In This Update
RMAI continues to monitor activities on Capitol Hill, specifically the various stimulus proposals to insure that FDCPA amendments, similar to what we saw in the HEROES Act, are not slipped in at the last minute. As you are all acutely aware, the outcome of the two Georgia U.S. Senate races will determine who controls the Senate for the next two years. RMAI is working to elect the two Republican incumbents as we believe a divided government (in 2021, the Democrats will control the House of Representatives and the White House) results in moderate, more reasoned proposals and confirmations due to the need for compromise. Please click this link to help support this effort. RMAI Member, Brian Williams, from Crown Asset Management, has generously offered to match contributions from RMAI members up to $25,000! Thank you, Brian!
On the regulatory front, RMAI continues to work with the CFPB to gain clarity on some of the language used in the Debt Collection rule, and is closely monitoring CFPB announcements for the release of the second part of the rule covering time-barred debt disclosures that we anticipate any day.
The CFPB maintains a page on their website with resources to help industry participants understand, implement and comply with the Debt Collection Rule. You can visit this site here. If you would like to receive email alerts when new information is added to this page, you may sign-up by providing your email address on the lower part of the page.
Though December tends to be a quiet month in the state legislatures, this year we ask you to submit written comments and have some good news to share at the end of 2020:
Washington State – Submit Comments by January 5th for Proposed Work from Home Rule
The Department of Licensing in Washington State has published a proposed a rule which would allow collection agencies the ability to allow their employees to work from home. Prior to the current pandemic, remote work was prohibited in Washington State. The proposed rule can be found here.
RMAI encourages our members to provide written comments in support of the proposed rule no later than January 5, 2021. We know that the consumer advocates are going to try to criticize the proposed rule, so we need to provide a counterbalance.
Submit your written comments to Julie Konnersman, Department of Licensing, Washington State Board for Architects, P.O. Box 9020, Olympia, WA 98507-9020 or email jkonnersma@dol.wa.gov.
Idaho – Work from Home Guidance Extended
On December 3, 2020, the Idaho Department of Finance has extended its temporary regulatory guidance that allows employees of collection agency licensees to work from their own residence, without obtaining an Idaho branch license, until June 30, 2021.
Arizona – Branch Licenses No Longer Required
The Arizona Department of Insurance & Financial Institutions issued guidance that effective September 28, 2020 Collection Agencies licensed in Arizona no longer have to maintain Branch Licenses.
The two-year cycle comes to an end on December 31st (except for New Jersey). At RMAI, we are busy preparing for new bill introductions in 2021 and for what we anticipate being a very active year for State Legislatures.
9th Cir. Holds Mere Reliance on Contract Provision Not Enough for FDCPA ‘Bona Fide Error’ Defense
Urbina v. Nat’l Bus. Factors Inc., No. 19-16055, 2020 U.S. App. LEXIS 35050 (9th Cir. Nov. 5, 2020)
The U.S. Court of Appeals for the Ninth Circuit recently held that a debt collector cannot use the “bona fide error” defense to shield itself from liability under the federal Fair Debt Collection Practices Act (FDCPA) by merely: 1) contractually requiring creditor clients to provide accurate account information; and 2) requesting verification of account information from creditor clients but not waiting for a response before trying to collect.
The plaintiff was treated at a medical clinic and, after ceasing to make monthly payments, the clinic sent her a notice that she owed $614.52 and subsequently referred the account to a debt collector.
The debt collector’s contract with the medical clinic required the clinic provide “only accurate data and that the balances reflect legitimate, enforceable obligations of the consumer.” When the clinic referred a debt for collection, the debt collector’s routine practice was to “generate an automatic response listing the account name and number, the total amount due, and the date of last payment.” It also requested that that the clinic advise of any known account errors.
After referral of the plaintiff’s account, the debt collector sent a letter to the clinic asking that it verify the amount owed. The next day, without waiting for a response from the clinic, the debt collector sent the plaintiff a collection letter “seeking payment of $614.52 plus $29.07 interest.”
