RMAI Update December 2022

RMAI anticipates limited activity on Capitol Hill for the remainder of 2022.  Congress is expected to pass a Continuing Resolution to fund the government until December 23rd and prior to that pass an Omnibus Spending package.  Additionally, Congress will pass a National Defense Authorization Act.  We do not expect that either of these large legislative vehicles will be used to carry adverse proposals that would impact the accounts receivables management industry.

On the regulatory front, RMAI is closely watching the Supreme Court as it has agreed to hear the case challenging the constitutionality of the CFPB based on its funding mechanism.  However, in the meantime, the CFPB is issuing a proposed rule that would require non-banks to report enforcement actions and court orders to a public registry, which would be used to detect repeat offenders and give the CFPB and other enforcement agencies insights to help it “take action to stop further large-scale harm or continued illegal efforts across the country.”  The proposed rule also would require supervised nonbanks to submit annual written statements regarding compliance with each underlying order, signed by an attesting executive who has knowledge of the entity’s relevant systems and procedures for achieving compliance and control over the entity’s compliance efforts.  RMAI has grave concerns regarding these proposals and will submit comments expressing our concerns.

RMAI monitors, tracks, and responds to legislative and regulatory activity in all 50 states as the need arises.  Backed by RMAI’s State Legislative Committee and a team of state lobbyists, RMAI educates legislators about the industry and the negative impacts or unintended consequences a bill would have on the business community and consumers. RMAI is getting ready for what we anticipate being an active year. Here is a recently approved law in New York that might be of interest:

New York AB 7363-A [Chapter 648] Effective: November 23, 2022 – This law prohibits a hospital or health care professional from pursuing liens against a patient’s primary residence and the use of wage garnishment due to money judgments arising from actions brought by them.

9th Circuit Holds ‘Sequential Number Generator’ Refers to Telephone Numbers
Borden v. eFinancial, Ltd. Liab. Co., No. 21-35746, 2022 U.S. App. LEXIS 31613 (9th Cir. Nov. 16, 2022)

The U.S. Court of Appeals for the Ninth Circuit recently held that an “’automatic telephone dialing system’ must generate and dial random or sequential telephone numbers under the TCPA’s plain text.” (emphasis in original)

After a consumer provided his phone number to an insurance provider on a website, he began receiving texts from an insurance marketer. The consumer sued under the TCPA, claiming that the marketer used a “sequential number generator” to pick the order in which to call customers who had provided their phone numbers. The trial court dismissed the consumer’s complaint, ruling that the marketer did not use an autodialer and the consumer timely appealed.

The TCPA prohibits calling telephone numbers using an autodialer in certain cases. The TCPA defines an “automatic telephone dialing system” as “equipment which has the capacity – (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1).

Here, the Ninth Circuit held that the statutory text makes it clear that the “number” in “sequential number generator” within subpart (A) of the TCPA means a telephone number.

When interpreting a modifying clause set off by commas, “the most natural way to view the modifier is as applying to the entire preceding clause.” The Ninth Circuit determined that “to store or produce telephone numbers to be called” was dependent on the clause “using a random or sequential number generator.” This meant that “using a random or sequential number generator” modified the phrase “to store or produce telephone numbers to be called.” Thus, the Court reasoned that it made the most sense that the “number” referred to in the modified clause was the same as the “numbers” in the dependent clause and that both were referring to telephone numbers.

Furthermore, the Ninth Circuit noted that the Supreme Court of the United States’ ruling in Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), underscored that an autodialer must randomly or sequentially generate and dial a telephone number. Specifically, the Supreme Court held that “a necessary feature of an autodialer under § 227(a)(1)(A) is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called,” because the contrary interpretation “would capture virtually all modern cell phones, which have the capacity to store telephone numbers to be called and dial such numbers.”

The Ninth Circuit concluded that the consumer’s interpretation would go against the Supreme Court’s holding and return the Circuit back to the pre-Duguid state in which “virtually all” cell phones were at risk of violating the TCPA.

Accordingly, the Ninth Circuit affirmed the trial court’s dismissal of the consumer’s lawsuit.

