TrueAccord Submits Debt Collection NPRM Comments

By on September 19th, 2019 in Company News, Industry Insights
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In an effort to further improve the debt collection experience for consumers, TrueAccord filed comments in response to the Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Debt Collection Rulemaking. Our experience using mostly email to communicate with consumers about their debts gives us the unique ability to provide detailed feedback to the CFPB on the parts of the Proposed Rule that impacts the use of email, data science, and machine learning in debt collection. 

We know that consumers in debt collection benefit from both email communications and machine learning technologies. Email communications allow consumers to access content at their convenience (including emails that contain legally required disclosures); new machine learning technologies provide additional information and payment options based on the consumer’s interactions to further personalize their collections experience.

What are we suggesting?

Make the transition into collections communication simpler

When emailing a consumer, either an initial communication—one containing the validation notice in the body—or any communication relating to the debt, a debt collector should be able to contact that consumer at the email address that the consumer provided to the creditor. 

The proposed rules do not currently provide this option without causing an undue burden on consumers. TrueAccord highlighted that unnecessary restrictions in the proposal greatly limit the ability to communicate with consumers via email. Consumers who have already provided their preference for electronic communications to their creditor(s) would be forced to take extra steps because they have fallen into collection. 

Define and properly evaluate email as a unique medium

Our customers regularly tell us that email is very different from phone calls and even paper mail. As such, email communications warrant different treatment under the FDCPA and should not be subject to the standard time, place, and manner restrictions that were designed for and apply to primarily oral communications.

TrueAccord asked the Bureau to take this opportunity to further modernize the FDCPA by distinguishing that certain provisions do not apply to email. 

Recognize other, optional forms of electronic communications as legitimate

We raise concerns over the proposed definition of “attempted communication” and “limited content message.” The current proposed definitions have the unintended consequence of limiting digital advertising and other electronic messages that consumers can opt-in to receive. 

What is our goal?

TrueAccord’s suggested changes will increase the proposed rule’s ability to make collections more efficient, provide actual notice to consumers, give consumers immediate access to information, and enable consumers to control how they want to communicate.

The debt collection proposed rulemaking is an opportunity to empower the vast majority of consumers who prefer to communicate electronically. The Bureau must take advantage of this opportunity.

You can read TrueAccord’s full comments here.

Lavallee v. Med-1 Solutions Confirms Common Sense Email Principles

By on August 26th, 2019 in Compliance, Industry Insights

On August 8, 2019, the Seventh Circuit Court of Appeals (7th Cir.) released its long-awaited verdict in the case of Lavallee v. Med-1 Solutions, LLC, 17-3244 (7th Cir. Aug. 8, 2019). The court ruled that Med-1 Solutions, LLC did not properly provide the validation notice as required by the Fair Debt Collection Practices Act.

Additionally, the court held that the first email Med-1 Solutions, LLC sent did not constitute a debt collection communication. Despite the unsuccessful method by which Med-1 attempted to email the initial communication, it is possible to do so in a compliant manner consistent with the current interpretation of the FDCPA.

The court’s decision

The Court held that Med-1 Solutions, LLC did not properly deliver the validation notice to the consumer. Med-1 sent the Plaintiff an email, but the email did not contain the text of the validation notice.

Instead, the email contained a hyperlink to a page where the Plaintiff would have had to enter personal information, and then take four additional steps in order to open a PDF containing the full initial demand letter with the required validation notice language. 

The Court reasoned that Med-1’s email did not constitute a communication because the email did not have any content relating to a debt. The Seventh Circuit reasoned that the “email conveyed three pieces of information:

  • The sender’s name (Med-1 Solutions, LLC)
  • Its email address
  • The fact that it ‘has sent … a secure message.’ ”

The email did not convey any information about the debt so it did not constitute a communication.

The FDCPA requires debt collectors to provide the validation notice in the initial communication or within 5 days of the initial communication in writing. Since the email did not constitute an initial communication, the Court found the initial communication happened over the phone. Med-1 Solutions, LLC, however, did not provide the validation notice during that call or in writing within 5 days because the company believed that their email satisfied the requirement. 

How to provide a validation notice in initial communication via email

When sending an initial communication by email, the content in the body of that email must contain all the validation notice requirements (15 USC § 1692g). It should:

  • Identify current creditor
  • State the amount owed
  • Provide the validation statement explaining the customer’s dispute rights

With the right information provided in the initial communication customer’s are more likely to recognize the account and trust that the email is from a legitimate debt collector. It should contain information on:

  • How to unsubscribe from future emails
  • Telephone contact information
  • The business’ hours of operation

Beyond that, it should comply with any other state, federal, or local obligations such as whether or not to provide a disclosure or other information. These are some of the principals embraced in the CFPB’s proposed debt collection rule. Had Med-1’s email contained this information in the body of the email, the result in the case would have been different.

Limited content emails 

The Seventh Circuit’s decision also highlights a concern with sending limited content communications via email. This case reinforces the importance of developing an email strategy and fully understanding deliverability requirements. This can ensure emails are delivered and not identified as spam and filtered away from a recipient’s view.

A full deliverability strategy may consider several factors including, but not limited to ISP reputation, providing relevant content in the body of the email, and more technical aspects of email such as throttling, bounces, and bulking. These elements can greatly affect an email’s ability to reach its intended recipient and ultimately convey its message.

Med-1 Solutions, LLC did not have a prior relationship with the Plaintiff, they did not remember receiving the email, and they did not click on the hyperlink provided in the email. As the lower court noted in its decision, the Department of Homeland Security warns consumers from clicking on links received in emails from unknown senders. The Seventh Circuit decision showcases the ineffectiveness of using a limited content message to reach and engage a consumer.

TrueAccord and the future of digital debt collection

We work to create a digital environment that places customer experience at the forefront of our collections strategy. This means ensuring not only personalized content delivered through our machine learning technology, flexible payment options, and digital access for customers to manage their debts. We do all of this via software that guarantees compliance.

If you want to learn more about how our technology can change your strategy, reach out to our team here!