relationship (a brief 6 month stint) with an app called
PrivacyStar. I think they sent complaints directly to the CFPB or FCC. But not
any longer.

Bedard: What effect will proposed rules have on the industry and your
business?

Lemberg: I don’t
know, folks. I’m just sitting here enjoying the here and now. I really don’t
know what will happen.

Bedard: Do you file claims in “grey” areas?

Lemberg: I kind
of like uncertainty because it allows for banks and collectors to do what they
want to do, and it allows us to do what we want to do.

Bedard: What would you do if you weren’t a consumer lawyer?

Lemberg: I don’t
know… I’d take photographs… pick vegetables… I’d develop hobbies.

Bedard: What do you like least about being a consumer lawyer?

Lemberg: Here’s
an example – yesterday I drove two hours each way to a hearing for a case. It
didn’t go my client’s way and they were very upset. I don’t like the often
thankless, entitled segment. People expect things you can’t always deliver and
they don’t appreciate what you do for them.

Bedard: The CFPB boasts about how much they recover for consumers. How
much have you recovered?

Lemberg: I’m really
not sure… I’m guessing $15 million. I think the CFPB boasting is a bunch of
*&#$. They get hundreds of thousands of complaints. If they gave those to
me, I’d get action and recover money for those people.

Bedard: How do folks beat you?

Lemberg: I think
smart lawyers find opportunities to make a point, but you can’t be aggressive
in all cases. Find the right jurisdiction and the right judge, and make a point
with that judge… because they’ve been before that judge and know what will
appeal to them. It’s not a replicatable strategy, but it’s effective.

Bedard: Have you thought about defending creditors?

Lemberg: Yeah, in
retirement. I like what I do, but I’m not politically attached to it.

Bedard: Is there anyone you won’t sue?

Lemberg: No. I’m
an equal opportunity “suist.” I take particular delight in suing a defendant
where the attorney is clearly trying so hard to make a point, thinking I won’t
ever try to sue them again. Well, I will, and here it is.

Bedard: What advice would you offer to collectors?

Lemberg: Don’t
piss people off. When you’ve reached the wrong person, apologize, stop,
document the call, and make sure you take responsibility for going to your
supervisor and get the number removed from the dialer.

This article previously
appeared on the Burr Foreman blog and is re-published here with permission.
Katherine West also contributed to this article.

Katherine West also
contributed to this article.

In Kuntz v.
Rodenburg LLP, No. 15-2777, – F.3d –, 2016 WL 5219884 (8th Cir. Sept. 22,
2016), the Eighth Circuit held that a law firm hired to collect a debt did not
violate § 1692b(3) of the Fair Debt Collection Practices Act (“FDCPA”) when it
made multiple calls to a third party to obtain information about the debtor.[1] Section 1692b(3) prohibits debt
collectors from communicating more than once with a person other than the
debtor (“third party”) in order to obtain information about the debtor’s
location unless the third party requests to be contacted or the debt collector
“reasonably believes that the earlier response . . . is
erroneous or incomplete and that such person now has correct or complete
information.” 15 U.S.C. § 1692b(3). The Eighth Circuit determined that the
law firm reasonably believed its first conversation with the third party was
incomplete and, therefore, did not violate § 1692b(3) by calling the third
party two additional times.

Kuntz filed a lawsuit
against Rodenburg LLP (“Rodenburg”) alleging that Rodenburg violated the FDCPA
by calling him in connection with his daughter’s credit card debt. See
Kuntz, 2016 WL 5219884, at *1. Specifically, Kuntz asserted that Rodenburg
violated the FDCPA by calling him more than once to obtain location information
about his daughter and calling numerous times to harass him. See id. In
fact, Rodenburg had autodialed Kuntz’s landline number twelve times between
December 18, 2013 and January 20, 2014 with no response. See id. When
Kuntz returned Rodenburg’s call on January 20, 2014, the law firm asked if
Kuntz had a contact number for his daughter to which Kuntz responded “Ah, let
me call her and find out what she’s been getting.” Id. Rodenburg
made two subsequent phone calls to Kuntz. See id. Kuntz
claimed that the two subsequent calls violated § 1692b(3). See
generally id.