The plaintiff filed a lawsuit alleging the debt collector violated the FDCPA by miscalculating the amount of interest owed. The debt collector admitted to the miscalculation but, in response to the plaintiff’s motion for summary judgment, “argued that it was entitled to the benefit of the FDCPA’s bona fide error defense.” The trial court agreed with the debt collector and denied the plaintiff’s motion.
On appeal, the plaintiff argued that the bona fide error defense did not apply to the debt collector “because it did not have adequate procedures in place to prevent errors of the type that occurred here.” In response, the debt collector argued that it “reasonably relied on [the clinic’s] promise to provide accurate information.” Additionally, it “followed its standard practice” after the account was assigned “by requesting that [the clinic] notify it of any inaccuracies in the record of the delinquent account.”
The Ninth Circuit began by explaining that “[t]o avoid liability, debt collectors may raise the limited affirmative defense that their conduct was ‘not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.’” 15 U.S.C. § 1692k(c). Thus, “[t]he bona fide error defense requires a showing that the debt collector: (1) violated the FDCPA unintentionally; (2) the violation resulted from a bona fide error; and (3) the debt collector maintained procedures reasonably adapted to avoid the violation.”
Focusing on the third requirement, and citing Reichert v. Nat’l Credit Sys., Inc., 531 F.3d 1002 (9th Cir. 2008), the Ninth Circuit noted that it had “previously rejected the contention that unquestioned reliance on a creditor’s information can suffice as a bona fide defense.” Similarly, in Owen v. I.C. Sys., Inc., 629 F.3d 1263 (11th Cir. 2011), the Eleventh Circuit “ruled that employing a one-time form contract with a creditor-client, then blindly relying on the creditor to send only valid debts, is not a procedure designed to avoid erroneous interest charges resulting from an inaccurate payment history.”
The Court reviewed cases from the Seventh, Eighth and Tenth Circuits that described “procedures reasonably adapted to avoid the violation,” and explained that in those cases “[t]he procedures that have qualified for the bona fide error defense were consistently applied by collectors on a debt-by-debt basis; they do not include one-time agreements committing creditor-clients to provide accurate information that are later acted upon without question.”
The debt collector’s “fallback argument” was that it still qualified for the bona fide error defense since it sought verification of accuracy on every account from the client. Not surprisingly, this argument also failed since the debt collector communicated the amount of the debt to consumers before receiving verification.
Accordingly, the Ninth Circuit reversed the trial court’s grant of summary judgment and remanded the case for further proceedings.
10th Cir. Upholds Denial of Class Certification in TCPA Case
Rivera v. Exeter Fin. Corp., No. 20-1031, 2020 U.S. App. LEXIS 36839 (10th Cir. Nov. 23, 2020)
The U.S. Court of Appeals for the Tenth Circuit recently affirmed a trial court’s denial of class certification of claims raised under the federal Telephone Consumer Protection Act (TCPA).
A consumer filed a putative class-action lawsuit on behalf of himself and a proposed class of similarly situated consumers who allegedly received calls to their cell phones from an auto loan financing company using an automatic telephone dialing system in violation of the TCPA, 47 U.S.C. § 227(b).
After the consumer’s first attempt at class certification was denied, his second motion for class certification asked the trial court to certify a class of 482 cell phone subscribers, providing only a list of the prospective class members’ names and nothing else. The motion was denied, and the consumer appealed.
On appeal, the Tenth Circuit noted that simply providing a list of prospective class members’ names is insufficient; a class definition is necessary for court to assess the proposed class pursuant to the requirements of Federal Rule of Civil Procedure 23.
In affirming the trial court’s denial of certification, the Eleventh Circuit explained: “It is the burden of the plaintiff seeking class certification . . . to show the class certification requirements are satisfied and the submission of a list of names without a class definition falls short of satisfying this burden.”
