Annual Conference Update
RMAI held our Annual Conference at the Aria in Las Vegas from February 3-6. With over 550 companies and almost 1,300 attendees, the conference was a great success. The Keynote session by Diego Zuluaga from The Cato Institute was heavily attended and well-received. We’re receiving very positive responses from attendees, exhibitors and sponsors about the networking and education opportunities provided.
Awards were given to honor leaders in the industry. RMAI awarded Walt Collins of Collins Asset Group the Bud Reitzel Lifetime Commitment Award, the industry’s highest recognition. RMAI awarded the President’s Award to two recipients this year: Sonia Gibson, National Government Affairs, Encore Capital Group, and Franci Wayland, Senior Counsel, Government Relations and Public Policy, PRA Group, Inc., for their efforts defending the industry through advocacy efforts at the state level. RMAI awarded the Integrity Award this year to John H. Bedard Jr. of Bedard Law Group. The Integrity Award recognizes individuals from an RMAI member company for demonstrated integrity in action, either professionally or personally. Read more about the awards and recipients in our press release.
Members of RMAI elected Directors and Officers to its Board for the next year at Annual Conference as well. We welcome one new board member, Laura Jensen of Absolute Resolutions, Corp. and RAzOR Capital LLC. Read the full details on our website.
We are already planning for Executive Summit in Stowe, VT, July 28-30, 2020, and for our next Annual Conference in Las Vegas, February 8-11, 2021. We hope to see you again soon!
The Federal Regulatory and Legislative Committee is anxiously awaiting the release of the CFPB’s Supplemental Proposed Rule on time-barred debt disclosures. The committee is prepared to analyze and draft RMAI’s Comments.
The committee anticipates a very busy 2020, with several pieces of FDCPA related legislation pending in Congress and keeping a close eye on the 2020 elections to best position RMAI to work with the new Congress and potentially, a new administration.
RMAI is actively monitoring over 250 bills that may impact the receivables industry in both positive and negative ways. Here are a few noteworthy bills that have been introduced:
Maine HB 776 – This bill would deem any judgment or decree of any court based upon a consumer obligation “paid and satisfied” at the end of one year unless within that period the judgment creditor has commenced an enforcement action on the judgment or decree. [RMAI has retained a lobbyist in Maine. RMAI has negotiated a compromise with Maine consumer advocates to replace the existing text in the bill with language to reduce the existing 20-year judgment time frame to 10 years with a 10-year renewal.]
Massachusetts SB 578/HB 919 – This bill among other things would: (1) reduce the statute of limitations in an action for the collection of a consumer debt from six to four years to be measured from the earlier of the date of charge-off, placement for collection, or 180 days after the last regular payment; (2) prohibit payments made prior to the limitations period expiring from tolling the statute; (3) prohibit any attempt to collect a consumer debt once the statute of limitations has expired but would allow a debt collector to accept an unsolicited voluntary consumer payment on a debt; (4) extinguish judgments after five years unless the creditor takes action to enforce the judgment; and (5) reduce the percentage that is subject to wage garnishment. [RMAI has retained a lobbyist to oppose the bill in its current form. RMAI participated in a stakeholder roundtable requested by the committee chair in January. Working with a receivables industry coalition, RMAI submitted redlines which are under review by the consumer advocates.]
New York AB 6909-B/SB 4827-B – This bill called the “Consumer Credit Fairness Act” would: (1) reduce the statute of limitations from six to three years on consumer credit transactions; (2) “extinguish” the right to collect on consumer debt past the statute of limitations; (3) require the mailing of a notice by the court clerk after filing proof of service of the summons and complaint; (4) require specific data to be included in the complaint; and (5) require the provision of form affidavits. [RMAI has a New York lobbyist and is working closely with a coalition of industry lobbyists to fight this bill. The coalition participated in a roundtable discussion with the Senate sponsor and consumer groups on November 26th in New York City in an attempt to find some common ground. The meeting went better than the industry anticipated. Industry submitted new redlines in January. A second roundtable is expected early in the legislative session.]
