RMAI Update January 2022

As Congress returns from their winter break, RMAI continues to monitor Capitol Hill activities.  Currently all attention has been focused on the Voting Rights Act.  Next up, Congress will need to focus on the budget or pass an extension to the Continuing Resolution to continue funding the government.  The current Continuing Resolution ends in mid-February.  The other significant piece of legislation is the Build Back Better Act which contains many of the administration’s social policy items.  With Senator Manchin stating publicly his opposition to the Act, it will need to either be scaled back to gain his support, or it will not move forward.  To date, we have not seen or heard of any movement on industry related proposals.

The regulatory front paints a different picture as we have seen increased activity at several agencies including the CFPB, FTC, OCC, and the FDIC.  RMAI has a robust advocacy program in place, and RMAI representatives continue to meet with regulators to educate them on the important role the receivables management industry plays in the credit ecosystem and the value of RMAI’s Certification Program in setting the highest standards in the industry.

As a reminder, the No Surprise Act went into effect this month with the primary purpose being to eliminate surprise medical bills.  This Act additionally limits debt collection and credit reporting activities. If you are buying or collecting medical debt, please review this Act to insure compliance.  Click here to access the CFPB Bulletin for more information.

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 businesses and consumers. RMAI expects the 2022 State Legislative Session to be just busy as the prior year with the hot legislative topics including bank and wage garnishment, privacy laws, medical and student loan debt, and economic abuse.

While January tends to be the quiet before the storm as legislatures ramp up, here are some recent developments at the state level that might be of interest:

Florida SB 1424 – This bill would provide relief from collection activities to victims of domestic violence, human trafficking, and elder abuse provided that documented economic abuse is attested to in a police report that shows the connection to the perpetrator. [This issue is becoming more prominent at the state legislative level. Currently only Maine has a law of this nature, but a number of states are looking to follow suit. RMAI believes this bill could be a “model” for future bills as it includes reasonable safeguards to prevent mere statements of abuse from qualifying for the protection.]

Colorado AG Opinion – On December 20, 2021, the Colorado Attorney General’s Office published an advisory opinion designed to pair Colorado statutory requirements for validation notices with the new requirements contained in in Consumer Financial Protection Bureau’s Regulation F. The AG indicated that no regulatory action will be taken against a collection agency or debt collector who uses a date certain to satisfy the Colorado validation notice requirement that requires a notice about a consumer’s right to dispute within “30 days after receipt of the notice.”

New York Department of Financial Services Proposed Rule – On December 15, 2021, New York DFS issued proposed revisions to the state’s debt collection regulations. Public comment is open until February 14, 2022. [The proposed rules are quite concerning as they contain numerous contradictions to the CFPB’s Regulation F and recently adopted New York State laws. RMAI is working with a coalition of industry participants and sister trade associations in developing a coordinated response. RMAI will also be providing talking points and asking members for assistance with grassroots advocacy.]

Seventh Circuit Upholds Dismissal of FCRA Claim Despite Lack of Permissible Purpose

Persinger v. Sw. Credit Sys., L.P., No. 21-1037, 2021 U.S. App. LEXIS 37986 (7th Cir. Dec. 22, 2021)

A consumer had her debts discharged in bankruptcy.  Thereafter, a collection agency “began collection efforts on a pre-petition debt of [the consumer’s], including by acquiring a type of credit information called her “propensity-to-pay score.”  The consumer claimed the agency had no permissible purpose to do so and brought an action under the Fair Credit Reporting Act (FCRA).

The District Court granted the agency’s motion for summary judgment, “holding that Southwest’s compliance procedures were reasonable and thus met the FCRA’s requirements.”  The consumer appealed, alleging both negligent and willful violations of the FCRA.

After determining the consumer had standing to sue because her invasion of privacy claim was a concrete injury “analogous to the common law tort of intrusion upon seclusion,” the U.S. Court of Appeals for the Seventh Circuit explored the merits of the FCRA claims.

