Archive for the ‘News’ Category

In Spite of FCC, 70 Percent of TCPA Decisions in Last 14 Months Positive for Industry

Wednesday, February 24th, 2016

via ACA–

BBB Report: Complaints About Debt Collectors Continue to Decline

A majority of collection agencies also continue to respond to consumers’ complaints in a timely manner.

The total number of complaints filed by consumers about businesses such as telephone service providers, auto dealers and collection agencies declined in 2015, according to a report with preliminary data from the Connecticut Better Business Bureau released this week.

Consumers filed 19,803 complaints about collection agencies last year, down from 21,603 complaints in 2014, according to the Connecticut BBB report. The top 10 types of businesses consumers file complaints about remains consistent, and collection agencies ranked fifth last year and in 2014.

The most recent national data from the Council of Better Business Bureaus also shows complaints about debt collectors are decreasing and debt collectors still outrank other industries in complaint resolution, ACA International previously reported.

The Council of Better Business Bureaus data from 2014, released in September 2015, shows that debt collectors have dropped to fifth place among the most complained-about service providers by consumers. The BBB’s 2014 Complaint and Inquiry Statistics also show a dramatic decrease in the number of complaints against debt collectors.

According to the national Council for Better Business Bureaus’ data, debt collectors received 21,576 consumer complaints in 2014. Consumers complained more about cellular telephone service and supplies; telephone communications; television – cable, CATV and satellite; and auto dealers – new cars.

The preliminary 2015 data from the Connecticut BBB mirrors the national findings from 2014. Cellular telephone services and supplies ranked first in the number of complaints with 35,871 in 2015 followed by telephone communications with 28,279 complaints, according to the report.

Collection agencies also ranked fourth among businesses that consumers make inquiries about to the BBB, according to the Connecticut report. Approximately 3.2 million consumers made inquiries on collection agencies in 2014 and 2015, it states.

“Statistically, we see that consumers who do their research through [the] Better Business Bureau before signing a contract tend to be less likely to file a complaint,” said Connecticut Better Business Bureau spokesman Howard Schwartz.

According to WebRecon’s latest Debt Collection Litigation and CFPB Complaint Statistics report released Feb. 15, year-over-year debt collection complaints filed with the CFPB declined 17.6 percent from 3,282 in January 2015 to 2,705 in January 2016.

Of the 2,705 complaints filed in January, collection agencies responded to 91 percent (2,455) in a timely manner, ACA reported.

From Collector: The Ingredients of a Successful Call Opening

Tuesday, February 2nd, 2016

ACA International — Keep the conversation friendly and positive when talking with consumers.

In the January edition of Collector magazine, editor Anne Rosso May reports on how to execute a successful call with a consumer by creating a balance between a friendly conversation and adhering to strict compliance requirements.

It can be a tricky balance for collectors to be friendly and engaging while meeting those requirements from the very minute the consumer picks up the phone, but there are several tips to help.

For starters, the beginning of the call should be more customer service than collections. Before you disclose why you are calling, make sure you are talking to the right person, Rosso May reports.

It may require the last four digits of a consumer’s Social Security number or verification through their address or date of birth. Of course, in light of all the identity theft scams perpetuated today, some consumers may be reluctant to give out personal information to a stranger on the phone.

If a consumer sounds anxious when he gives you his verification information, calmly reassure him by saying, “Thank you for that information. I know you can appreciate that we want to keep your information safe,” Rosso May reports.

If the consumer doesn’t want to give you the information at all, don’t get into a tug of war about it. Keep the conversation friendly and positive—just thank the consumer for his time and move on. It may turn out that he feels more comfortable calling your agency directly.

From there, initial communication with a consumer must include the mini-Miranda statement required by the Fair Debt Collection Practices Act. It must be stated during a call with a consumer regardless of who initiated the call or how often you have spoken.

In addition to legal and compliance requirements, it’s important to earn consumers’ trust. It may feel awkward to ask consumers personal questions, but don’t let that awkwardness make you sound stiff or robotic in your introduction, Rosso May reports.

Before the call, practice delivering the mandated verbal disclosures with ease. Try, “I’d like to tell you about some legal rights you have.” Clunky segues, such as “I’m legally required to tell you this,” can ruin the flow of the call and disrupt the rapport you’re trying to build with the consumer.