New York AB 9508/SB 7508 (Governor’s Proposed Budget Bill – Part LL on p. 131) – This bill would license debt collectors in New York State. Much of the language is common to state licensing laws. However, there are highly problematic provisions which would prohibit: (1) calls later than 8pm; (2) calls to the consumer’s place of employment; (3) communicating with the consumer more than 2 times in 7 days; (4) communicating by means of electronic communication; and (5) communicating by voicemail if it “reasonably known” to be accessed by others. [RMAI is working with our NY lobbyist and the Governor’s office to get our concerns addressed.]
Ohio HB 251 – This bill would decrease the statute of limitations from 8 years to 6 years on a written contract and 4 years on an oral contract. [RMAI and a coalition of RMAI members were able to prevent an amendment to the bill that would further reduce the SOL to 3 years. The bill has been passed by the House and is now being considered in the Senate.]
Washington HB 2476 – This bill would require debt buyers to provide basic account-level information in or attached to a complaint. Portions of the bill text was modeled after Colorado’s 2017 debt buyer law which RMAI supported. [RMAI and other industry participants have retained lobbyists to negotiate this bill. It was through these negotiations that took place prior to bill introduction that we were able to alter the original bill draft (that was very problematic) to the language adopted in Colorado. Post-introduction, RMAI and industry participants have agreed to compromise language which resulted in amended text which RMAI supports.]
If you are interested in obtaining a copy of the RMAI state tracking list, please contact David Reid at firstname.lastname@example.org.
6th Cir. Holds Consumer Lacks Standing to Assert ‘Meaningful Involvement’ Claim
The U.S. Court of Appeals for the Sixth Circuit recently affirmed a district court’s finding that a consumer lacked standing to pursue a lawsuit alleging that collection notices sent by a law firm violated the FDCPA because no attorney with the firm conducted a meaningful review of his debts.
The consumer received two collection letters that were printed on the law firm’s letterhead and signed by one of the firm’s attorneys. The consumer alleged that those letters were sent to him without any meaningful attorney review. In an effort to support this conclusion, the consumer asserted that the law firm sends so many letters that no attorney could possibly review all of them. He also alleged that the signatures on the two letters were identical and appeared to be “stock signatures.”
15 U.S.C. § 1692e(3) prohibits debt collectors from falsely representing or implying “that any individual is an attorney or that any communication is from an attorney.” The statute itself makes no mention of “meaningful involvement” or “meaningful review.” Instead, courts created the meaningful-involvement doctrine to evaluate claims asserted under § 1692e(3) with respect to communications that bear an attorney’s name or signature, but that are (in the words of one court) “not ‘from’ the attorney in any meaningful sense of the word.” Avila v. Rubin, 84 F.3d 222, 229 (7th Cir. 1996).
The district court dismissed the consumer’s case, finding that the consumer lacked standing and that he failed to state a claim under the FDCPA. On appeal, the Sixth Circuit limited its review to the issue of standing and affirmed the district court’s dismissal.
To pursue a case in federal court, a plaintiff must demonstrate that he has standing, and an essential element of standing is a showing that the plaintiff suffered an “injury in fact” as the result of the defendant’s alleged conduct. In this case, the consumer alleged that he suffered an injury in fact because the firm’s letters made him feel anxious and caused him to fear that the firm would sue him if he did not pay.
The Sixth Circuit held that although a plaintiff might sometimes recover damages for emotional distress in an FDCPA action, a bare allegation of anxiety is insufficient to allege an injury in fact. The Court also found that the consumer’s alleged anxiety was insufficient to confer standing because it was self-inflicted and thus not traceable to the law firm’s alleged conduct. That is, the Court determined that any anxiety suffered by the consumer was the result of his decision not to pay his undisputed debts, rather than the content of the law firm’s letters.
The consumer also argued that the alleged violation of § 1692e(3) was sufficient, on its own, to confer standing. The Sixth Circuit agreed that a plaintiff need not allege any additional harm when alleging that the defendant has violated a procedural right that was created by Congress to protect a “concrete interest.” However, while it is clear that Congress enacted the FDCPA to protect consumers from abusive debt-collection practices, the consumer could not show that the law firm’s letters caused him any harm that the FDCPA was intended to prevent.
The Court distinguished the procedural violation alleged by the consumer from procedural violations found to be sufficient to confer standing in other cases, such as violations that subjected the consumer to attempts to collect debts that the consumer did not owe and violations that placed consumers at risk of waiving rights protected by the FDCPA.