First, regarding the alleged negligent violation of the FCRA, the Court explained that a consumer must show either pecuniary or nonpecuniary harm, and rather easily concluded that the consumer’s “testimony not only failed to support her claim for actual damages but also disproved it.”  Thus, it was proper for the trial court to grant the agency’s motion for summary judgment on the negligence claim.

The Court next explained that “[e]ven if a plaintiff cannot prove actual damages, she may still recover statutory or punitive damages by proving that the defendant willfully violated the FCRA.”  Accordingly, the Court first examined whether there was a violation and, second, whether it was willful.

The FCRA is violated when a consumer report is obtained without a permissible purpose as required by 15 U.S.C. § 1681(b)(f).  Although § 1682(b)(a)(3)(A) permits obtaining a report for “collection of an account,” it is disallowed when a debt is discharged in bankruptcy and the “sole purpose for accessing a consumer report is collection.”  Thus, here the collection agency did violate the FCRA; it did not have a permissible purpose since it “intended to collect on the [] account, which was subject to bankruptcy.”

For such a violation to be “willful,” it must be “committed with actual knowledge or recklessness.”  The record demonstrated that the agency did not have actual knowledge since the debt in question, a pre-petition debt, was omitted “from her bankruptcy petition, so the bankruptcy court did not send a notice to any creditor for that debt. Thus, any lapse in

notification was attributable to [the consumer], not [the agency].  There was no “genuine dispute” that the agency learned of the bankruptcy after it obtained the credit report.

Finally, the Court determined that the agency did not act recklessly.  Following its procedures, the agency “ordered a bankruptcy scrub, received no results, and continued to collect on the debt. Months later, it received additional information from LexisNexis relating to [the consumer’s] bankruptcy and shut down the account. . . The evidence shows that it had a reasonable basis for relying on its procedures” and “achieved a 99.9% compliance rate during the relevant two-year period.”

Based on this, the Seventh Circuit affirmed the ruling of the trial court granting summary judgment in favor the agency.

Tenth Circuit Finds Specific Jurisdiction for TCPA Claims Even Though Calls Intended for Non-Forum Resident

Hood v. Am. Auto Care, Ltd. Liab. Co., No. 20-1157, 2021 U.S. App. LEXIS 38400 (10th Cir. Dec. 28, 2021)

Following his purchase of a used automobile, a Colorado consumer began receiving prerecorded calls to his cell phone with offers to sell him an extended car warranty.

The calls came from numbers with a Vermont area code, where the consumer previously lived and still maintained a cell phone number with a Vermont area code. He traced one such call to a Florida limited liability company that sold extended vehicle warranties and whose sole office was in Florida.  Allegedly, the telemarking campaign also involved calls made to Colorado consumer from Colorado numbers.

The consumer filed a putative class action suit against the warranty company and related entities in Colorado federal court alleging violations of the TCPA and invasions of the consumer’s and class members’ privacy by directing unwanted automated calls to their cell phones without consent.

Specifically, the Consumer alleged that the warranty company “used telemarketing to sell vehicle service contracts . . . nationwide, including in Colorado by calling Colorado phone numbers.”

Several defendants moved to dismiss the case for lack of personal jurisdiction in Colorado. The trial court determined that the consumer had alleged sufficient facts to establish that the warranty company purposefully directed telemarketing at Colorado.  However, the trial court also found that the call at issue to the consumer’s Vermont phone number did not arise out of, or relate to, its calls to Colorado phone numbers, and therefore granted the motions to dismiss for lack of jurisdiction, and the consumer appealed.

The Tenth Circuit explained that to determine whether specific jurisdiction has been properly exercised, “courts are to assess two requirements: (1) that the defendant has purposefully directed its activities at residents of the forum, and (2) that the suit arise out of or relate to those activities. . . But even when both requirements are satisfied, the Supreme Court has indicated that the defendant can still escape jurisdiction by establishing that it would be incompatible with traditional notions of fair play and substantial justice.”