2nd Cir. Finds Overshadowing Claim Supported by Litigation Threat
Mizrachi v. Wilson, No. 20-91-cv, 2020 U.S. App. LEXIS 35189 (2d Cir. Nov. 5, 2020)
A law firm sent an initial written communication to a consumer that, in addition to the language required by 15 U.S.C. § 1692g, stated it “had been ‘instructed . . . to commence litigation against [the consumer] in order to collect [a] debt’; that ‘THERE MAY BE NO FURTHER NOTICE OR DEMAND IN WRITING FROM [THE LAW FIRM] PRIOR TO THE FILING OF SUIT’; that in the event of a lawsuit [the consumer] ‘may also be responsible for paying the attorneys’ fees incurred in prosecuting the lawsuit’; and that he could avoid these consequences by ‘paying . . . now or making a suitable payment arrangement.’”
The consumer filed a lawsuit alleging: 1) the language in the letter overshadowed or contradicted her rights described in the letter, in violation of § 1692g(b); and 2) the threatened attorney’s fees were not authorized in any writing. The law firm filed a motion to dismiss, which the trial court granted.
On appeal, in an unpublished opinion, the Ninth Circuit reversed the ruling of the trial court. First, the Court explained that language that creates consumer uncertainty as to her or his rights may violate § 1692g(b). “The letter here, by threatening a lawsuit, cataloging the myriad consequences of such a suit, and offering payment or arrangement of payment ‘now’ as the only means of ‘avoid[ing]’ this suit, generates just such uncertainty.”
Second, there was a factual dispute regarding the existence of a signed contract authorizing attorney’s fees, and “[t]he district court should not have resolved this factual dispute at the motion to dismiss stage, and instead should have accepted as true the complaint’s well-pleaded allegation that Mizrachi had signed no such contract.”
9th Cir. Handily Determines Lack of Standing in FDCPA Case
A consumer received collection letters that allegedly failed to identify the current creditor, as required by 15 U.S.C. § 1692g(a)(2), and claimed he was, therefore, “unsure of who the current creditor was.” The trial court granted the debt collector’s motion for judgment on the pleadings, and the consumer appealed.
In an unpublished option, the U.S. Court of Appeals for the Ninth Circuit took up the issue of Article III standing on its own accord. The Court explained that for Article III standing, there must be: “(1) an injury in fact (2) traceable to the challenged conduct of the defendant (3) that is likely to be redressed through a favorable judicial decision.” Additionally, “[a]n injury in fact must be both concrete and particularized. . . ‘a bare procedural violation, divorced from any concrete harm,’ does not confer standing upon a plaintiff.”
Here, the Court found the alleged violation to be procedural in nature and without an adequate showing of “alleged actual harm or a material risk of harm to the interests protected by the FDCPA.” As explained by the Court: “[T]he Complaint does not support an inference that [the consumer] himself was ever at risk of detrimental reliance. Because the argument that he might have relied on the allegedly misleading statements to his detriment is entirely ‘conjectural’ or ‘hypothetical’ without additional factual allegations, [the consumer] has not adequately pleaded a material risk of injury.”
Accordingly, the Court vacated the trial court’s ruling and remanded the case with instructions to dismiss it without prejudice for lack of jurisdiction.
Donate with Your 2021 RMAI Member Renewal
RMAI appreciates members’ contributions to the Legislative Fund. If you have not renewed your membership yet, you can make a donation to the Legislative Fund when you renew. Now more than ever, we can certainly use the help of our membership in what is sure to be an eventful 2021 on the legislative front.
You can donate online or send your fill out our contribution form and send via email or by check.
UPCOMING WEBINARS
CHIEF COMPLIANCE OFFICER WEBINAR SERIES
Reaching Consumers/Persons by Telephone Under the CFPB’s New FDCPA Rule, held on December 3, 2020
Email and Safe Harbor – How to Navigate New Regulation F’s Bona Fide Error Defense, held on December 10, 2020
Text Messaging & Safe Harbor – How to Navigate New Regulation F’s Bona Fide Error Defense, December 17, 2020 at 8:30am PT/11:30pm ET
Time, Place, and Manner, January 7, 2021 at 9:00am PT/12:00pm ET (details coming soon)
Letters, January 14, 2021 at 9:00am PT/12:00pm ET (details coming soon)
Get certified in 2021 through RMAI Receivables Management Certification Program. Check out these helpful resources to learn how to earn the CRCP, CRB and CRV designations:
7 Steps for Individual Certification
7 Steps for Business Certification
7 Steps for Vendor Certification
Did you know that if your Certified Business has one or more affiliated business entities (debt buying company, law firm, collection agency, creditor), you can certify them as a Family of Companies for ONLY $100 each?