Not every technical violation of the FDCPA is redressable in federal court, and some cases are subject to dismissal due to the plaintiff’s lack of standing. But the Supreme Court has noted that it is often difficult to determine when a plaintiff has sufficiently alleged an injury in fact resulting from the violation of a procedural right created by Congress.
5th Cir. Reverses Class Cert in FDCPA ‘Threat of Legal Action’ Case
The U.S. Court of Appeals for the Fifth Circuit recently reversed certification of a consumer class alleging that a debt collection letter violated the federal Fair Debt Collection Practices Act (FDCPA).
A medical patient (the “patient” or “class representative”) who failed to pay for medical care received a series of collection letters from the medical center’s voluntary debt collection service provider regarding unpaid medical bills.
One letter advised:
At this time, a determination must be made with our client as to the disposition of your account. Your failure to cooperate in satisfying this debt indicates voluntary resolution is doubtful. However, if it is now your desire to clear your account, you need to promptly remit the balance in full.
The patient did not contact the debt collector to discuss debt repayment programs, but instead contacted the medical center which advised her that she could enter a payment plan if she made an upfront payment. The patient claimed she could not afford the payment and that during the course of these conversations, she was under the impression that the medical center would sue her to collect the outstanding debt.
The patient brought claims on behalf of herself and all others similarly situated (the “class members”) against the medical center’s debt collector and its surety bondholder (the “debt collector”) alleging that their collection letter violated the FDCPA by falsely threatening legal action against her and class members even though the medical center never intended to file suit over the unpaid medical debt.
The trial court denied the parties’ cross motions for summary judgment, concluding that questions of fact remained about (1) whether an unsophisticated consumer would construe the collection letter to threaten legal action, and (2) whether the medical center intended to take legal action against the patient/class representative. Ultimately, the class representative’s motion for class certification was granted and the debt collector’s motion for leave to appeal the class certification was granted by the Fifth Circuit.
On appeal, the debt collector argued that the putative class failed the commonality and typicality requirements of Rule 23(a) as well as the predominance requirement of Rule 23(b)(3).
Interpreting these provisions, the Fifth Circuit reasoned that to establish liability under the FDCPA, the class members must prove not only that the collection letter threatened legal action, but that it did so despite the fact that the medical center did not intend to pursue legal action.
Turning first to Rule 23(a)(2)’s “commonality” requirement, the Court reviewed the standard set by the Supreme Court in Walmart v. Dukes, 564 U.S. 338, 348 (2011), holding that commonality requires more than a shared cause of action or common allegation of fact, but a common legal contention capable of classwide resolution. Here, although every member of the putative class received the same allegedly threatening collection letter, the FDCPA penalizes empty threats, not all threats. 15 U.S.C. § 1692e(5) forbids debt collectors from making a “threat to take any action . . . that is not intended to be taken.”
The Fifth Circuit opined that because the record was devoid of the medical center’s debt collection lawsuit filing practices, and no evidence was submitted demonstrating its actual intent to sue the class representative or class members, there was no showing of a uniform intention of the medical center to file suit. Thus, the class representative failed to demonstrate that the debt collector’s purported false threat to take legal action against the class members was capable of classwide resolution and failed to carry her burden to “affirmatively demonstrate” commonality.
For this reason, the Fifth Circuit held the class representative could not establish typicality under Rule 23(a)(3) because her claim could not be “typical of the claims or defenses of the class” without a common issue, nor predominance under Rule 23(b)(2) without demonstrating common issues that “predominate over any questions affecting only individual class members.”
Noting that there was no need to separately analyze whether the class failed under Article III standing, the Fifth Circuit noted that standing issues exist because there are undoubtedly members within the defined class of “all persons in Texas… who received the [collection letter]” who ignored the letter and therefore lack a cognizable injury under Article III.
However, the Court declined to reach the issue, because the Supreme Court repeatedly instructed that courts should first decide whether a proposed class satisfies Rule 23 before deciding whether it satisfies Article III, and that there is no need to answer the latter question if the class fails under the former.
Because the Fifth Circuit determined that the putative class failed under Rule 23 and could not be certified, the order granting class certification was reversed and remanded to the trial court for further proceedings.