On appeal, the warranty company argued: “(1) that purposeful direction must be shown by suit-related contacts—so its calls to Colorado residents at Colorado phone numbers cannot support personal jurisdiction for [the consumer’s] claim based on a call to a Vermont phone number; (2) that the second requirement contemplates a causal connection between a defendant’s forum contacts and the suit—but its calls to Colorado phone numbers did not give rise to its call to [the consumer’s] Vermont phone number; and (3) that subjecting it to burdensome litigation in Colorado, where its contacts are weak, would violate traditional notions of fair play and substantial justice.”

The Tenth Circuit rejected each of these arguments, relying on the U.S. Supreme Court’s decision in Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021), which was issued after the trial court’s decision in this case.

Beginning with the warranty company’s second argument, the Court explained the test is whether the claims “arise out of or relate to . . . activities that the defendant purposefully directed at residents of the forum.”  However, Court noted that in Ford, “the Supreme Court made clear that a causal connection is not required.”

“We understand Ford to adopt the proposition that the forum State can exercise personal jurisdiction over an out-of- state defendant that has injured a resident plaintiff in the forum State if (1) the defendant has purposefully directed activity to market a product or service at residents of the forum State and (2) the plaintiff’s claim arises from essentially the same type of activity, even if the activity that gave rise to the claim was not directed at forum residents.”

Accordingly, the Tenth Circuit concluded that Colorado could exercise jurisdiction over the consumer’s claims because he was a Colorado resident who was allegedly injured by activity essentially identical to activity that the Warranty Company allegedly directed at Colorado residents, even if the call at issue was not a direct result of its telemarketing efforts directed at Colorado.

Next addressing the warranty company’s first argument, the Court “disagree[d] with the premise that purposeful direction must be based solely on the contacts that generated the cause of action.”  Instead, based on Ford, “it is enough if the activity forming the basis of the claim against the defendant is related to the activity of the defendant that establishes that it purposefully directed its activities at residents of the forum.”

Finally, the Tenth Circuit was not persuaded that requiring the warranty company to litigate claims for alleged violation of federal law through telemarketing in Colorado was incompatible with fair play and substantial justice, merely due to inconvenience.

The Tenth Circuit reversed the trial court’s dismissal and remanded the matter for further proceedings.

Donate or Bid in the Annual Conference Silent Auction

The 2022 Annual Conference Silent Auction opens Tuesday, January 18th on our virtual auction platform. The auction catalog features various items  from technology to spirits to vacation stays. All proceeds from the auction will go towards RMAI’s 2022 Legislative Fund. This fund supports the important work that RMAI does across the United States to block harmful legislation; ensure the passage of fair and balanced regulations; and educate the regulators and law makers about our businesses’ key role in the economy.

DONATE: We are still accepting donations for the auction. If you would like to donate an item, please complete this Silent Auction Donation Form. View our Silent Auction wish list for ideas.

BID: Set up your bidding profile now so you can be ready when the Silent Auction opens on January 18th. If you are a returning bidder, your login credentials remain the same. Register as a new bidder.  Once you have set up your bidding profile, we welcome you to share your donation/bidding links to your company’s social media channels to create lively competition with your peers.

About the Legislative Fund

RMAI actively monitors and responds to state and federal measures affecting how our members do business. Your contributions to the Legislative Fund extend the reach of RMAI’s advocacy across the country where and when needed.

Read more about the Legislative Fund here. | Donate to the Legislative Fund | Click Here to see a list of current contributors on the right side bar.

2022 ANNUAL CONFERENCE EDUCATION

If you are looking to earn continuing education or Continuing Legal Education (CLE) credits, up to 15 credits of education will be available. Be sure to take one of the education credit forms to track the classes you attend.

Once the conference ends, turn your credit form into an RMAI staff member to take back and keep on file for when you are ready to complete your individual or renewal certification.