Finally, having good manners can take you far—remember to say please and thank you. People love the sound of their own name, but don’t get familiar too quickly. You should always address the consumer with a courtesy title, such as Mr. Smith. If the consumer says, “You can call me Mike,” it might be nice to respond, “Thank you Mike. You can call me Amy.”

ACA has many helpful resources for members through ACA SearchPoint. Information on communicating with consumers is available by visiting the ACA SearchPoint website and clicking on the Collection Calls tab. ACA members must be logged on to the website to access ACA SearchPoint documents.

The complete digital editions of Collector magazine are available through ACA International’s website. ACA International will publish weekly excerpts from Collector articles, when available; check your inbox for the excerpts in ACA Daily on Wednesdays.

Follow ACA on Twitter @ACAIntl and @acacollector or Facebook for news and event updates. ACA’s LinkedIn Group includes news updates, member discussions, event promotions, jobs and more. Visit the group page and request to join today.

Federal Hearing Scheduled in Case Challenging CFPB Authority

Monday, January 25th, 2016

Stephanie Eidelman —

The case of mortgage lender PHH Corporation v. CFPB has moved to the D.C. federal appeals court, with a hearing scheduled for April 12, the Wall Street Journal reported over the weekend. Although this is not an ARM-related case, it does involve a significant challenge to the CFPB’s rule enforcement powers, which makes it very relevant to the industry.

The case began with a 2014 enforcement action against PHH. The company appealed the decision, accusing the CFPB of overly aggressive interpretation of the rules. CFPB Director Richard Cordray responded to the charges, but did not back down; in fact, he imposed a more significant fine than the one recommended by the administrative law judge in the case.

While many have publicly complained about Cordray’s wide interpretation of his agency’s scope of authority, the PHH lawsuit is the first serious challenge. A loss in court would bolster the many calls from industry groups and conservative lawmakers for a change in the bureau’s leadership structure.

Cordray has dismissed a host of criticism to date, including claims of human resource discrimination, wild budget overruns, consumer complaint portal errors, massive data collection initiatives, involvement in Operation Choke Point, and more.

Last December he challenged American Banker’s reporting on the CFPB complaint database, stipulating that there are some errors, but that those instances represent a comparatively small percentage of the number of records handled.

Many have pointed out the irony that the CFPB is holding industry to a standard that it apparently cannot meet itself.

9 Things That Surprisingly Won’t Affect Your Credit

Monday, January 18th, 2016

Lauren Gensler, Forbes Staff —

There is a lot that goes onto your credit report — it’s a veritable report card on your financial life, if you will.

Your history of paying loans, whether or not you max out your credit card and how long you’ve had different accounts, plus a myriad of other details relating to your financial history are on your report and can affect your credit score and access to credit.

But there are a lot of other things that have traditionally not made their way onto your credit report, even though you might have assumed (or hoped) they did. Responsible practices like always paying your rent on time basically go unrecognized. On the flip side, there’s some negative information that you might think could harm your credit but actually has no bearing on it.

There’s a push right now to consider more types of information (such as utility and cable bill payments) when calculating credit scores as a way to bring into the fold more people who have little to no traditional credit history. For instance, Fair Isaac Co, which calculates the FICO score that is used in some 90% of consumer lending decisions, is currently testing an alternative score that would make millions more people creditworthy.

Alternative lenders (like Earnest, Upstart and Pave) are also proliferating, which take tons more information into consideration when evaluating a potential borrower.

So what’s left out of the traditional credit score equation? Here are some of the more surprising things:

1. How much money you make. Nowhere on your credit report will you find your salary. Nor does a high salary mean you have a good credit score or a low salary mean your credit score is in the toilet.

Still, your income can indirectly impact your access to credit and your credit score.

For instance, a credit card provider will ask you for your income. Then they’ll use it in conjunction with your credit report to decide whether or not to give you a card and what the terms are going to be. A higher income in relation to your debts might get you a higher credit limit, since the bank figures you’re more likely to be able to repay what you spend.

With a higher income, you’re also more likely to have an easier time keeping your financial house in order. By having sufficient income to always pay your credit cards and loans on time, for instance, you’re helping your credit score.