Ninth Circuit Remands $925,220,000 TCPA Judgement; Provides Guidance on Aggregated Statutory Awards
Wakefield v. ViSalus, Inc., 51 F.4th 1109 (9th Cir. 2022)

A jury awarded $925,200,000 in a class action against a company that allegedly sent over 1.8 million prerecorded calls to the class members in violation of the Telephone Consumer Protection Act (TCPA).  In addition to other post-trial motions, the company challenged the damages as being “unconstitutionally excessive.”

The motions were denied and the company appealed, arguing in part that the statutory aggregate award was “so severe and oppressive that it violated [the company’s] due process rights.”

The U.S. Court of Appeals for the Ninth Circuit acknowledged that “constitutional due process concerns are heightened where, as here, statutory damages are awarded as a matter of strict liability when plaintiffs are unable to quantify any actual damages they have suffered from receiving the robocalls.”

Citing St. Louis, I. M. & S. R. Co. v. Williams, 251 U.S. 63, 40 S. Ct. 71 (1919), the Court explained that statutory damages can “violate due process only if the award is ‘so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.’”  For instance, an  “aggregated award could, like a per-violation award, be wholly disproportioned to the prohibited conduct (and its public importance) and greatly exceed any reasonable deterrence value.”

The Court concluded “that the aggregated statutory damages here, even where the per-violation penalty is constitutional, are subject to constitutional limitation in extreme situations—that is, when they are ‘wholly disproportioned’ and ‘obviously unreasonable’ in relation to the goals of the statute and the conduct the statute prohibits.”

Remanding the issue, the Court of Appeals instructed the trial court to consider its guidance as well as other “factors to help assess proportionality and reasonableness . . . in determining when an award is extremely disproportionate to the offense and ‘obviously’ unreasonable,” including those described in Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990):

1) the amount of award to each plaintiff, 2) the total award, 3) the nature and persistence of the violations, 4) the extent of the defendant’s culpability, 5) damage awards in similar cases, 6) the substantive or technical nature of the violations, and 7) the circumstances of each case.

New York Online Retailer Assessed $1.9 in Penalties and Costs for Failure to Protect Consumers’ Data

On October 12, 2022, New York State Office of the Attorney General announced it had “secured $1.9 million from [an online retailer] for failing to properly handle a data breach that compromised the personal information of tens of millions of consumers worldwide and for lying about the scope of the breach to consumers.”

The Assurance of Discontinuance alleges the retailer was targeted in a cyberattack in 2018 resulting in customers’ credit card numbers and login credentials being made available for sale on the dark web.  Prior to that time, it allegedly “failed to maintain reasonable security measures to protect customers’ data in several areas,” including:

1. Using insufficient methods to protect customers’ passwords against attacks;
2. Neglecting to perform scans to identify where cardholder data was stored on its systems;
3. Failing to run regular external vulnerability scans, use file integrity monitoring to detect unauthorized modifications to critical system files, retain an audit trail of a variety of systems, or regularly monitor or review audit logs to identify security incidents;
4. Failing to have a comprehensive, written response plan and, consequentially, failing to take timely action to protect impacted customers.

The AG asserted the alleged conduct violated N.Y. Exec. Law § 63 (12), which prohibits “repeated fraudulent or illegal acts,” N.Y. Gen. Bus. Law § 349, prohibiting generally “deceptive acts and practices in the conduct of any business,” and N.Y. Gen. Bus. Law § 899-aa, New York’s data breach notification law.

Donate Before It’s 2023
2022 is almost over and membership renewals, which are due by December 31st, are one of the many ways you can donate to the Legislative Fund. As you renew your membership, please take note of the suggested voluntary donation on your invoice. Every donation to our Legislative Fund is appreciated and greatly helps us to continue the fight for the receivables management industry, so feel free to donate a different amount than suggested.

If you’ve already paid your membership dues but would like to contribute, you can do so by donating here. We will add your company name to our list of Legislative Fund contributors on the RMAI website and in RMAI publications and invite you to the Legislative Fund Reception at the 2023 Annual Conference. View a list of current contributors on the right-side bar.