For CLE credits, we will submit your CLE credit form to our CLE representative who will then issue your certificate.

Note: We will only submit this for states identified on the CLE credit form. If you are submitting for a state that is not identified, you will need to submit your CLE credit form direct to your state bar.

 View the online agenda for details on education sessions including course descriptions and speakers.

Contact Shannon Parod at [email protected] or 916.482.2590 with any questions.

Congratulations to our new and renewed Certified Receivables Compliance Professionals (CRCP) and new and renewed Certified Receivable Businesses (CRB)!

CRCP – New
Catherine Calko – Spring Oaks Capital, LLC
Regan Halbert – Castello Quiroz, LLC
James Kaplan – SMS Financial
Angela Kresila – Troy Capital, LLC
Seth Miller – Premium Asset Recovery Corp.
Lillian Monaco – Premium Asset Recovery Corp
London Thompson – Oliphant United/Accelerated Inventory Management

CRCP – Renewals
Bryan Hosto – Converging Capital
Jim Novosad – Billing Tree/Repay
Lisa Thompson – Connect1
Linh Tran – Quantum3 Group

CRB – New
Paradigm Assets

CRB – Renewals
Diverse Funding Associates, LLC

FAST TRACK YOUR INDIVIDUAL CERTIFICATION AT THE ANNUAL CONFERENCE

If you’re planning to attend the Annual Conference and are also looking to complete your education for your initial or renewal certification, below are some tips to fast track the process so you can become certified or renew your certification immediately after the conference.

Individual certification requires 24 education credits every two years.

1. 15 education credits will be available at the Annual Conference. Earn up to 15 education credits during the conference, including all required classes for either initial or renewal certification. Required courses include Introductory Survey Course on Debt Buying (initial certification only), Ethics (initial and renewal certification), and Diversity, Inclusion & Elimination of Bias (initial or renewal certification). Taking these courses at the conference instead of as recorded webinars saves $324 (for initial certification) and $74 (for renewal certification) since all education is included in your conference registration price.

2. Complete remaining education credits via webinars prior to the Annual Conference. Register for any of our free recorded webinars while you wait to attend the conference. There are up to 15 education credits worth of FREE recorded webinars to choose from. Additionally, we offer bundles of education from our 2021 Annual Conference at various prices.

3. Complete your Education Credit Form at the Conference. Check off all the education sessions you attended at the conference on either one of the credit forms available (a general Education Credit Form and a CLE Credit Form (for attorneys). Turn a copy of the credit form into an RMAI staff member, and they will take it back to the RMAI office. Or, you can submit it separately with your application.

4. Submit the certification application. Send your completed application and all certificates of completion and/or conference credit forms to [email protected] after the conference so it can be reviewed and approved before the end of February.

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 2022 Annual Conference | February 7-10, 2022

RMAI 2022 Executive Summit | August 2-4, 2022

Diamond $25,000

Cavalry Investments, LLC

Crown Asset Management, LLC

Financial Recovery Services, Inc.

Portfolio Recovery Associates, LLC

Resurgent Holdings, LLC

Titanium $15,000

Velocity Portfolio Group, Inc.

Platinum $10,000

Midland Credit Management

National Credit Adjusters

Unifund CCR LLC

Gold $7,500

EverChain

Silver $5,000

C&E Acquisition Group, LLC/Diverse Funding Associates, LLC

Digital Recognition Network

National Loan Exchange

NCB Management Services, Inc.

Pharus Funding, LLC

Superlative RM

Bronze $2,500

Absolute Resolutions Corp.

Investment Retrievers, Inc.

RAzOR Capital, LLC

Resurgence Capital, LLC

SAM, Inc. – Solutions for Account Management

Security Credit Services, LLC

Spire Recovery Solutions, LLC

Synergetic Communication, Inc.

Brass $1,000

Bayview Solutions, LLC

Complete Credit Solutions, Inc.

