Texting in Debt Collection? LMKWYT!

Amy Hinzmann

September 12, 2023

Due to the lack of specific reference to Regulation F in Cupp, the California case on texting under Regulation F, debt collectors are left with little certainty that they will be protected by following legislative guidelines.

Prior to Regulation F’s effective date, text messaging was generally disfavored within the industry because many debt collectors were concerned about potential FDCPA claims arising out of text messaging. The FDCPA has not been amended in the time since text messaging became widespread and it does not address texting. As a result, most debt collectors avoided the risk presented by texting without more certainty on how it would be received in court. The few debt collections that did communicate via text message typically did so only with specific consent from the consumer, which can only be obtained after contact is first established through a different communication medium.

Enter the CFPB

The CFPB made it clear in the commentary provided with Regulation F that it endorses debt collectors’ use of modern communications methods like text messaging and email. Consumers want debt collectors to use these communication methods because they find these methods to be more convenient. Regulation F therefore included a tremendous amount of guidance about texting and emailing consumers, particularly consent and opt-out requirements, providing the industry with concrete rules to fill in the ambiguity of the FDCPA and enable collectors to develop policies, procedures, and strategies for engaging consumers through consumers’ preferred communication channels.

Judicial Reaction to Regulation F

Cases litigating the safe harbor created by Regulation F are starting to trickle out. A debt collector was sued in the Northern District of California after it sent 15 text messages to a consumer over the course of a month. On its facts, Cupp is definitely not the case on which consumer attorneys or debt collectors want to build case law on. First, the plaintiff is pro se. Additionally, the decision notes that the plaintiff alleges that he did not owe the debt, without reference to whether the defendant contested that fact. Based on the opinion, it seems that there was some mistake of identity or phone number.

Regulation F In Cupp

In short: There is no mention of Reg F in Cupp. The pleadings do not even tell us if the text messages sent to the plaintiff contained opt-out language, much less whether the plaintiff attempted to opt-out. Rather, the Court simply treated the text messages as if they were phone calls and determined, based on existing FDCPA case law (not the 7-in-7 rule), that 15 such ‘calls’ in a month could be considered harassment and therefore that the FDCPA claim could not be dismissed on the pleadings.

What does this mean for debt collectors? First, it suggests that the courts may not adopt the 7-in-7 presumption at all and that courts may be willing to find an FDCPA violation even where a debt collector does comply with 7-in-7. Second, it suggests that opt-out and consent may not be dispositive in these types of claims, as we may have expected in light of the regulation’s emphasis on consent and opt-outs.

But most importantly, it suggests that Regulation F did not change nearly as much as we thought it did. FDCPA plaintiffs and defendants can still litigate claims about issues that are thoroughly addressed in Regulation F without discussing the regulation at all, relying entirely on the older case law. There are no causes of action created in Regulation F; consumers must tie their claims back to the FDCPA, which has already been extensively interpreted by the courts. We may discover, as these cases progress through the courts, that the protections for debt collectors – the safe harbors and rebuttable presumptions – are similarly meaningless unless they tie back to the FDCPA or the case law interpreting it.

What is the diligent compliance professional to do?

For the time being, it appears that any FDCPA risk assessment must assess practices and policies both under Regulation F and then separately under only the FDCPA and its existing case law. Until we have more guidance from higher courts, we have to assume that any case and any court could go either way, while also bearing in mind that the CFPB has yet to bring any enforcement actions tied to Regulation F, which it may view very differently than the courts.

What’s your strategy WRT to text, then? LOL, IDK! LMKWYT!

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What I learned at NCBA

Amy Hinzmann

May 22, 2023

I had the privilege of attending NCBA’s Connect Conference last week in Denver, Colorado. As a relative newcomer to default management, the conference was a wonderful way to hear first-hand about the skills, habits and pain points of many of the stakeholders in the debt collections process who were in attendance.

Here are my key takeaways:

1. The default litigation bar is comprised of people who care deeply about the consumer – and efficient exit from the default management process is pro-consumer.

One of Oliver’s core values is “We champion consumer rights.”  I was lucky enough to attend a panel full of like-minded attorneys last week. During the panel entitled “How to Win or Lose in Collection Regulations” (featuring Jessica Lamoreux, Oliver’s Director of Risk & Compliance), the attorneys agreed that legislatures and regulators are focusing on medical debt, including the collection of medical debt. The panel noted that collections can be the first opportunity that the consumer has to truly understand what they owe – and why.

Medical billing is complicated. For a single procedure, a consumer can receive itemizations of benefits, preliminary billing statements, and other correspondence from multiple medical providers. Many of these documents are not bills due and owing yet, and consumers are not always able to tell what is actually owed until the account is placed for collection. Medical debt collectors are often providing the consumer with their first clear and simplified explanation of what is owed to whom.

Finding ways to streamline and simplify the process of medical debt collection serves consumers by offering what may be their first opportunity to obtain straightforward information about their medical debts.

2. NCBA members also care about employee and attorney burnout – another business problem alleviated by efficient, predictable outcomes.

The Attorney Well-Being & Mental Health panel candidly discussed the causes and effects of attorney burnout. Unsurprisingly, long hours at the office take their toll on employees’ mental health, which in turn reduces both productivity and employee retention.

Oliver is focused on providing a platform that simplifies the handoffs between attorneys, support staff and fourth party vendors.  Increases in automation will reduce the amount of time that attorneys spend on administrative tasks and on rework.  Allowing lawyers to focus on ‘lawyering’ and know they can rely on the Oliver process for efficient, accurate work will reduce the amount of time and stress related to moving a placement through the recovery lifecycle.  This will also provide a more consistent experience for the consumer.

As COO of Oliver, I’m responsible for the efficiency of our processes. I’m also responsible for a team of human beings – attorneys, paralegals and technical experts who work in a fast-paced environment. One of our core values is “We value people,” and I’m pleased to say that our vision and value proposition to the market will further our commitment to our employees, customers and users of the Oliver platform.

Jon Stelzner is the COO at Oliver, the first end-to-end solution for lenders in the default management process. As Oliver’s Chief Operating Officer, Jon’s primary responsibility is to oversee the company’s managed services and financial operations teams to ensure best-in-class delivery.  He is also responsible for Oliver’s reporting and analytics functions, giving clients actionable insight into what drives their metrics, and demonstrating the value-add that Oliver provides.



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