At a glanceWednesday, September 26, 2018

Collection Industry News At A Glance - September 26, 2018
Wednesday September 26, 2018
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FCC sides with telecom giants in vote to cap 5G fees

The FCC on Wednesday in a 3-1 party-line vote approved a new rule that would limit what fees local authorities can charge wireless providers as the industry builds out its next-generation networks, known as 5G.  Companies like Verizon and AT&T are competing to bring new 5G service in the years to come, an endeavor that will require a massive deployment of hardware across the country. Unlike 4G signals, which can be transmitted for miles by large cell towers, the next generation’s waves can only travel short distances and will require small cell stations every few city blocks.

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Appeals court decision complicates ‘autodialer’ issue

The U.S. Court of Appeals for the Ninth Circuit in a decision last week expanded the definition of an "autodialer," keeping it in line with the definition adopted by the Federal Communications Commission (FCC) in a series of rulings from 2003 to 2015, which was invalidated in March. NAFCU has advocated for a narrower interpretation so credit unions can contact their members without fear of breaking the law.

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Bureau of Consumer Financial Protection Issues Report and RFI on the Bureau’s Sources and Uses of Data

WASHINGTON, D.C. — The Bureau of Consumer Financial Protection (Bureau) today issued a report and Request for Information (RFI) regarding the Bureau’s sources of data and how data is used. The report provides transparency into how the Bureau collects and uses data and the accompanying RFI gives the public an opportunity to comment on those practices.

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GLBA and the California Privacy Act: Analyzing SB 1121’s Change to the Financial Institution Carve-Out Provision

Less than three months after California passed the California Consumer Privacy Act of 2018 (CCPA), Governor Jerry Brown signed SB 1121 this week, making a number of technical and substantive changes to the law.   Of particular note: SB 1121 modifies the financial institution carve-out language in CCPA section 1798.145(e). While the change is a welcome development for entities subject to regulation under the Gramm-Leach-Bliley Act (GLBA), it does not grant full exemption from the CCPA. Therefore, GLBA-regulated entities that collect information online will need to analyze the CCPA's requirements and how they apply to a specific business.

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USAA Offers Auto Loans Through Augmented Reality App

USAA is piloting a car-buying augmented reality app, which allows consumers to scan cars on the road and apply for an auto loan from local inventory right on the spot, the bank announced Monday.  Augmented reality slowly crept into consumer’s lives whether it’s scanning a bedroom to visualize a new paint job, virtually placing new furniture in the living room, or catching Pokemon on the sidewalk. USAA believes the same trend will come to car buying.

A select 500 to 1,000 USAA customers are testing the app, which can recognize vehicles from the model year 2000 and up and use the phone’s location to notify users of local dealers that stock the specific vehicle. Once the vehicle is identified, USAA will offer insurance quotes and auto loan rates for a direct financing deal or the ability to refinance an existing auto loan.

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Ninth Circuit Rules an ATDS Need Only Have the Capacity to “Store Numbers to Be Called” and Dial “Automatically”

In Marks v. Crunch San Diego, No. 14-56834, 2018 U.S. App. LEXIS 26883 (9th Cir. Sept. 20, 2018), a three judge panel found “the term ‘automatic telephone dialing system’ means equipment which has the capacity (1) to store numbers to be called, or (2) to produce numbers to be called, using a random or sequential number generator-and to dial such numbers automatically (even if the system must be turned on or triggered by a person)[.]”  The only other requirement, according to the Ninth Circuit, is that the equipment have the capacity to dial “automatically.”

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BIS Sees Boons, Risks As FinTech Credit Gains Traction

To paraphrase a certain defense secretary from earlier in the millennium: There are known unknowns and unknown unknowns. When it comes to FinTech firms and lending, might it be that what we don’t know could hurt us?A report by the Bank for International Settlements,m (BIS) found that when it comes to credit done through nascent technological platforms, boons and risks are afoot. The report noted that there is no internationally agreed-upon definition of what that activity might be, but for the confines of the report, it includes “all credit activity facilitated by electronic [online] platforms that are not operated by commercial banks.” Beyond that, volume has exploded, with $284 billion extended in 2016 compared to $11 billion in 2013.