2. Your net worth. It doesn’t matter if you have an outsized savings account and investment portfolio, the keys to a million-dollar mansion in the country and a 50-foot yacht. It does matter if you took out loans to bankroll a lavish lifestyle and had a spotty track record of making payments.

3. An Ivy League degree (or lack thereof). There is no place on your credit report where you’ll find your alma mater, no matter how prestigious. You will find your employer’s name, but that doesn’t get factored into your credit score, either. (These things do, however, matter to some of those alternative lenders.)

4. Your debit card. When you use a debit card or prepaid card, your activity is not reported to the credit bureaus and therefore is not helping to build your credit. Checks and cash don’t count, either. Only by signing up for a credit card and proving that you can use it responsibly will you improve your credit score simply by paying for things.

Debit cards “may look and feel like a credit card and you can use it in a similar way, but that’s where the similarities end,” says Bruce McClary at the National Foundation for Credit Counseling. This is because you’re using money you already have. For some, this is intentional and a means to keep spending in check and avoid falling into debt. Still, to build your credit score, you need to demonstrate you can responsibly handle credit that is extended to you, for example, through a credit card.

5. Paying rent and other bills on time. If you’re paying your landlord on time every month and long ago automated your cellphone, utilities, and cable/internet bills to ensure on-time payments, congratulations. You’re being financially responsible. However, it’s not helping your credit.

“The biggest assumption I think people make in what benefits their credit is rent and utilities, although neither one of them shows up on their credit report,” says Ken Chaplin, an executive at credit bureau TransUnion.

“The reality is that these accounts are invisible while you’re doing the right thing and paying on time each month,” says McClary. “It’s when things go off the rails, suddenly you’re going to see the impact.”

When you stop making payments, what happens is that the unpaid bills go into collections. This information then gets routed onto your credit report. Don’t be fooled into thinking the moment you pay off the collections the blemish will disappear from your report, either. Collections cases typically remain on your report for seven years, lowering your score and acting as a red flag to future lenders.

6. Receiving welfare. Getting government assistance — like receiving food stamps or being on disability — has no bearing on your credit and won’t show up on your report.

7. Not paying Uncle Sam on time. Paying your taxes late won’t immediately result in any damage to your credit.

But once the IRS reports you as delinquent and imposes a tax lien, you’re in trouble. “That can be devastating…that’s debt you can’t get away from. They’re going to follow you until you pay it off,” says McClary, who says a tax lien can take a “serious toll” on your credit score.

8. Going to jail. If you get sent to the slammer, your credit score will remain intact.

Still, while your criminal record is typically ignored, civil judgments can and do appear on your credit report. This includes everything from bankruptcies and tax liens to monetary judgments and overdue child support payments in some states.

“If you shoot somebody and go to prison, the fact you committed murder and were found guilty won’t show up,” says McClary. “But if the family of that person turned around and sued you for damages, that would show up.”

His best advice: Pay off these debts quickly. Even if you cough up the cash the very day you’re in court, it will still show up on your report. But generally this type of information is removed after seven years if it’s paid. If it’s not paid, it could linger for much longer. Plus, in some states, your wages could be garnished if you don’t come forward with what you owe.

9. Checking your credit report. Repeat after me: Checking your credit report has no impact on your credit score whatsoever.

An inquiry made by you (known as a “soft inquiry”) doesn’t get factored into your credit score. Neither do other soft inquiries, like those that generate the ”pre-approved” credit card offers you get in the mail.

It’s a common misconception that they do. The truth is, your score is impacted only when a lender checks up on you at your direction, making what is called a “hard inquiry.” This happens when you apply for credit, like a mortgage, a car loan or a credit card. Even so, the damage is “very, very minor,” says Chaplin, and will disappear off your reports altogether after three months or so.

What’s important to remember about your credit score is the very purpose of it, which is to give potential lenders a sense of your risk level as a potential borrower. For this reason, your credit report deals only with scenarios in which you owe money and your track record of paying that money back.

The information that lands on your credit reports — you have one from each of the three big credit bureaus, TransUnion, Experian and Equifax is used to calculate your all-important credit score. This is the three digit number that determines not only your ability to take out credit cards and loans, but also the interest rates you’re offered. It can even impact whether you get a job or an apartment.

