1. Compliance Review and State Law Update Dena Glaeser, Navient Michael Del Valle, Sessions Fishman Nathan & Israel

2. Disclaimer
Any content included in this presentation or discussed during this session is presented for informational purposes only. The contents are not intended to serve as legal or other advice. We do not represent or warrant that the content is accurate, complete or current for any specific or particular purpose or application.
This information is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.
By using the contents in any way, whether or not authorized, the user assumes all risk and hereby releases all parties from any liability associated with the content.

3. Consumer Complaints » CFPB Complaint Statistics 2011

4. Consumer Litigation »
LAWSUITS ON THE RISE

5. Consumer Complaints on the Rise»
FTC and CFPB annual complaint volume has steadily increased, rising 80% from 91,000 in 2012 to 163,700 in 2013.
Over 170,000 CFPB complaints have already been received as of August 2014.
CFPB Consumer Response: A Snapshot of Complaints Received

6. Consumer Complaints on the Rise»
CFPB Consumer Response: A Snapshot of Complaints Received

7. Litigation Hotspots»
Sessions identifies jurisdictional trends and tailors the practice to meet the needs of the debt collection industry, giving the firm a national reputation as the largest practice area dedicated to protecting collection firms and debt buyers.

8. The FDCPA » Fair Debt Collection Practices Act
CFPB Litigation Statistics

9. The FDCPA» Call Volume
The FDCPA prohibits “causing a telephone to ring … repeatedly … with intent to annoy, abuse, or harass[.]” 15 U.S.C. § 1692d(5).
There is no bright line rule on how many calls is reasonable.
Courts consider all circumstances including:
Call volume
Pattern of calls
Notice of wrong number or cease & desist request
“Debt collectors do not necessarily engage in harassment by placing one or two unanswered calls a day in an unsuccessful effort to reach the debtor, if this effort is unaccompanied by any oppressive conduct (threatening messages).”
Pugliese v. Prof'l Recovery Serv., Inc., 2010 WL (E.D. Mich. June 29, 2010) (quoting Saltzman v. I.C. Sys., Inc., , 2009 WL (E.D. Mich. Sept. 30, 2009) (quoting Millsap v. CCB Credit Services, Inc., No. 07–11915, slip op. at 8 (E.D. Mich. Sept. 30, 2008); see also Martin v. Select Portfolio Serving Holding Corp., 2008 WL , (S.D. Ohio, March 3, 2008).

10. PASSED MUSTER TO DEFEAT MOTION TO DISMISS OR SUMMARY JUDGMENT
The FDCPA» Call Volume
PASSED MUSTER TO DEFEAT MOTION TO DISMISS OR SUMMARY JUDGMENT
11 times over a period of 19 days, 2 calls on the same day
Valentine v. Brock & Scott, PLLC, 2010 WL (D.S.C. Apr. 26, 2010)
17 times in 30 days
Brown v. Hosto & Buchan, PLLC, 748 F. Supp. 2d 847, 852 (W.D. Tenn. 2010)
9 calls in 30 days
Carr v. NCO Fin. Sys., Inc., 2011 WL (E.D. Pa. Dec. 20, 2011)
101 calls in 59 days
Brandt v. I.C. Sys., Inc., 2010 WL (M.D. Fla. Feb. 19, 2010)
200 calls in 19 months , many after oral C&D request
Joseph v. J.J. Mac Intyre Companies, LLC., 238 F.Supp.2d 1158, 1168 (N.D.Cal.2002)
26 calls in 60 days
Akalwadi v. Risk Mgmt. Alternatives, Inc., 336 F.Supp.2d 492 (D.Md.2004)
4 calls per day for 6 months
Prewitt v. Wolpoff & Abramson, LLP, 2007 WL (W.D.N.Y. Mar. 19, 2007)
54 calls to work in 6 months
(17 in 1 month, 6 in 1 day)
Sanchez v. Client Services, Inc., 520 F.Supp.2d 1149, 1160–61 (N.D.Cal.2007)
67 calls in 6 months, many
after written C&D request
Kerwin v. Remittance Assistance Corp., 559 F. Supp. 2d 1117, 1125 (D. Nev. 2008)
350 calls in 8 months
Pugliese v. Prof'l Recovery Serv., Inc., 2010 WL (E.D. Mich. June 29, 2010)
We recommend: no more than 2 calls per day and always more than 2 hours apart.

11. The FCRA » Fair Credit Reporting Act
CFPB Litigation Statistics

12. The FCRA» General Duties under FCRA:
Correct and Update Tradeline Information
Notice of Dispute
Notice of Closed Accounts
Notice of Delinquent Accounts
Provide Notice of Identity Theft Information
Investigation of Disputes
Notice of Results to Consumers
15 U.S.C. § 1681s-2

13. The FCRA» The Special “You Are In Trouble” Texas Rule
The Texas Debt Collection Act (TDCA) requires a collector to respond to a consumer’s dispute in writing within 30 days from receipt of the dispute:
Denying the inaccuracy
Admitting the inaccuracy; or
Stating that the debt collector has not had sufficient time to complete an investigation of the inaccuracy.

