A full breakdown of 2021 in the ARM industry

2021 has been an extremely active and unusual year for case law, regulatory developments, and M&A activity in the ARM industry. Here is my “year in review” for what was nothing less than a grueling year.

Case law

Facebook vs. Deguid

After years of uncertainty over what an autodialer should be, the Supreme Court has finally put this to bed. Kind of. The court determined that “to be considered an automatic telephone numbering system under the Consumer Telephone Protection Act (TCPA), a device must have the capability of either storing a number using a random or sequential number generator, either to produce a number using a or sequential generator. It was great, except the famous Footnote 7 included an example with a significant nuance that suggests that an automatic dialer might still qualify if it uses a random generator to determine the order in which to call the numbers. from a pre-produced list. So the TCPA litigation continues, just in a different form.

Hunstein v. Preferred Collection & Management Services

The mother of all cases affecting the industry this year, Hunstein v. Preferred Collection & Management Services came out of nowhere. The gist of this case is that the 11th Circuit said it was a violation of third party disclosure under the Fair Det Collection Practices Act (FDCPA) to send consumer data to a letter provider for the purpose of producing collection notices. And, there has been a flood of filed copy cases across the country. Of course, in addition to letter sellers, the concern was that this claim should extend to all types of sellers who are experts in providing specialist services.

We have covered many of Hunstein’s developments during this year. From initial decision to the substitution notice, on the eleventh circuit decision to overturn the original decision, to the decision to consider upright It was only during the bench hearing that this case aroused much interest in the ARM industry for obvious reasons. While the bench hearing will take place in February 2022, the court’s direction on factums focusing only on standing means that, if the case is dismissed on the basis of standing in federal courts , the same premise could continue to be used in state courts. The overall outcome of this case remains to be seen, but the impact appears to be less than initially feared.

TransUnion v. Ramirez

Exceptionally, this was a second Supreme Court case in the same year that had an impact on the collection industry. This one concerned the standing position and gives us “No concrete harm, no standing position”.

As Hunstein and TransUnion deal with fundamentally different issues, they are increasingly intertwined in deciding where and whether a consumer can file a complaint for an alleged “Hunstein” violation, as concrete harm is unlikely to come. of a company sharing data with a 3rd party such as a letter seller.

Mayhall v. MRS BPO

If the above cases weren’t there, this one would likely get a lot more attention. As we all know, a collector should verify the identity of a consumer before revealing the existence of a debt to make sure he has the correct part. This ‘who comes first’ conundrum is something that we have come up with a lot with regulators and advocates over the past few years. This case established that a collector had not violated the FDCPA by claiming that it was a “financial services company” calling about a “personal matter”.

Two important things about this particular case are 1) the court looked at the whole situation and recognized the “stuck between a rock and a hard place” situation for the collector and 2) it emphasizes how great it is. critical is to have comprehensive policies and procedures in writing and – most important – followed. Footnote 9 of the decision sets out MRS’s procedures, which follow the FDCPA perfectly, and the recording of the appeals provides evidence that the procedures were followed. It is likely that this matter will become important in the context of the implementation of Reg F.

Regulatory developments


Federally, the leadership of the CFPB has changed twice this year, as Kathy Kraninger, appointed by former President Trump, was sacked (courtesy of another Supreme Court ruling) and Dave Uejio stepped in. . Then, the choice of President Biden, Rohit Chopra, was finally confirmed and taken over.

These transitions have added to the prolonged uncertainty surrounding the debt collection rule. We all thought the release of Regulation F was imminent under Director Cordray at the end of 2016, before it was put on hold when he left and announced he would run for governor of Ohio. Although the final rule was released in October 2020, the actual implementation date, or whether it would go into effect, was uncertain until 2021. As we now know, Richard Cordray failed to secure the governorship, however, it has been occupied and has recently resurfaced as President Biden’s choice to lead federal student aid to the Department of Education.