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“X”-Treme Marks the Spot: Ninth Circuit Takes Extreme Position – Holds That All Dialers That Call Automatically From Lists Are Subject to the TCPA

TCPAland broke the news that the Ninth Circuit published its opinion in Marks v. Crunch San Diego, LLC, No. 14-56834, 2018 WL 4495553 (9th Cir. Sept. 20, 2018). We now have a new definition of an ATDS in the Ninth Circuit. It is:

[T]he term “automatic telephone dialing system” means equipment which has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers automatically (even if the system must be turned on or triggered by a person).

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Improving Debt Collection with Predictive Models

Badly assessed financial risks were at the core of the financial crisis in the late 2000s. Banks and credit companies used faulty models which did not highlight the real threat of the mortgages granted. When the housing bubble burst, it led to the collapse too big to fail financial institutions and the recession of the entire economy for a few years. All these problems could have been avoided with proper risk hedging tools. Imagine if a piece of software could tell you the repayment probability both for current, but also for future clients.

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Wendy’s Faces Class Action Lawsuit Over Collection of Staff Fingerprint Data

Fast-food chain Wendy’s is facing down a lawsuit in Illinois over its use of fingerprint scanners to track employees at work in retail locations, according to court documents obtained by ZDNet.   The complaint, a class action filed by former Wendy’s employees Martinique Owens and Amelia Garcia, argues that Wendy’s use of Discovery NCR Corporation fingerprint scanners to track employee hours and access to cash registers and point-of-sale systems is in violation of the Illinois Biometric Information Privacy Act (BIPA). Namely, BIPA requires employees to be notified in writing “of the specific purpose and length of time for which their fingerprints were being collected, stored, and used,” ZDNet wrote, as well as requires employers obtain “explicit consent” from staff in the form of writing to collect and use their biometric data. The plaintiffs say Wendy’s does not do this.

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Study: CUs increasingly targeted by cyberattacks

A new report from digital security firm Akamai revealed that the financial services industry is one of the most vulnerable to botnet cyberattacks, and credit unions are increasingly targeted because of their smaller size.   The report focuses on "credential stuffing attacks." Akamai describes these attacks as botnets attempting to access a target site in order to assume an identity, gather information, or steal money or goods by using lists of usernames and passwords obtained through data breaches. Between November 2017 and June 2018, Akamai tracked more than 30 billion malicious login attempts.

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OLYMPIA — Attorney General Bob Ferguson today filed a lawsuit against several Wenatchee-based collection agencies and their owner for buying millions of dollars of old debt and suing to collect on the debt without being licensed as collection agencies with the state.   The companies bought the debt for pennies on the dollar and collected on it for up to nine years before obtaining licenses. To this day, they continue to collect on the debt based on unlawfully obtained judgments. Their collection efforts include garnishing wages, seizing bank account funds and threatening to foreclose on homes.

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A.G. Underwood Announces Court Order Permanently Banning Fraudulent Debt Collectors From Industry

NEW YORK – Attorney General Barbara D. Underwood today announced a court order against defendants Gregory MacKinnon and Vantage Point Services, LLC; Angela Burdorf and Payment Management Solutions, Inc.; and Joseph Ciffa and Bonified Payment Solutions Inc. for illegal debt collection practices – including threatening to arrest consumers if their debts were not paid and adding unauthorized amounts to consumers’ debts. The court order permanently bans each defendant from the debt collection industry and requires collective payment of nearly $27 million in restitution and damages.

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Digital Banking Users Are Turning to Chatbots

Though many digital banking users in the US still prefer to talk to a human for their financial needs, a recent study from Humley found that a good number are also turning to chatbots.   Indeed, more than four in 10 (43%) respondents said they prefer to address any issues they may have with their banking provider this way—more so than going in-person to a branch (35%) or finding the answer they need on a website (35%). And definitely more so than reaching out on social media (6%).