10 Things You Absolutely Need To Know About Your Credit

Wednesday, January 13th, 2016

Lauren Gensler, Forbes Staff –

After graduating from school, your credit score is probably the only grade you’re given that you care about deeply. Except this time it’s for your financial life. The three digit number is telling of how well (or how poorly) you’ve done with credit. Like academic grades, it’s also a big deal for your future.

Here are ten things that are crucial to know about building and keeping a good credit score:

1. Your credit score can determine whether you get a loan. Banks and lenders look at your credit score when they are deciding to approve you for a loan or not, whether it’s for a car, a home or personal use. It’s also a factor when you apply for a credit card.

2. Your credit score also helps determine your interest rates. A bad credit score can cost you real money, since lenders often charge higher interest rates to borrowers they view as risky. On the flip side, a high credit score can save you some serious cash, since you’ll be more likely to score the best interest rates.

3. Your credit score is derived from your credit reports. There are three big credit bureaus — Experian , Equifax EFX -0.07% and TransUnion — and you have one credit report from each. Your credit score is calculated based on the information in these reports. On them, you’ll find identification info (like current and previous addresses) plus your history of dealing with credit (like payments you’ve made on student loans and credit cards in your name.) Under federal law, you’re permitted to pull your reports for free once per year. Request one every four months at

4. It’s up to you to get errors fixed. It’s important to make sure the info on your credit reports is accurate. If you spot errors — like an account that isn’t yours or a late payment you know you made on time — it’s your responsibility to get them fixed.

5. You can get your credit score for free. An increasing number of credit card providers (like Discover and Chase ) are issuing free credit scores to cardholders. You can also see your score gratis at certain sites like CreditKarma. “The credit score went from being a mysterious tool no one other than lenders knew about to being given away almost ad naseum,” credit score expect John Ulzheimer told FORBES last year.

6. There are several factors that make up your credit score. FICO scores are calculated based on the following, which are listed in order of importance:

35%: Payment history. This one is simple. Just pay your loans and credit card bills on time.

30%: Amounts owed. This has to do with something called your credit utilization ratio. Essentially, you don’t want to be using a high percentage of your total available credit. For instance, instead of maxing out your credit card, aim to spend no more than 30% of your credit limit.

15%: Length of credit history. Generally, the longer you’ve been using credit, the better.

10%: Credit mix. It’s best to have a variety of accounts, including revolving debt (like credit cards) and installment loans (like mortgages).

10%: New credit. Refrain from going overboard and applying for a bunch of new loans and credit cards in a short period of time. It looks like you’re desperate for credit.

7. A lot of things surprisingly don’t impact your credit. Your credit score is calculated strictly from the information in your credit reports, which is fairly limited in its scope. It only cares about your history of paying back money you promised you would. However, lenders often consider other information when evaluating you. For instance, nowhere on your credit reports is your income, alma mater or history of paying bills on time.

8. You have more than one credit score. The vast majority of lenders use FICO scores, provided by Fair Isaac Corp. Other lenders use VantageScore, which was created by the credit bureaus themselves. There are also dozens of different versions of these scores, so chances are the credit score you see is not the same one lenders are looking at. The difference typically isn’t cause for concern, though, and all credit scores are calculated from the same place — your credit reports.

9. Employers and landlords can do credit checks. Heads up: your credit may be considered when you apply for a job, apartment or when you try to get a new iPhone from Verizon. In the case of employers, they must ask for your permission to check your credit and if they decide not to hire you based on this info, they must tell you. Landlords aren’t required to get your permission, but do have to notify you if they deny you an apartment or change the terms based on your credit.

10. There are ways to dramatically improve your credit score. Maybe your credit score is in the gutter because you lost your job and had to declare bankruptcy last year. Or perhaps it’s nonexistent because you’re a recent grad, immigrant or new divorcee. Don’t fret. There are surefire ways to build a high credit score. The advice typically boils down to: Seek out credit and use it responsibly. There are certain missteps you’ll want to avoid, too.