The Eighth Circuit held
that Rodenburg did not violate § 1692b(3). The Court explained that the first
twelve calls to Kuntz “were not ‘communications’ because ‘they did not convey
that Rodenburg was calling about the debt.’” Id. at *2
(quoting Zortman v. J.C. Cristensen & Assocs., 870 F. Supp. 2d
694, 704–05 (D. Minn. 2012). Kuntz did not disagree with the Court’s assessment
of the first twelve calls. See id. Instead, Kuntz argued that
the calls that occurred after the January 20, 2014 conversation violated
§ 1692b(3). See generally id. Kuntz argued that the
January 20, 2014 conversation was the one conversation permitted by
§ 1692b(3) and, therefore, the two calls made after the January 20, 2014
conversation violated § 1692b(3). The Eighth Circuit, however, found that the
two post-January 20, 2014 calls did not violate § 1692b(3) because
Rodenburg reasonably believed that the information provided on January 20, 2014
was incomplete and that “Kuntz had or could obtain location information about
his daughter.” Id. The Court explained that during the January
20, 2014 conversation, “Kuntz did not refuse to provide location information or
state that he could not provide it. He did not even say that [his daughter]
could not be reached at the number Rodenburg autodialed.” Id. at
*2. Thus, the Court determined that “it was objectively reasonable for
Rodenburg to believe that . . . Kuntz had or could obtain
location information about his daughter . . . permitting a
follow-up call to learn if he had acquired or was now willing to provide [the
information].” Id.The Eighth Circuit’s decision thus indicates that
debt collectors may make more than one call to a third party to obtain
information about a debtor provided the third party has not expressly indicated
that no such information is available and the debt collector reasonably
believes that the third party possessed or could obtain such information.

[1] The Court also held that the debt
collection firm did not violate § 1692d(5) because the firm’s fourteen
calls between December 19, 2013 and January 27, 2014 “did not rise to the level
of harassment as a matter of law.” See Kuntz, 2016 WL 5219884, at
*3.

 

Yesterday, the
IRS announced that it plans to begin private collection of certain overdue
federal tax debts next spring and has selected four contractors to implement
the new program. The complete press release can be found here.

The new program, authorized
under a federal law enacted by Congress last December, enables designated contractors to collect,
on the government’s behalf, outstanding inactive tax receivables.

As a condition of receiving a contract, the agencies
selected must respect taxpayer rights including, among other things, abiding by
the consumer protection provisions of the Fair Debt Collection Practices Act. The
IRS has selected the following contractors to carry out this program: CBE Group (Cedar Falls, Iowa), ConServe (Fairport, N.Y.), Performant (Livermore, Calif.) and Pioneer (Horseheads, N.Y.).

insideARM Perspective

The issue of use pf private collection agencies has been
highly controversial. We wrote about the issues in a story published on July 15, 2015. That story was
written in response to a Huffington Post
article published the prior week that we felt distorted the facts surrounding
the issue.

This will be the third attempt by the IRS to make this
program work.  The earlier attempts were
in 1996 and 2006. As noted in the July 15, 2015 article, reports about the
prior “failed” attempts have often
been factually inaccurate. See also an excellent insideARM
article written by Patrick Lunsford on October 27, 2010 about
the problems with the decision to end the second attempt in 2010.

Industry experts contacted by insideARM are hopeful that
this program will be different. The feeling is that current IRS leadership is
more likely to do the things necessary to make the new program successful.

The press release addresses 3 key issues and offers
explanation to support the new program.

Types of Accounts

“These private collection agencies
will work on accounts where taxpayers owe money, but the IRS is no longer
actively working their accounts. Several factors contribute to the IRS
assigning these accounts to private collection agencies, including older,
overdue tax accounts or lack of resources preventing the IRS from working the
cases.”

This statement clearly justifies the use of private
collection agencies. The private collection agencies are not taking work away from IRS employees. Rather, the
private agencies will be working on accounts that IRS agents are not currently working.

Notices to Taxpayers
– Need to Avoid Taxpayer Confusion

“The IRS will give each taxpayer
and their representative written notice that their account is being transferred
to a private collection agency. The agency will then send a second, separate
letter to the taxpayer and their representative confirming this transfer.

Private
collection agencies will be able to identify themselves as contractors of the
IRS collecting taxes. Employees of these collection agencies must follow the
provisions of the Fair Debt Collection Practices Act and must be courteous and
respect taxpayer rights.

The IRS will do
everything it can to help taxpayers avoid confusion and understand their rights
and tax responsibilities, particularly in light of continual phone scams where
callers impersonate IRS agents and request immediate payment.

Private collection agencies will not ask
for payment on a prepaid debit card. Taxpayers will be informed about
electronic payment options for taxpayers on IRS.gov/Pay Your Tax Bill. Payment
by check should be payable to the U.S. Treasury and sent directly to IRS, not
the private collection agency.”

These items are very important. Taxpayers need to know and will
know that the private collection agencies have authority to work the accounts
and that collection efforts are legitimate and not part of some criminal scam.
We are also certain that there will be significant additional details that will
be developed between now and the Spring of 2017 to create policies, procedures
and methodology to assure taxpayers that the private debt collector efforts are
legitimate.