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Freezing your credit is now free

You can now add credit-report freezes to the list of best things in life that are free. As of Friday, consumers won't have to pay a fee to credit-reporting firms when they want to use a freeze to help protect themselves from identity theft. They would, however, need to contact each of the big three bureaus — Equifax, TransUnion and Experian — to cover all their bases. "I think this is a good partial step," said John Ulzheimer, a credit expert and president of The Ulzheimer Group in Atlanta.

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5 cyber security basics you can’t afford to ignore

The recently discovered vulnerability involving fax lines on HP multi-function devices, termed Faxploit, are a reminder of the importance of fundamental security practices.  I did something a few weeks ago I rarely do: ignore a report about a significant vulnerability. Check Point Software released a very detailed analysis about the possibility of a network being attacked via a fax line. Perhaps it was disbelief, or alert fatigue, but I remember thinking that if a bad actor could attack a network using just a fax line, it was time for me to retire and take up chicken farming. As such, I ignored it for a few days.

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Banking: Wells Fargo, Chime, Empower banks fight for millennial accounts

Are you between 21 and 37? Please bank with us.  That’s the message millennials are hearing as the battle between the big banks and fintech companies for their hearts and deposits heats up. The newest entrant in the fray – personal finance app Empower – upped the ante this week by rolling out its mobile bank services, including a fee-free checking account with rewards and a savings account that earns significant larger yields than at the big banks. The move comes shortly after Chase began dangling 60,000 rewards points to get more well-heeled young people to sign up for a premium checking account.

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Maryland and Texas Men Indicted for Alleged $364 Million Ponzi Scheme—One of the Largest Ever Charged in Maryland

Baltimore, Maryland – A federal grand jury has indicted three men on charges of conspiracy, wire fraud, identity theft, and money laundering, arising from an alleged $364 million investment fraud scheme.  The indictment was returned under seal on September 11, 2018, and unsealed on September 18, 2018, upon the arrests of the defendants.  Charged in the indictment are:

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NAFCU retells bureau: Consumer complaints shouldn’t be public

NAFCU President and CEO Dan Berger, in a letter Wednesday, agreed with Bureau of Consumer Financial Protection Acting Director Mick Mulvaney's position that the bureau is not statutorily required to "run a Yelp for financial services sponsored by the federal government."   "Publication of unverified consumer narratives can have long-lasting effects on a credit union’s reputation, resulting in fewer members, market share, and potentially resulting in more time-consuming examinations," Berger wrote as he reiterated that the bureau should remove its consumer complaint database from public view.

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Mulvaney plans to move some consumer bureau staff to new Atlanta office

The Consumer Financial Protection Bureau (CFPB) plans to relocate a group of employees from Washington, D.C., to a new satellite office in Atlanta in an effort to reduce costs.   Acting CFPB Director Mick Mulvaney is seeking to open the regional office to host a small number of analysts and managers who work with agency examiners assigned to financial institutions in the southeast United States, according to a senior agency official familiar with the plans. The staffers would be moved from a CFPB office in downtown Washington, near the bureau’s headquarters, to a building in Atlanta owned by the General Services Administration.

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Industry Events

Debt Connection Symposium & Expo 2019

Resource Management Services Inc.

10440 Pioneer Blvd., Suite 2
Las Vegas , Nevada
September 10 - 12 , 2019

(562) 906-1101

Auto Finance Summit 2018

Auto Finance News

Wynn Las Vegas 3131 S Las Vegas Blvd
Las Vegas , NV
October 24 - 26 , 2018

(212) 564-8972 Option 4

LendIt Fintech Europe 2018

LendIt Conference LLC.

Business Design Centre 52 Upper Street
Ilsington London , England
November 19 - 20 , 2018

(646) 930-6366

Collection & Recovery Solutions 2019

Resource Management Services, Inc.

10440 Pioneer Bl;vd. #2
Santa Fe Springs , CA
May 08 - 10 , 2019