The Top Security Industry Predictions for 2016 – And Awards for the Best

Thursday, January 7th, 2016

Dan Lohrmann –

More security predictions than ever before. As I examined hundreds of expert forecasts for 2016 and beyond, with cyber trends and predicted technology events from top companies, it is hard to be optimistic about our online situation. And yet, the combined predictions tell us an important story about online life. So where is cyberspace heading? What surprises await us?

As top security companies, technology magazines, cyber experts and security bloggers came out with their predictions for 2016, it is clear that the global cybersecurity industry continues to lose ground to the bad guys online.

For reminders and those who like to keep score, here is a list of the top security predictions that were made last December regarding the 2015 year that just ended.

Also, in this 2015 year-end summary, I explain how 2015 was the year that data breaches became much more personal — even intimate.

So what can possibly get worse (and hopefully better) in 2016? Only time will tell for sure — but thousands of security gurus give it their best shot each year. In order to help, I compile their wisdom into one place for easy access.

Therefore, here’s my “Guide to 2016 Security Predictions,” for readers who want to see the specific company prediction details as move past New Year’s Day 2016. If you want to jump to conclusions, my cyber prediction award-winners follow at the end.

The Top 16 Security Predictions by Company or Magazine

Here’s your annual one-stop roundup of what security experts are telling us will happen next….

1) Symantec: Symantec leads with attacks on the Internet of Things (IoT) and Apple iOS attacks growing dramatically. An impressive Symantec list of 2016 security predictions overall.

2) Last December, Raytheon/Websense successfully predicted 2015 health-care concerns in their security predictions overview. This year, Raytheon/Websense leads with predictions about attacker trends (increased abuse of newly created infrastructure), end-user behavior in a post-privacy society and evolving business behaviors as a result of cyberattacks and data breaches — including a surge in cyber insurance.

3) McAfee (Intel Security): McAfee Labs offer a five-year cybersecurity look ahead in infographic form. They predict a growing attack surface, difficult-to-detect cyberattacks, new device types and much more. They also cover growth in “integrity attacks” where hackers change the data to do harm.

4) FireEye: FireEye offers a free prediction report on their 2016 webcast which leads with security concerns with Apple devices in 2016 as well as IoT security problems.

5) Trend Micro: Trend Micro leads with “2016 will be the year of online extortion.” Second, “At least one consumer-grade smart device failure will be lethal in 2016.”

I really like Trend Micro’s presentation of their 2016 security predictions. In fact, I give them top honors for the best online graphics, clearest presentation, and easiest-to-understand security prediction summary of all security companies and bloggers I reviewed. After each straight-forward prediction, you can click on the button to get more details.

6) Kaspersky: The Kaspersky blog offers a nice narrative of various cyber trends that could lead to major events in 2016. Some of these include: “Blackmailing and squeezing money for stolen photos and hacked accounts.”

Also car hacks will grow: Culprits probably won’t focus on the systems themselves, but rather on the special protocols, which are implemented to enable communications between cars. “Compromise them — and you’ll be able to send fake commands to cars. These actions can lead to crashes of expensive cars and even to lethal consequences. …”

7) Sophos: Sophos offers their 2016 cybersecurity threat predictions. Like others, they lead with mobile threats rising, IoT platform vulnerabilities and small and medium-size businesses (SMBs) seeing more attacks.

8) Alert Logic: Alert Logic offers some optimistic 2016 predictions about the cloud — such as: “2016 will be the first year people choose cloud because of the security benefits.” This sets them apart and puts them in the top group.

9) Network World: Network World’s Jon Oltsik again offers this list, a bit different from other predictions. Leading his 2016 prediction list were: “Greater focus on cyber supply chain security, and the consumerization of authentication.” He also predicted that cyber insurance is set to boom (with others who predicted this).

10) IDC: IDC offers many technology predictions for the CIO Agenda, with #6 By 2016, 70% of IT organizations will shift their focus to advanced ‘contain and control’ security and away from a perimeter mentality.

“It’s time for organizations to reframe their security from the old, reactive threat-oriented model to an advanced, proactive, predictive, and integrity-oriented approach,” says Mike Rosen, vice president of research with IDC’s IT Executive Programs (IEP).

11) IBM: IBM offers several intriguing 2016 security predictions. A few include:

(More) companies and governments to use block-chain encryption.
Cyber intelligence as a service is coming.
Vulnerability curators will become prevalent.
More data breaches will lead to spikes in cyber-spending.
Financial orgs create own fusion centers — leave managed security services.