CFPB Sues Companies Marketing Debt-Relief Services for FCRA, Telemarketing Sales Rule Violations
The Consumer Financial Protection Bureau (“Bureau”) recently filed a complaint alleging that a mortgage lender and a “sham” mortgage broker obtained, without a permissible purpose, prescreened lists of student debtors under the guise of using the information to offer mortgages. Instead, allegedly, the companies sold the data to various student loan debt-relief companies. The combined lists contained information on more than 19.5 million consumers with student loans.
In turn, the debt relief companies allegedly marketed their services to the student borrowers, charged advance fees and misrepresented to consumers that consolidating student loans would result in lower interest rates and improved credit scores. The Bureau also alleged that consumers were misled into believing that after consolidation, the U.S. Department of Education would become their loan servicer and they would no longer have to interact with third-party servicers.
With regard to the mortgage lender and “sham” mortgage broker, and their controlling individuals, the Bureau alleged violations of the Fair Credit Reporting Act (“FCRA”) because “[u]sing or obtaining prescreened lists to send solicitations marketing debt-relief services is not a permissible purpose under FCRA” and therefore violates 15 U.S.C. § 1681b(f).
The debt settlement companies allegedly charged fees before the consumers’ debt consolidations or other arrangements were even approved, which is a violation of the TSR. 16 C.F.R. § 310.4(a)(5). The Bureau also alleged that the false representations made by the debt settlement companies constituted additional violations of the TSR which prohibits misrepresentations of “[a]ny material aspect of any debt relief service . . .” 16 C.F.R. § 310.3(a)(2)(x).
The Bureau also considered each of the violations of the FCRA and TSR to be violations of the Consumer Financial Protection Act which prohibits “a covered person or service provider from committing or engaging in an unfair, deceptive, or abusive act or practice . . .” 12 U.S.C.S. § 5531.
The complaint seeks permanent injunctions, damages and monetary relief, civil money penalties and “disgorgement of ill-gotten funds.”
LIVE MONTHLY WEBINARS (Free to Members)
- State debt collection rules, Tuesday, March 10, 2020 at 9:00am PT/12:00pm ET
- Join CDIA for a Look into What’s Going on with Credit Reporting Today, Tuesday, April 21, 2020 at 9:00am PT/ 12:00pm ET
***All recorded monthly webinars are FREE to our members. Special series and select required courses for certification are paid at member rate.
CONGRATULATIONS TO OUR NEW AND RENEWAL CERTIFIED BUSINESSES, VENDORS, AND INDIVIDUALS!
CRCP – New
Christi Pavia – McNall & Associates, P.C.
Kathryn Gamelin – Mountain Peak Law Group, PC
Michael Harb – Gault Financial
Sara Woggerman – Ontario Systems, LLC
CRCP – Renewal
Jennifer Cristao – Portfolio Group Investors, LLC
Walt Collins – Collins Asset Group
McNall & Associates P.C.
CRB – Renewal
Debt Recovery Solutions, LLC
Quantum3 Group, LLC
View all certified businesses and vendors
View all certified individuals
For questions about certification, contact Caitlyn Vaden at (916) 482-2462 or email@example.com.
Abrahamsen Gindin, LLC, PA – Associate Law Firm
Branding Arc, FL – Affiliate
Chetu, Inc., FL – Affiliate
Connect1, LLC, CA – Associate Debt Buyer
Dove Investment Corp., FL – Associate Debt Buyer
First Credit Services, Inc., NJ – Associate Collection Agency
Friox Technology Pte. Ltd., Singapore – International Debt Buyer
Metropolitan Partners Group, NY – Originating Creditor
Ovation Partners, TX – Affiliate
Payment Savvy, LLC, TX – Affiliate
Riveride Sunnyhood Acquisitions, Inc., CA – Associate Collection Agency
Runci Group, RI – Affiliate
Selip & Stylianou, LLP, NY – Associate Law Firm
SPP Inc., GA – Associate Collection Agency
Thomson Reuters Court Express, D.C – Affiliate
Read more about these and other members on the Member Search page
Serve on a committee in 2020
RMAI is always encouraging members to contribute their knowledge and industry experience by volunteering on a committee. Consider strengthening your network and help shape webinar content and the annual conference — use your editorial skills or help recruit authors for RMAI’s bi-annual magazine … these are just some examples.
