2019 was a banner year for advocacy and legal accomplishments in the accounts receivable management industry and landmark news such as the release of the Consumer Financial Protection Bureau’s proposed debt collection rule, U.S. Supreme Court decisions on the Fair Debt Collection Practices Act, state laws on data privacy and consumer protections, and much more.
Here are some of this year’s most significant and well-read stories published in ACA Daily:
New York Law Outlines Requirements for Collection of Decedents’ Debts
A state law outlining legal obligations of debt collectors working with the family of a deceased debtor took effect in March 2019. The New York State Collectors Association tracked and worked on more than 100 bills during the legislative session, including the law on decedents’ debts.
Government Shutdown: ACA Comments on Role of Industry Outlined in Letter to House Financial Services Leaders
In a letter to House Financial Services Committee Chairwoman Maxine Waters, D-Calif, ACA International commented on the federal government shutdown while noting the benefits of consumer-creditor communications during times of financial hardship. Waters penned a letter to leaders at financial services industry trade associations and credit bureaus seeking information about their efforts to help consumers impacted by the shutdown. ACA urged the committee to consider the importance of an ongoing dialogue with consumers facing financial hardship.
“ACA members have long worked to engage in open communication with consumers about their financial situations to help provide solutions for resolving debts. Consumers need the information that ACA members provide them to maintain their financial health, and open communication can often lead to the most favorable outcome for them,” said CEO Mark Neeb in response to the letter.
ACA Member Defeats FDCPA Claim Involving Medical Debt Credit Reporting in Case Supported by ACA’s Industry Advancement Program
The Seventh Circuit Court of Appeals handed the accounts receivable management industry a significant win when it ruled unanimously that ACA International member Medical Business Bureau, LLC did not misrepresent the “character” of the consumer’s debt when it reported to consumer reporting agencies. The appellate court concluded that Medical Business Bureau was not liable under the Fair Debt Collection Practices Act for how it treated the consumer’s indebtedness for credit-reporting purposes because the credit report was factually correct.
ACA supported its member’s initiative to obtain this important, precedent-setting FDCPA decision positively impacting ACA’s members and the accounts receivable management industry by providing Industry Advancement Funds to help defray the cost of litigation as well as filing an amicus brief.
Parties Settle Crunch San Diego LLC v. Marks
The parties in Crunch San Diego, LLC v. Marks reached an agreement to settle the case related to the definition of an autodialer. Now the U.S. Supreme Court will not consider Crunch San Diego, LLC’s request that it review the Ninth Circuit Court of Appeal’s decision that the web-based platform the gym operator used to send promotional text messages to its members’ and prospective customers’ cell phones may be subject to the TCPA’s autodialer restrictions because it “stores numbers and dials them automatically to send text messages to a stored list of phone numbers.”
U.S. Supreme Court Debates Deference to FCC TPCA Order
The U.S. Supreme Court heard oral arguments in a case focused on the Federal Communications Commission’s interpretation of an unsolicited advertisement under the Telephone Consumer Protection Act—one that could have major implications on the law. In the case, PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., a chiropractic office brought a class action lawsuit against a publisher of a widely-used compendium of prescribing information for prescription drugs, alleging the publisher violated the TCPA by sending an unsolicited offer for a free e-book by fax.
Daily Decision Deep Dive: ACA Member Secures FDCPA Victory in Illinois District Court
The Northern District of Illinois issued an industry favorable decision on the issue of overshadowing. In Thompson v. Harris & Harris, the court found that the validation letter and one subsequent voicemail did not overshadow the consumer’s validation rights. Aside from being an industry win, this case illustrates the delicate balance that must be achieved between the consumer’s right to dispute the debt within the 30-day period and the debt collector’s right to demand payment. The letter discussed in this case found that balance by providing the consumer with payment options without creating a false sense of urgency that would confuse the consumer into thinking she has to pay the debt without the ability to dispute it.
CFPB Releases Consumer Report After Reviewing 25,000 Public Comments
Following requests for information (RFIs) on complaint reporting practices and complaint inquiry handling processes, the Consumer Financial Protection Bureau released an informative report showing that by the end of 2018, only 1 % of debt collection complaints were pending with the consumer and 2 % were pending with the bureau. The bureau received over 25,000 public comments on the RFIs related to reporting practices and handling processes, including comments from ACA International. ACA has long held the view that the bureau’s reporting and handling processes mischaracterize complaints against the accounts receivable management industry, particularly in reference to its failure to contextualize the number of complaints as compared to the number of contacts the debt collection industry makes to consumers over a given year.
Federal Court Strikes Down Exemption in TCPA for Government-Backed Debt Calls
The U.S. Court of Appeals for the Fourth Circuit ruled an amendment to the Telephone Consumer Protection Act allowing calls with autodialers for government debt is unconstitutional. The court’s ruling in American Association of Political Consultants v. FCC was issued as ACA International and the accounts receivable management industry continue to await clarity from the Federal Communications Commission on the definition of an automated telephone dialing system (ATDS.)
CFPB Alleges Consumer Law Violations by Large Credit Repair Companies
The Consumer Financial Protection Bureau took a major step toward eliminating predatory practices from the credit and collection space by filing a lawsuit against defendants operating two of the largest credit repair companies in the United States. According to the complaint, the defendants violated multiple consumer protection statutes, including the Consumer Financial Protection Act (CFPA) and the Telemarketing Sales Rule (TSR), by charging consumers unlawful advance fees in connection with credit repair services and by marketing and telemarketing those services through deceptive representations.
CFPB Releases Long-Awaited Proposed Debt Collection Rule
On May 7, 2019, the Consumer Financial Protection Bureau finally released its long-awaited proposed rule for the debt collection industry. The release of the proposed rule signals the biggest development in the accounts receivable management industry since passage of the FDCPA nearly 40 years ago. ACA’s CEO, Mark Neeb, and other members of the ACA executive team attended a CFPB’s field hearing. It should be noted that the proposed rule addresses a number of key issues about which ACA International has long sought clarity, including safe-harbor procedures for the use of voicemail messages, text messages and email. The proposed rule also provides more clarity on the requirements for a validation notice, including a model form for a validation notice. ACA is pleased that the CFPB chose to address the use of modern technology and communication, which have long been a source of great frustration for debt collectors.
Look for the remaining top articles of the year in ACA Daily in the coming days as well as highlights from Collector magazine in 2019.