12) Computer Science Corp. (CSC): Dan Hushon, CSC’s chief technology officer, offers technology trends to watch. Some predictions are on security such as: “As context increases, cybertargets increase.” That is, as data becomes more contextually rich, it becomes more valuable to the enterprise — and to cybercriminals as well.

13) Business Insider offers: “How vulnerable IoT devices are changing the cybersecurity landscape.” This is a deeper look at vulnerable IoT systems:

– Research has repeatedly shown that many IoT device manufacturers and service providers are failing to implement common security measures in their products.

– Hackers could exploit these new devices to conduct data breaches, corporate or government espionage, and damage critical infrastructure like electrical grids.

– Investment in securing IoT devices will increase five-fold over the next five years as adoption of these devices picks up.

14) Forbes Magazine Online: Forbes leads their security prediction list for 2016 with the “leadership over luck theme.” Here’s an excerpt:

Unfortunately in most respects, 2016 won’t change much: users will still click on malicious links; IT will still be bad at patching; the bad guys will still attack; and the tide of misery from breaches will continue. What matters most is whether your organization will be a victim or not. Of course you could do nothing, and be lucky. But the only way to control your fate is to lead your organization to high ground based on a well-considered, security-first strategy. …

Missouri Federal Court Says ‘Benign’ Language on Envelope Does Not Violate FDCPA

Wednesday, January 6th, 2016

Brady Hermann –

This article was originally published on December 21, 2015 and is reprinted with permission from Maurice Wutscher.

The United States District Court for the Western District of Missouri recently granted a debt collector’s motion for judgment on the pleadings, holding an internal account number displayed on the envelope of a demand letter did not violate the Fair Debt Collection Practices Act (FDCPA) because it did not reveal the plaintiff was a debtor.

In March 2014, the debt collector sent a demand letter regarding a consumer debt owed by the plaintiff. The letter’s envelope had a window in which the plaintiff’s name, address and account number were visible. The defendant maintained the account number was not a number provided by the plaintiff, but was instead assigned by the defendant and known only internally.

The plaintiff filed suit in March 2015, alleging the demand letter violated the FDCPA because it included her personally identifiable information, specifically, the account number. After the pleadings were closed, the defendant filed a motion for judgment on the pleadings.

As the Court noted, pursuant to Fed. R. Civ. P. 12(c), “a party may move for judgment on the pleadings” any time “[a]fter the pleadings are closed – but early enough not to delay trial.” When reviewing a motion for judgment on the pleadings, courts apply the same standard applied to Rule 12(b)(6) motions to dismiss. Saterdalen v. Spencer, 725 F.3d 838, 840-41 (8th Cir. 2013). “A motion for judgment on the pleadings will be granted only where the moving party has clearly established that no material issue of fact remains and the moving party is entitled to judgment as a matter of law.” Waldron v. Boeing Co., 388 F.3d 591, 593 (8th Cir. 2004).
FDCPA Permits ‘Benign’ Language on Envelope of Demand Letter

It is a violation of the FDCPA to use “any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.” 15 U.S.C. § 1692f(8). Here, the letter allowed the plaintiff’s account number to be visible. Thus, under the plain language of the FDCPA, the defendant’s conduct was a violation.

However, as the Court noted, the Eighth Circuit has held that adhering to the plain language of the FDCPA would “create bizarre results.”Strand v. Diversified Collection Serv., Inc., 380 F.3d 316, 318 (8th Cir. 2004). Ultimately, the Eighth Circuit has concluded that the FDCPA “does not proscribe benign language and symbols” from being visible on the outside of an envelope. Id. at 319. Accordingly, the Court reasoned the key consideration was whether the plaintiff’s account number was benign.
Information is Benign if it Does Not Reveal Recipient is a Debtor

The plaintiff argued the account number was not benign because it violated consumer privacy. The Court, however, disagreed. Instead, the Court reasoned the legislative purpose was to prohibit a debt collector from using symbols and language on envelopes that would reveal that the contents pertained to debt collection. While debtor privacy is a legitimate concern, the Court believed the purpose of the FDCPA was not to prevent disclosure of internal account numbers, but to prevent identification of the recipient as a debtor.