Your affiliated business entities must meet the following criteria to qualify for a Family of Companies under the same Certification:
- Have the same Chief Compliance Officer
- Have the same executive management team that exerts control over business operations
- Maintain a uniform network of compliance on all accounts serviced between the business entities
- Be governed by the same corporate policies and procedures
- Agree to be audited in a single unified audit
- Agree deficiency and remediation against one business entity will apply to all of the business entities
Learn how to add a Family of Companies by clicking here.
CONGRATULATIONS TO OUR NEW & RENEWAL CERTIFIED BUSINESSES, VENDORS, AND INDIVIDUALS!
CRB-New
Forsythe Finance – Dobberstein Law Firm (Family of Companies)
JCAP Funding, LLC – Jefferson Capital Systems, LLC (Family of Companies)
CRV – NEW
Connect1, LLC
CRCP – Renew
Amber Russo – Kino Financial Co., LLC
View all certified businesses and vendors.
View all certified individuals.
For questions about certification, contact Brianna Halsey at (916) 482-2462 or bhalsey@rmaintl.org.
Welcome New RMAI Members
| Elite Debt Brokers, LLC | Associate Debt Buyer | NY |
| KG Hawes | Affiliate | WA |
| SB&C Ltd. | Associate Collection Agency | WA |
Read more about these and other members on the Member Search page
RMAinsights magazine Fall 2020
In case you missed the RMAinsights magazine we mailed to you in October, here is a link to the publication online.
Serve on a Committee in 2021
RMAI encourages members to contribute their knowledge and industry experience by volunteering on a committee. In January 2021, RMAI will email all members a Call for Committee Participation invitation. Serving on a committee means getting involved in programs that interest you. Volunteering is also a great way to expand your business network by “virtually” working with other RMAI members.
RMAI’s leadership cultivates relationships within the receivables management industry to expand business opportunities for members.
RMAI 2021 Executive Summit | August 2-4, 2021
As the COVID-19 pandemic continues and enters new phases, RMAI is committed to keeping you informed. We distribute weekly Member Alerts when warranted with guidance for our members. RMAI continues to maintain our COVID-19 resource page on the RMAI website, conveniently accessible without a member password. Included on this webpage are COVID-19-related member alerts, webinars, regulatory and legislative resources, Executive Orders, and emergency court rules. We update the site with new content as it becomes available.
We also provide live and recorded webinars focused on the impact of COVID-19. To date we have hosted eight webinars on COVID-19 related topics. You can find and register for recorded webinars here.
In compliance with California’s guidelines re: minimizing non-essential employees in offices, the RMAI staff is working remotely. We continue to be available to serve you by phone and email.
Thank you to our December 2019 – December 14, 2020 Legislative Fund Contributors!
Diamond $25,000
Cavalry Investments, LLC
Financial Recovery Services, Inc.
Resurgent Holdings, LLC
Titanium $15,000
Velocity Portfolio Group, Inc.
Platinum $10,000
CKS Financial
Crown Asset Management, LLC
Unifund CCR LLC
Gold $7,500
First Financial Portfolio Service, LLC
Silver $5,000
Digital Recognition Network
Diverse Funding Associates, LLC
Garnet Capital Advisors, LLC
The Bureaus, Inc.
U.S. Equities Corp.
Bronze $2,500
C&E Acquisition Group, LLC/Diverse Funding Associates, LLC/DNF Associates
J. Reynolds Sims & Associates, P.C.
International Debt Buying Consultants, LLC
Investment Retrievers, Inc.
Jefferson Capital Systems, LLC
National Loan Exchange, Inc.