To view a list of committees and submit an interest form, click here: https://rmaintl.org/membership/committee-involvement/
Questions? Contact Barbara Souza at firstname.lastname@example.org, 916-482-2462.
HR Spotlight Brought to You by the RMAI & Insperity Partnership:
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RMAI works hard to open new markets and promote the industry at various conferences and events.
RMAI Executive Summit | July 28-30, 2020
In this update:
Thank you to our February 2019 – February 12, 2020 Legislative Fund Contributors!
Cavalry Investments, LLC
Financial Recovery Associates, Inc.
Portfolio Recovery Associates, LLC
Resurgent Holdings, LLC
Crown Asset Management, LLC
Encore Capital Group, Inc.
Unifund CCR, LLC
Velocity Portfolio Group, Inc.
Second Round, LP
Digital Recognition Network
Diverse Funding Associates, LLC
First Financial Portfolio Service, LLC
Garnet Capital Advisors, LLC
Plaza Services, LLC
Absolute Resolutions Corp
Reynolds Sims & Associates, P.C.
Glass Mountain Capital, LLC
International Debt Buying Consultants, LLC
Jefferson Capital Systems, LLC
National Loan Exchange, Inc.
RAzOR Capital, LLC
Security Credit Services, LLC
The Bureaus, Inc.
Andreu, Palma, Lavin & Solis, PLLC
Balbec Capital, LP
C & E Aquisition Group
Central Portfolio Control, Inc.
Geist Holdings, Inc.
Indiana Receivables, Inc.
Investment Retrievers, Inc.
Kino Financial Co., LLC
Ontario Systems, LLC
Peroutka, Miller, Klima & Peters, P.A.
Stenger & Stenger P.C.
The Cadle Company
The Law Offices of Ronald S. Canter, LLC
Tobin & Marohn
U.S. Equities Corp.
United Holding Group
Vertican Technologies, Inc
Accelerated Data Systems
Acctcorp International, Inc.
Actuate Law, LLC
AGORA Data, Inc.
Aldridge Pite Haan, LLP
Alliance Credit Services, Inc.
Arko Consulting LLC
Ballard Spahr LLP
Butler & Associates, P.A.
Capital Solutions Bancorp, LC
CBE Group, Inc.
Clear Payment Solutions
Complete Credit Solutions
Comtronic Systems, LLC
Convergence Acquisitions, LLC
Converging Capital, LLC
Credit Control, LLC
Credit Management Corporation
D & A Services, LLC
Delev & Associates, LLC
Delta Outsource Group, Inc.
Diverse Funding Associates, LLC
DNF Associates LLC
Dynamic Recovery Solutions
Federal Pacific Credit Company
FLOCK Specialty Finance
Fort Crook Financial Co.
Full Circle Financial Services, LLC
Genesis Recovery Services
Halsted Financial Services, LLC
Harvest Strategy Group, Inc.
Hinshaw & Culbertson
Hudson Cook, LLP
Hunt & Henriques
Keith D. Weiner & Associates Co., LPA
Kirschenbaum & Phillips, P.C.
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.
London & London
Maurice Wutscher LLP
Mercantile Adjustment Bureau, LLC
Metronome Financial LLC
Midwest Fidelity Services, LLC
Monarch Recovery Management, Inc.
MRS BPO, LLC
Mullooly, Jeffrey, Rooney & Flynn, LP
National Check Resolution, Inc.
National Recovery Associates
National Recovery Solutions, LLC
NCB Management Services, Inc.
PCI Group, Inc.
Pharus Funding, LLC
POM Recoveries, Inc.
Portfolio Group Investors, LLC
Poser Investments, Inc.
Premier Forty Financial, LLC
RAS LaVrar LLC
Resource Management Services, Inc
RIP Medical Debt
Riveride Sunnyhood Acquisitions, Inc.
Rocky Mountain Capital Management, LLC
Sandia Resolution Company, LLC
Simmonds & Narita LLP
Solutions by Text
Sonnek & Goldblatt, Ltd.
Tag Process Service, Inc.
Troutman Sanders LLP
Troy Capital, LLC
Universal Fidelity LP
USI Solutions, Inc.
Vargo & Janson, P.C.
Viking Client Services, Inc.