Federal student loan collections

I covered the multi-year litigation regarding the large PCA contract, which ended in July 2019 when the Federal Claims Court closed the door on large collection agencies. This left the contract in the hands of smaller agencies, with the education department threatening that PCAs’ days would be numbered as it would move to a different service model under its NextGen system.

Then, the pandemic resulted in a 2-year moratorium on interest and payments on federal student loans and banned outreach to collectors. This essentially forced some of the few remaining collectors to close their doors.

Last month I was told that FSA had met with these private collection companies and recalled all remaining accounts. And with that, we’ve since seen the definitive demise of the federal long-term debt collection program for student loans (at least as we’ve learned).

Regulation F

Without dwelling on it, we can say that 2021 was the year of reading and implementing Reg F. The CFPB has published a series of FAQs on the message with limited content and more general orientation throughout 2021, as well as providing the Spanish model validation notice in October 2021. Of course, that story is still being written, and the coming year will reveal the impacts on businesses and consumers of some of the important provisions like the 7 of 7 and the ability to communicate electronically. .



Remember robocalls, call blocking, and call tagging? It was a major concern in 2018-19 before the pandemic overshadowed everything else. Well, the STIR / SHAKEN component of the Pallone-Thune TRACED 2019 law came into effect on July 1, 2021.

STIR / SHAKEN is a framework for verifying the point of origin of a call so that it can be traced back to its point of origin, in the event of discovery of illegal activity related to the use of a phone number. This should reduce the problem of identity theft. Now “know your customer” meets the telecommunications industry, because we need to know any entity that generates, facilitates or terminates call traffic. Enter the notion of “attestation”. Attestation is essentially the level of confidence that an operator has in the origin of the call that he transmits.

But who can attest? Who can be trusted to say that this caller is who they say they are? We are very familiar with verifying the identity of a consumer. Robocalling introduced the need to verify the identity of entities in the telecommunications world, just as it exists in banking. I think we’ll hear a lot more about this in 2022. The bottom line is that, even with STIR / SHAKEN, AI-powered reputation scans will continue to play a key role in call delivery.

Reassigned numbers database

The long awaited FCC Reallocated Number Database finally launched. However, for privacy reasons, the database only includes two data points: cell phone number and reassignment dates. Basically, this means that the database can be used to identify reassigned numbers, but not the wrong numbers. It also introduces a new data point to track: the last good date. I’m sure 2022 will bring a variety of discussions around this topic.

State level developments

Remote work

When we were all sent home from the pandemic in March 2020, many states issued emergency orders to allow collectors to work remotely. As these orders have expired, many have remained pending. In 2021, Maryland, Minnesota, and Connecticut all issued standing or long-term guidelines for continuing to work remotely, but (like many other things) this practice still faces a patchwork of rules. across the country. It’s also worth noting that Minnesota announced this year that debt buyers will now need a license, with applications due by January 1, 2022.


The Governor of California approved both the State Debt Collection Licensing Act and its Consumer Financial Protection Act in the fall of 2020 (the deadline for submitting license applications is December 31, 2021). And, the California mini-CFPB open to the public on January 4, 2021,

Medical collections in Maryland, Nevada and New Mexico

New state laws came into effect this year in Maryland, Nevada and New Mexico. Notably, Nevada enacted a law requiring (among other things) a 60-day notification period before the start of collections. The notice must be sent by registered letter and voluntary payments can only be accepted during this window if the consumer has been advised that he does not have to pay. There is an ongoing trial and many questions remain open about this law.

New York

Not to be outdone, New York has introduced another difficult (if not impossible) to implement disclosure required. Debt collectors are to provide new disclosure on initial requests sent to New York consumers, allowing them to request communications in alternate formats such as large print, braille or audio CD.

Mergers and Acquisitions

2021 has been a year of significant M&A activity, especially among technology companies. These are just a few highlights. I have no doubt that the Reg F and other forces driving the need to implement digital strategies will cause this trend to continue in 2022.

All that being said (and wow, that was a lot), if anyone wants to pray to the legal and regulatory gods for a quiet year in 2022, I wouldn’t complain.

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