Attend the Legislative Fund Reception at the Annual Conference
On Monday, February 6, 2023, RMAI will be hosting its Legislative Fund Reception from 4:30-5:30 pm, which is open to any attendee who has donated to the Legislative Fund. You may even donate upon coming to the reception. We will be showing our appreciation to our donors with some delicious beverages, and will be giving out awards for our Bronze Level and higher donors.

Donate an Item for the Annual Conference Silent Auction
RMAI is collecting donations for the 2023 Annual Conference Silent Auction, sponsored by Kino Financial. Whether you are a regular donor or a first-time donor who wants to participate in the silent auction, please complete the Donor Form to add your item to our Auction Catalog.

More highlights about the auction will be coming throughout the remainder of 2022, so please head to our 2023 Annual Conference silent auction website for more details.

CLE & Certification Education Credits at the Annual Conference
At the 2023 Annual Conference, there will be up to 16 certification education credits available for your new or renewal certification. If you are a CCO for a certified business and need live/in-person education still, this is the place to be. All of the required courses for certification will be at the conference so make sure to schedule some time to attend the sessions.

CLE credits will also be available at the Annual Conference. Pick up a separate CLE Attendance Record form to complete while attending the conference.

Required courses for certification include:

• Introductory Survey Course on Debt Buying (4 credits) – New Applicant
• Ethics as the Cornerstone of a Compliance Management System (2 credits) – New and Renewal Applicant
• DEI: What is Equity, Inclusion & Belonging? – New and Renewal Applicant
  – Counts toward identifying and avoiding discriminatory collection practices (Diversity, Equity & Inclusion)

Miss a Webinar?
If you missed our November 16th or December 1st webinars, you can still watch the recordings:

1. The New D.C. Debt Collection Law — Big Changes, Big Issues (November 16th)
2. Data Security as an Element of Vendor Management (December 1st)

Click here for more information on our live and recorded webinars. Contact Shannon Parod at [email protected] or (916) 482-2590 with any questions.

Get Your Certification New or Renewal Application in Before the End of the Year
If you still need to submit your renewal for either your individual or business certifications, now is the time now is the time to submit your application in before the year is over. Don’t wait until you’re in danger of lapsing your certification and submit your application today!

If you are still working on your initial certification application, there’s still time to get it submitted and approved before the end of the year.

CRCP Application (individual certification)
CRB Application (for debt buyers, collection agencies and collection law firms
CRV Application (for brokers, defense law firms, vendors/Affiliate Members)

View all certified businesses and vendors.
View all certified individuals.
View educational requirements for certified individuals.

For questions about certification, contact RMAI at (916) 482-2462 or email [email protected].

RMAI’s leadership cultivates relationships within the receivables management industry to expand business opportunities for members.

RMAI 2023 Annual Conference | February 6-9, 2023

Please note, the RMAI offices will be closed December 23rd through 26th for the Christmas holiday, and January 2nd in observance of New Year’s.

Thank you to our December 2021 – December 13,  2022 Legislative Fund Contributors!

Diamond $25,000
Cavalry Investments, LLC

Crown Asset Management, LLC

Financial Recovery Services, Inc.

First Financial Portfolio Services, LLC (FFAM360)

Midland Credit Management

Portfolio Recovery Associates, LLC

Resurgent Holdings, LLC

Titanium $15,000

National Credit Adjusters, LLC

Platinum $10,000

Blitt and Gaines, P.C.

Cascade Capital, LLC

InvestiNet, LLC

Second Round, LP

Unifund CCR LLC

Gold $7,500

Miller and Steeno, P.C.

Pressler, Felt and Warshaw, LLP

Rausch Sturm, LLP

Superlative RM

Silver $5,000

AscensionPoint Recovery Services, LLC

CKS Financial

Corporate Advisory Solutions, LLC

Digital Recognition Network

FMA Alliance, Ltd

Halsted Financial Services, LLC

Klima, Peters, & Daly, P.A.