FLOCK Specialty Finance

Halsted Financial Services, LLC

Hunt & Henriques

Invenio Financial, a Phillips & Cohen Associates Company

Kino Financial Co., LLC

Levy & Associates, LLC

Malone Frost Martin PLLC

Simmonds & Narita, LLP

T&I Enterprises, LLC

The Cadle Company

Tobin & Marohn

Universal Fidelity, LP

VeriFacts, Inc.

Other

Accelerated Data Systems

Access Receivables Management

Acctorp International, Inc.

Action Collection Agencies, Inc.

Advancial Federal Credit Union

Aldridge Pite Haan, LLP

Alliance Data

Alliant Capital Management LLC

Alpha Recovery Corp.

Andreu, Palma, Lavin & Solis, PLLC

Arko Consulting LLC

ARM Compliance Business Solutions

Atlas Acquisitions

Attunely Inc.

Autovest, LLC

Ballard Spahr, LLP

Beam Software

Blitt & Gaines, P.C.

Business and Professional Collection Service, Inc.

Butler & Associates, P.A.

Capio

Capital Collection Management, LLC

Capital Link Management, LLC

Cascade Capital, LLC

Client Services Incorporated

CMS Services

Commercial Credit Group Inc.

Comtronic Systems, LLC

Conficio Capital, Inc.

Converging Capital, LLC

Convoke, Inc.

Cornerstone Support, Inc.

Couch Lambert

Credit Control, LLC

Credit Corp Solutions, Inc.

CSS Impact!

David Reid

Debt Recovery Solutions, LLC

Dyck-O’Neal, Inc.

Dynamic Recovery Solutions

Equabli

Experian

Faloni Law Group, LLC

Finvi

First Financial Portfolio Services, LLC (FFAM360)

First American Acceptance Co., LLC

First Solutions Debt Management, LLC

FMS, Inc.

FocusOne, Inc.

G. Reynolds Sims & Associates, P.C.

Gaskell & Giovannini, LLC

Genesis Recovery Services

Guglielmo & Associates, PLLC

Harvest Strategy Group, Inc.

Hinshaw & Culbertson

Indiana Receivables, Inc.

Interim Capital Group, Inc.

International Debt Buying Consultants, LLC

Island Portfolio Services, LLC

Jefferson Capital Systems, LLC

Jormandy

Keith D. Weiner & Associates Co., LPA

Kelly Knepper -Stephens

Kirschenbaum & Phillips, P.C.

Klima, Peters, & Daly, P.A.

Law Offices of Steven Cohen, LLC

Lockhart, Morris & Montgomery, Inc.

MauriceWutscher LLP

Metronome Financial LLC

Monarch Recovery Management, Inc.

National Debt Holdings, LLC

National Recovery Associates, Inc.

National Recovery Solutions, LLC

Nationwide Recovery Systems

Nelson & Kennard

NRA Group, LLC

PCI Group Inc.

PerSolve, LLC

Phin Solutions, LLC

Portnoy Schneck, L.L.C.

Poser Investments, Inc.

Premier Forty Financial, LLC

Premium Asset Recovery Corp (PARC)

Pressler, Felt and Warshaw, LLP

Pro Forma Inc

Provana, LLC

ProVest LLC

Quall Cardot, LLP

Quantum3 Group

RAS LaVrar LLC

Rausch, Sturm, LP

Repay

Resource Management Services, Inc.

RevSpring

RIP Medical Debt

Scott & Associates, PC

Sentry Credit, Inc.

Slovin & Associates

SMS Financial, LLC

State Collection Services, Inc.

Stone, Higgs & Drexler

Suttell & Hammer

Synchrony Financial

Tag Process Service, Inc.

Techno Brain BPO ITES Limited

TransUnion

Troy Capital, LLC

USASF Servicing

USI Solutions, Inc.

Vargo & Janson, P.C.

Velo Law Office

Venable LLP

Venandi Systems, LLC

VoApps

Zenarate, Inc