Finally, the entire ARM industry should be watching this
program intently and hoping for success and no negative publicity.  If the program is successful, there is a
likelihood the program could be expanded in the future. That would create
opportunities for other ARM companies.

Congratulations and good luck to the selected companies.

Visitors to www.insidearm.com today will experience a fresh, sleek design, and the same comprehensive and reliable information users have come to expect from the most trusted industry news site. 

Thanks to Herculean efforts by Jeffrey Hearn, Web Developer at insideARM, the new site was launched this morning, 27 September, and we’ve already received positive feedback about the changes. “Very nice,”  one reader wrote. “I went there today and thought – Am I in the same place?  Is this the same company? Looks very good!  Clean and well organized.”

What You Can Expect

• Improved Site Search – We’re working to make searching our archives easier, with the ability to isolate a date range you’re interested in and also provide editor-curated results for the most-popular search terms (in the near future).
• More Cohesive Look and Feel – We’ve used a popular user interface toolkit so that buttons, links, and text are easier to see and interact with. This also means that articles will look great in print or on your phone.
• Speed – No one wants to wait around for pages to load, so we made performance a priority. Now our most-viewed content will load instantly.
• New Branding – You may have seen our new logo crop up on webinars or in our downloadable products, but now we have a fresh new logo to go with our new website.
• A More-Capable Platform – We’ve had many ideas for new types of content to bring our audience, but haven’t had a platform to realize them on — until now. Stay tuned for more features in the coming months.

We’ve also made improvements to our FDCPA and TCPA resources pages so that they are now easily printable, with formatting that looks great on paper or on the screen.

We’d love to hear from all of our readers about what they think of the revamped insideARM — what is working for you, and what is tripping you up. You can email all of us at editor@insideARM.com.

A new study from the Healthcare Financial Management
Association (HFMA) – “Self Pay and the Benefits of Prospective PatientEngagement” – finds that more patients are paying healthcare providers
themselves. The study shows that self-pay has “increased by 10 percent during
the last five years,” as high-deductible health plans (HDHPs) have become more
common. 

HFMA highlights the following findings from the study’s respondents:

• Patient
  payment is rising, with hospitals seeing a 10% increase in self-pay dollars
  during the past five years.
• More
  hospitals have mandatory pre- or point-of-service collections processes for
  outpatient services, with that number rising from 9% of hospitals in 2009 to
  32% in 2015.
• About
  20% of respondents indicated “high capabilities for pricing and patient
  education related to billing and administrative expectations,” showing there’s
  plenty of room for hospitals to educate patients more about this topic.
• About
  17% of respondents indicated “high capabilities for pre-service automation,
  forecasting, and prioritizing financially eligible patient accounts.”
• When
  it comes to engaging patients about paying for their health care, respondents
  rated pre-service pricing as the most important priority.
• When
  it comes to engaging patients about paying for their health care, respondents
  rated pre-service pricing as the most important priority.

In addition to highlighting the impact of changing self-pay
practices on healthcare providers, the HFMA study also notes that the recent rise
of high-deductible health plans (HDHPs) makes payment more challenging for some
patients. The study highlights that 25% of adults with health insurance still aren’t
sure if they can afford to pay for major medical expenses. This is especially
true for adults with HDHPs, and such individuals are “more likely to think about
costs when making healthcare decisions” and “are especially likely to worry
about the effects of healthcare costs of personal finances.”

The concern about patients having the ability to
pay their medical expenses affects healthcare providers as well. HFMA points
out that “Medicaid expansion, HDHP trends, and healthcare provider
organizations’ adoption of improved charity care identification processes and
pre- and point-of-care financial discussions are likely to impact future trends
in bad debt,” and that today “the rate of bad debt is increasing at well over
30% per year” in some hospitals.

insideARM Perspective

This HFMA study points various ways that the relationship
between patients and their medical expenses is changing due to the increased
prevalence of HDHPs. Communicating with patients is key – both about the
expenses associated with a medical procedure and the expectations about how and
when patients should pay for their care.

HFMA also included numerous instructive “Focus
Areas for Self-Pay Process Improvement” that healthcare providers should
consider when determining their self-pay policies and procedures, such as:

• Use
  patient-friendly communications and consistent messaging.
• Give
  patients access to payment estimates at or before time of care.
• Engage
  with patients early about issues and options when it comes to paying the bill.
• Ensure
  patients have access to financial counseling.
• Learn,
  benchmark, and share best practices.

