Guys I’m a TCPA lawyer.
Nonetheless I’m famous for creative thinking and solving problems so everyone (apparently) wants the Czar’s take on how collectors and (maybe) servicers or collectors can and should respond to the crazy-important Hunstein ruling.
So here are some thoughts (not legal advice–just musings):
- Build consent provisions into contracts and other debt agreements: Express consent is an exception here. TCPAWorld knows a thing or two about express consent. It can be obtained–especially in the Eleventh–using adhesion terms. Think loss mit, forbearance, credit arrangements, website logins, app disclosures, whatever. Be creative. Doesn’t help with past conduct (or does it?) but this should be a big help moving forward.
- Make sure you understand what vendors you’re using for outreach: Hunstein isn’t limited to demand letters folks. If you’re a collector sharing information with others to help you to collect debt–think outreach platforms and maybe even third-party hosted software platforms–you may be in harm’s way. Inventory your risk. Assess it. Ameliorate or accept as you see fit. But don’t be blind to the scope of this thing.
- Buy your vendors: Should be obvious. Take your vendors. Buy them. Now they’re not third-parties. Simple. (Separately, it might be a good time to be a debt collection solutions start up.)
- Don’t touch consumers in the Eleventh Circuit: Again, straightforward. The Eleventh Circuit case is only binding in the Eleventh Circuit. Other Circuits are unlikely to follow this ruling–especially now that everyone’s dander is up and amicus filings will come pouring in next time.
- Seek En Banc review: Again, pretty obvious. This ruling is pretty whacky. Good chance the Eleventh will take this up and reconsider en banc.
- Do NOT seek SCOTUS review (yet): SCOTUS just ruled in favor of robocallers (Facebook) and scam artists (AMG Capital Management ) in the last few weeks in the name of textualism. DO NOT TAKE THIS CASE TO SCOTUS. SCOTUS will uphold the textualist approach applied here. (i.e. you will lose and the problem will be a nationwide one not a regional one.) If SCOTUS is to review this the review should be limited to the Article III piece (see my article this morning.) A substantive appeal might be safely pursued eventually, but first industry needs to develop positive case law (preferably text based) in other jurisdictions to have a fighting chance.
- Look for test cases in other jurisdictions. Win them: Obvious. Try to develop textualist arguments.
- Legislative fix: The problem started with Congress and should be resolved there. Lobby. Relatedly–stop voting for non-lawyers for Congress. They suck at writing laws since, you know, they’re not lawyers.
- Settle cases or use the class action vehicle to neutralize risk: $500k class action cap folks. Think about it.
- Servicers and creditors should look holistically at state laws: It is axiomatic that some state laws extend certain provisions of the FDCPA to creditors and first-party servicing. But they are not monolithic. This ruling won’t hurt servicers or creditors the way it will hurt collectors. So don’t freak out unnecessarily. Freak out intelligently and start inventorying the laws that might actually apply to you.
- Chat with regulators. I have serious doubts that the CFPB or any other regulator is going to get on board with this industry-crippling ruling. But you should give them a call to make sure.
Always here to discuss. As the Czar of one whacky world to the inhabitants of another– stay safe out there FDCPAWorld.