14. The TCPA » Telephone Consumer Protection Act
CFPB Litigation Statistics

15. The TCPA» What is an ATDS?
An ATDS is “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1)
Courts have interpreted that to include any system that has the present capacity to store or generate numbers, even if you don’t actually use those functions.
Current TCPA- while no guarantees, some compliant technology options:
LiveVox HCI
LiveVox Manual Blend
TCN Manual Dial Only
Global Connect Manual Dialing
Betterwrx Manual Dialing
Radius Cell Manager

16. The TCPA» Scrub for Cell Phones
Scrub for cell phones before you dial. The following are free search providers:
Searchbug.com
Whitepages.com
Cellrevealer.com
Phonelookup.com
VOIPs should be treated as cell phones to avoid potential liability
Recent case law suggests VOIPs may be treated as cell phones under the TCPA
See Lynn v. Monarch Recovery Mgmt., Inc., 953 F. Supp. 2d 612, 627 (D. Md. 2013), pending on appeal in the 3d Cir. Court of Appeals

17. The TCPA» “Soppetize” the Number
Autodialing old cell numbers is risky.
Soppet – “called party” is the subscriber of the cell phone
See Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637, 640 (7th Cir. 2012)
Osorio – “called party” is the actual recipient of the calls, not the intended recipient.
See Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014)
Breslow – consent must come from subscriber of the cell number at the time of the call
We recommend: to minimize liability, manually dial until you confirm the debtor is still the current subscriber

18. State Laws: Convenience Fees»
While the FDCPA presents a separate risk, whether a convenience fee for processing payment by credit card is “permitted by law” depends on the state:
Prohibit
Convenience Fees
May Prohibit Convenience Fees
Do Not Expressly Prohibit
California
Colorado
Connecticut
Florida
Idaho
Illinois
Indiana
Maryland
Massachusetts
Minnesota
Mississippi
Nevada (unless give special notice)
New York
North Carolina
Ohio
Oklahoma
Pennsylvania
South Carolina
Tennessee
Washington
Wisconsin
Wyoming
Kansas
Maine
Texas
Utah
Alabama
Alaska
Arizona
Arkansas
Delaware
Georgia
Hawaii
Iowa
Kentucky
Louisiana
Michigan
Missouri
Montana
Nebraska
New Hampshire
New Jersey
New Mexico
North Dakota
Oregon
Rhode Island
South Dakota
West Virginia

19. State Laws: Convenience Fees»
March 26, 2013 – a debt buyer and debt collection law firm settled for $799,958 for convenience fees charged to pay by credit card, debit card, or check by phone. See FTC v. Security Credit Services, LLC, and Jacob Law Group, PLLC, 113-cv CC (N.D. Ga. Mar. 26, 2013).
April 11, 2014 – receivables company ordered to pay a $21,000 civil penalty for collecting convenience fees to pay by credit card or check by phone.
Pending: Court denied debt collector’s motion to dismiss an FDCPA case, holding that its $5 surcharge for payments via credit card may have violated the law. See Quinteros v. MBI Associates, Inc., 2014 WL (E.D.N.Y. Feb. 28, 2014)

20. State Laws: Call Recording »
State laws vary
Must have nationwide program for nationwide compliance
We routinely survey the 50 states for statutory changes and litigation trends

21. State Laws: Call Recording»
Federal law requires that at least one party taking part in the call must be notified of the recording See 18 U.S.C. § 2511(2)(d)
State laws vary, but generally:
This means that in some states, it is illegal for the consumer to record the collector without consent.
We recommend: debt collectors should always announce that the call is being recorded or monitored.
all parties must consent to the recording or monitoring
only one party must consent to the recording or monitoring
California
Connecticut
Florida
Hawaii
Illinois
Maryland
Massachusetts
Montana
Nevada
New Hampshire
Pennsylvania
Puerto Rico
Washington
All other states

22. State Regulations – New York
New York’s Department of Financial Services regulations published December 3, 2014.
New debt collector requirements relating to: additional disclosures to consumers following initial communications, new validation (substantiation) requirements, statute of limitation disclosure and procedure requirements, record keeping requirements, settlement procedures and procedures.
Most requirements effective March 3, 2015.
Section 1.2(b) (charge off debt initial disclosures) and section 1.4 (substantiation of charged off debt) effective August 30, 2015.

23. New York – Concerns Types of Debt Covered
Disclosures Applicable to All Debt
Disclosures Applicable to Charged Off Debt
Time Barred Debt Disclosure
“Substantiation”
Record Retention
Payment and Settlement Agreement Requirements
Quarterly Accounting
Satisfaction of Debt
Communications
Steep Penalties under NY Financial Services Law section $5,000 per offense.

24. Recent NYS DFS Guidance
The Regulations can be found at:
The Department has published interpretations at