JACKSONVILLE, Fla. — Stellar Recovery Inc. is
proud to announce that our Chief Information Officer, Joe Tenga, has been named
the Jacksonville Business Journal’s BizTech Innovation Awards Best CIO. Joe
Tenga is an IT professional with over 25 years of diverse business and technical
experience in numerous industries including Healthcare, Payment Processing, and
IT Management consulting.  As Chief
Information Officer of Stellar Recovery he has been integral in streamlining and
revolutionizing many of the technical processes that have better positioned
Stellar Recovery within the industry. These changes have enabled Stellar to engage
consumers to settle their debt quickly and fairly through multiple digital
channels such as Stellar’s newly revamped Payment Portal and IVR, as well as
corporate desktop and mobile websites. 

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Joe’s undertakings have
greatly helped Stellar’s bottom line by reducing IT operating expenses. By
automating file processing, Joe recaptured wasted time and money spent on
manual data file exchanges with clients and vendors.  Implementation of a new Hosted VoiP solution
realized savings of over $50k per year, while simultaneously delivering
significant Unified Communications capabilities to the enterprise. 

Joe’s focus extends
beyond the IT organization, as he also worked to eliminate excessive email
communications that were costing the enterprise an estimated $170K per year in
wasted time.  Most recently, Joe commissioned a secure, cloud-based PDF
and Audio Archive application that will deliver self-service capabilities to
both Stellar Recovery staff and clients, while saving approximately $50K per
year on archive fees.  

Joe Tenga is determined
to make Stellar Recovery an industry leader by leveraging advanced technology.
His passion for IT is an inspiration to the team that he leads and to the
organization that values his professionalism and leadership.

Stellar Recovery, Inc.
is located in Jacksonville, FL. Please visit the new mobile website at www.stellarrecoveryinc.com

CEDAR FALLS, Iowa – A pair of CBE Companies (CBE) leaders will deliver key presentations at the Midwest Compliance Symposium Sept. 26 -28 in St. Louis.

CBE is co-hosting the Midwest Compliance Symposium for all professionals and credit originators of Financial, Telecommunications, Healthcare, Utility and Television industries.

Mike Frost, CBE Chief Compliance, Sales Officer and General Counsel, will be joined by Attorney Dale Golden of Golden Scaz Gagain, PPLC in presenting the impact of CBE’s recent Telephone Consumer Protection Act (TCPA) court victory and its impact on the credit and collections industry. In Strauss v. CBE, the court confirmed CBE’s Manual Clicker Application does not constitute an automatic telephone dialing system, therefore mitigating the expensive regulatory risk the TCPA poses for calling consumers’ cell phones.

Frost is a leader in the collection industry, frequently delivering presentations on compliance issues at industry events across the nation. In 2011 and 2012, Frost was named among the Top 25 Most Influential Collection Professionals by Collection Advisor. In 2014 he was named to the Who’s Who in Collections by the same magazine. Frost is a member of the ACA International Board of Directors and was awarded the 2014 Members’ Attorney Program designation. In 2015 Frost served on a panel for the Federal Trade Commission Debt Collection Dialogue.

Dan Rohrs, CBE Director, Compliance Officer and Counsel, will be joined by David Kaminski of Carlson & Messer LLP in presenting on the Fair Credit Reporting Act (FCRA) and recent litigation and regulatory actions. They will provide guidance to stay in compliance with the FCRA rules.

Rohrs manages and oversees all of CBE’s quality assurance and compliance activities and personnel. His responsibilities include participating in the definition and development of corporate policies, procedures and programs, ensuring regulatory principles are embedded within all respective business functions and overseeing the continuous development of CBE’s compliance management system.

About CBE Companies

Founded in 1933, CBE Companies is a global provider of outsourced call center services focused on connecting people to solutions. The company specializes in receivables management and customer care services. This narrow focus has enabled the company to be an expert in every aspect of the business. From a one-of-a-kind culture immersion approach to a proven ramp process, CBE’s focused expertise saves its partners money and enables them to focus on their core business.

CBE approaches every business relationship as a strategic partnership. The company shares in its partners’ successes and failures and strives to create more of the former and less of the latter. CBE firmly believes transparency and communication are the cornerstones in the foundation for success. The company’s approach to a strategic partnership begins with open communication; this assures CBE partners that the team handling their business is committed to delivering customer insights, ideas and new ways to accomplish goals.

With more than 1,300 people in six locations globally, CBE Companies can deliver the right solution in the right location(s) for your ever-changing business needs. Its corporate headquarters is located in Cedar Falls, Iowa, with two facilities in Waterloo, Iowa, and additional facilities in Overland Park, Kansas; New Braunfels, Texas and Manila, Philippines. The organization is consistently recognized as a local Employer of Choice. It has also been recognized by Workplace Dynamics as one of Iowa’s Top Workplaces. For more information about CBE Companies, please visit www.cbecompanies.com or call 888-386-0273.

CBE Companies Press Kit