Accordingly, the Court held that benign information that does not reveal the recipient is a debtor may be included on an envelope. Because the account number contained on the letter to the plaintiff did not reveal she was a debtor, the Court held it was not improper under the FDCPA. Therefore, the defendant’s motion for judgment on the pleadings was granted.

Courts Outside Third Circuit Continue to Reject Douglass v. Convergent Outsourcing

Last year in Douglass v. Convergent Outsourcing, the Third Circuit Court of Appeals held that where the debt collector’s internal account number for the consumer could be seen through an envelope window, section 1692f(8) of the FDCPA is violated and the disclosure is not benign because “it is a piece of information capable of identifying [a consumer] as a debtor.” Further, the disclosure of the internal account number “has the potential to cause harm” to a debtor because it is private, non-public information.

McShann adds to the growing list of courts outside the Third Circuit that have rejected Douglass.

2015 Year in Review – The FCC and TCPA Litigation

Monday, December 28th, 2015

Tim Bauer –

2015 was a busy year for the ARM industry. FDCPA litigation flourished. Consumer litigation in general was up year-over-year. The CFPB, FTC, and various state and local regulatory bodies made headlines. However, in one man’s opinion, in July of this year the ARM industry was hit with the most significant event since the Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 and/or the Consumer Financial protection Bureau (CFPB) came into existence in 2011.

On July 10, 2015 Federal Communications Commission (FCC) finally released its long-awaited (since June 18) TCPA Omnibus Declaratory Ruling and Order. (You can read the full text of the ruling here.) The Ruling has been extremely controversial. The ruling divided the FCC along partisan lines. Two angry, detailed dissents were filed. One by Commissioner Ajit Pai and the second by Commissioner Michael O’Reilly.

The stated goal of the ruling? Per the order itself: “To reiterate and simplify the relevant portions of the TCPA, and as a guide to the issues we address below: if a caller uses an autodialer or prerecorded message to make a non-emergency call to a wireless phone, the caller must have obtained the consumer’s prior express consent or face liability for violating the TCPA. Prior express consent for these calls must be in writing if the message is telemarketing, but can be either oral or written if the call is informational.”

Since that July ruling there has practically been a cottage industry devoted to providing opinion and expertise interpreting the order. (Editor’s note: insideARM was no exception. We devoted two webinars to the topic. Both had unprecedented large audiences. )

Among the issues discussed and debated in the last 5 months:

After the ruling, what is an Automated telephone Dialing System?
What is consent?
How can consent be revoked?
Does Consent need to be obtained from the current subscriber or the intended recipient of the call?
What is the “One Strike” Rule?

The ink was barely dry on the FCC ruling before ACA International filed a lawsuit to set the ruling aside. Other entities and trade associations also filed separate actions challenging the ruling. The individual suits we consolidated into the ACA action.

On September 21, 2015, ACA International, Sirius XM Radio, Inc., Professional Association for Customer Engagement, Inc., Inc. and ExactTarget, Inc., Chamber of Commerce of the United States of America, Consumer Bankers Association, Vibes Media, LLC, Rite Aid Hdqtrs. Corp., and Portfolio Recovery Associates filed an unopposed joint motion for briefing format and schedule in their consolidated appeal of the FCC’s July 10, 2015 Declaratory Ruling and Order. The Order approving that proposed schedule was filed by the court on October, 13, 2015.

Under the approved schedule briefs are required in intervals from November 25, 2015 through February 24, 2016. Oral arguments will be scheduled for some time thereafter.

Meanwhile, there have been a handful of significant TCPA opinions issued since the July 10 ruling.

In August, in the case of Luna v. Shac, LLC, the Northern District of California court discussed what was and wasn’t an ATDS. The order was one of the first court rulings discussing the FCC’s July Declaratory Ruling; specifically, that portion of the ruling regarding the definition of an ATDS. The court determined that the multiple steps that were required to send a text message in this matter were, in total, sufficient human intervention to defeat the TCPA claim.