RAzOR Capital, LLC
Security Credit Services, LLC
Tobin & Marohn
Brass $1,000
Andreu, Palma, Lavin & Solis, PLLC
Atlas Acquisitions
Balbec Capital, LP
Ballard Spahr LLP
Butler & Associates, P.A.
Capio
C & E Acquisition Group
Central Portfolio Control, Inc.
Equifax, Inc.
Geist Holdings, Inc.
Halsted Financial Services, LLC
Investinet, LLC
Investment Retrievers, Inc.
Jormandy, LLC
Kino Financial Co., LLCF
Plaza Services, LLC
Pressler, Felt and Warshaw, LLP
Stenger & Stenger P.C.
The Cadle Company
The Law Offices of Ronald S. Canter, LLC
TrueAccord
United Holding Group
Verifacts, Inc.
Vertican Technologies, Inc
Other
Accelerated Data Systems
corp International, Inc.
Actuate Law, LLC
Aldridge Pite Haan, LLP
Alliance Credit Services, Inc.
Andreu, Palma, Lavin & Solis, PLLC
Applied Innovation, Inc.
ARM Compliance Business Solutions, LLC
ATKB Portfolio Management
Attunely Inc.
Bloom & Associates, P.A.
Capital Collection Management, LLC
Cascade Capital, LLC
Central Research, Inc.
CMS Services
Collins Asset Group
Commercial Credit Group Inc.
Complete Credit Solutions
Comtronic Systems, LLC
Conquest Receivables
Convergence Acquisitions, LLC
Converging Capital, LLC
Convoke, Inc.
Credit Control, LLC
Credit Management Corporation
D & A Services, LLC
David Reid
DebtTrader
Delev & Associates, LLC
Delta Outsource Group, Inc.
DNF Associates LLC
Dynamic Recovery Solutions
FLOCK Specialty Finance
FMS, Inc.
Full Circle Financial Services, LLC
Genesis Recovery Services
Glass Mountain Capital, LLC
Harvest Strategy Group, Inc.
Hinshaw & Culbertson
Hudson Cook, LLP
Hunt & Henriques
Indiana Receivables, Inc.
Invenio Financial, a Phillips & Cohen Associates Company
Jan Stieger
Keith D. Weiner & Associates Co., LPA
Kino Financial Co., LLC
Law Office of James R. Vaughan, P.C.
Law Offices of Daniel C. Consuegra, P.L.
Law Offices of Steven Cohen, LLC
Lockhart, Morris & Montgomery, Inc.
Logicoll, LLC
London & London
LTD Financial Services
Malone Frost Martin PLLC
Maurice Wutscher LLP
Mercantile Adjustment Bureau, LLC
Metronome Financial LLC
Monarch Recovery Management, Inc.
MRS BPO, LLC
Mullooly, Jeffrey, Rooney & Flynn, LP
National Check Resolution, Inc.
National Enterprise Systems, Inc.
National Recovery Associates
NCB Management Services, Inc.
NDS, LLC
Neustar, Inc.
Nuvei
Ontario Systems, LLC
Palinode, LLC
PCI Group, Inc.
Pharus Funding, LLC
Phin Solutions, Inc.
Portfolio Group Investors, LLC
Portfolio Recovery Associates, LLC
Poser Investments, Inc.
Premier Forty Financial, LLC
ProVest
Quantum3 Group, LLC
Resource Management Services, Inc
RevSpring
RIP Medical Debt
Riveride Sunnyhood Acquisitions, Inc.
Robinson Hoover & Fudge, PLLC
Runci Group
SAM, Inc. – Solutions for Account Management
Sandia Resolution Company, LLC
SCORE Statistical Consulting
Simmonds & Narita LLP
Solutions by Text
Sonnek & Goldblatt, Ltd.
Stephen L. Bruce & Associates
Stone, Higgs & Drexler
Superlative RM
Troy Capital, LLC
USI Solutions, Inc.
Vargo & Janson, P.C.
Venable LLP
VoApps
Wipfli LLP