Pharus Funding, LLC

Provana, LLC

Spring Oaks Capital, LLC

T&I Enterprises, LLC

Tromberg, Morris & Poulin, PLLC

Velo Law Office

Bronze $2,500

Absolute Resolutions Corp.

Couch Lambert

DebtNext Software, LLC

Ragan & Ragan

RAzOR Capital, LLC

Resurgence Capital, LLC

Security Credit Services, LLC

Stillman Law Office

Weltman, Weinberg & Reis Co., L.P.A.

Brass $1,000

Action Collection Agencies, Inc.

Aldridge Pite Haan, LLP

Andreu, Palma, Lavin & Solis, PLLC

Arbeit

Barron & Newburger, P.C.

Bayview Solutions, LLC

Butler & Associates, P.A.

Call Center Services International

CCMR3

Cedar Holdings International, Inc. DBA Cedar Financial

Commerical Credit Group IOnc

Commercial Funding Inc.

Complete Credit Solutions, Inc.

Cornerstone Support, Inc.

D & A Services, LLC

Dobberstein Law Firm, LLC

Equabli

EverChain, LLC

FLOCK Specialty Finance

Gordon, Aylworth & Tami, P.C.

Guglielmo & Associates, PLLC

Harvest Strategy Group, Inc.

Hunt & Henriques

Investment Retrievers, Inc.

Jefferson Capital Systems, LLC

Kino Financial Co., LLC

Kota Business Solutions, LLC

Levy & Associates, LLC

Lockhart, Morris & Montgomery, Inc.

Maxwell & Graves Solutions, LLC

Metacorp, LLC

Portnoy Schneck, LLC

Quall Cardot, LLP

Quantum3 Group, LLC

Simmonds & Narita, LLC

SimpleCertifiedMail.com

Slovin & Associates

The Cadle Company

Tobin & Marohn

US Mortgage Resolution, LLC

Velocity Portoflio Group, Inc.

Venable LLP

VeriFacts, Inc.

Vertican Technologies, Inc.

Other

Alliance Credit Services, Inc.

Arko Consulting LLC

ARM Compliance Business Solutions

Atlas Acquisitions

Autovest, LLC

Ballard Spahr, LLP

Business and Professional Collection Service, Inc.

Capio

CMS Services

Coastal Law Firm. APLC

Complete Credit Solutions, Inc.

Converging Capital, LLC

Convoke, Inc.

Credit Control, LLC

CSS Impact!

David Reid

Delev & Associates, LLC

First American Acceptance Co., LLC

First Solutions Debt Management, LLC

G. Reynolds Sims & Associates, P.C.

Gaskell & Giovannini, LLC

Goldberg and Oriel

Interim Capital Group, Inc.

International Debt Buying Consultants, LLC

Jormandy

Keith D. Weiner & Associates Co., LPA

Kelly Knepper -Stephens

Kirschenbaum & Phillips, P.C.

Lockhart, Morris & Montgomery, Inc.

Malone Frost Martin PLLC

MauriceWutscher LLP

Monarch Recovery Management, Inc.

National Debt Holdings, LLC

Nationwide Recovery Systems

Nelson & Kennard

PCI Group Inc.

Phin Solutions, LLC

Poser Investments, Inc.

Premier Forty Financial, LLC

Premium Asset Recovery Corp (PARC)

Pro Forma Inc

Provana, LLC

ProVest LLC

Red Target, LLC dba SCJ Financial Services

Repay

RevSpring

Robinson, Hoover & Fudge, PLLC

SAM, Inc. – Solutions for Account Management

Scott & Associates, PC

Sonnek & Goldblatt, Ltd.

State Collection Services, Inc.

Stone, Higgs & Drexler

Stone Creek Financial Inc.

Suttell & Hammer

Tate & Kirlin

Techno Brain BPO ITES Limited

The Oakes Law Firm, LLC

Troy Capital, LLC

United Acquisitions, LLC

USASF Servicing

Vargo & Janson, P.C.

Velocity Portfolio Group, Inc.

Venable LLP

VoApps

Zenarate, Inc