On October 14, 2015, in the case of Leyse v. Bank of America, the Third Circuit Court of Appeals dealt with the issue of “intended recipient” of a call. In Leyse the parties agreed that the plaintiff’s roommate was the intended recipient of the call. But, the court concluded that Leyse did indeed have statutory standing to bring the TCPA claim. The Court’s reasoning is that the roommate was a regular user of the phone line and an occupant of the residence, and that this brought him within the language of the TCPA and the zone of interests it protects.

On October 23, 2015, a Third Circuit Court of Appeals decision gave TCPA plaintiffs additional ammunition supporting an expanded definition of an “ATDS.” In Dominguez v. Yahoo, Inc. the court vacated a prior summary judgment decision in Yahoo, Inc.’s favor. First, the court stated, “Because this is an issue of heightened importance in light of the 2015 FCC Ruling, and the District Court did not previously have the benefit of the FCC’s ruling in addressing the issue, remand is appropriate to allow that Court to address more fully in the first instance whether Yahoo’s equipment meets the statutory definition (of an ATDS).”

Also last month, a District Court Judge for the United States District Court for the Eastern District of Wisconsin granted a motion to continue the stay of a Telephone Consumer Protection Act (TCPA) lawsuit, pending resolution of the various appeals challenging the Federal Communications Commission’s (FCC) July 10, 2015 Declaratory Ruling and Order.

Lastly, just this past week there was an announcement that Western Union had settled a TCPA class action case for $8.5 million dollars. The case involved text messages to a potential class in excess of 800,000 individuals. Still, the settlement amount was somewhat surprising considering the fact that Western Union had a number of affirmative defenses available. Clearly there was a business decision made to settle the case.

TCPA litigation is alive and thriving. The July 2015 FCC ruling didn’t help or resolve anything. The attorneys involved in pursuing and defending the cases will make the money on the cases. ARM businesses will continue to struggle with the time and resources involved in defending the cases. Individual class members will continue to see crumbs. This is the nature of class action litigation.

Consumer Financial Protection Bureau Compliance Bulletin – December 16, 2015

Thursday, December 17th, 2015

CFPB Compliance Bulletin 2015-07

Supreme Court to Hear FDCPA Case

Tuesday, December 15th, 2015

Justices will decide if private attorneys appointed by State improperly used letterhead from the Attorney General’s Office to intimidate consumers into paying.

On Dec. 11, 2015, the U.S. Supreme Court agreed to hear Sheriff, et al. v. Gillie, et. al., No. 15-338, 2015 WL 5476344, — S.Ct.— (U.S. Dec. 11, 2015), a “FDCPA exemption” and “false, deceptive or misleading representation” case.

The Court is poised to answer two principal questions in the case:

Were the private attorneys designated as special counsel to collect debts owed to the state of Ohio state officials, rather than debt collectors subject to the Fair Debt Collection Practices Act, when they sent demand letters to two consumers?
Was the attorneys’ use of the official letterhead stationery of the Attorney General “materially misleading” under the FDCPA?

As ACA reported previously, in the underlying case of Gillie v. Law Offices of Eric A. Jones, LLC, No. 14-3836, 2015 WL 2151755 (May 8, 2015), consumers Pamela Gillie and Hazel Meadows filed a lawsuit against several law firms acting as special counsel for the Ohio Attorney General to collect medical debt owed to the state. They argued that the use of the Attorney General’s letterhead to send demand letters to collect consumer debt was intentionally misleading and, therefore, a violation of the FDCPA. After a lower district court ruled in favor of the law firms, the consumers appealed the decision to the Sixth Circuit Court.

With one judge on the three-judge panel dissenting, the Sixth Circuit vacated the district court’s decision for the law firms. The appellate court determined that private attorneys designated by the Ohio Attorney General as special counsel for debt collection purposes are not officers of the state, meaning they are not exempt from the FDCPA. As a result, the attorneys’ use of the Attorney General’s official letterhead on collection letters could be a misrepresentation that violates the FDCPA. Whether the special counsel had misrepresented their status was a question for a jury to consider, the majority of the appellate court decided.

Following its custom, the U.S. Supreme Court did not issue a comment on the case when it granted the law firms’ petition for writ of certiorari (a formal request for the Supreme Court to hear and review the case).

To read more about the most recent significant judicial decisions involving the credit and collections industry, ACA members can always find concise summaries of these decisions on ACA’s Industry Advancement Program website.