On Wednesday, April 1, Susan Appel, Unifund Legal Counsel, joined David Sanders of Troutman Sanders for an Receivables Management Association International (RMAI) webinar: Updating Your Policies for COVID-19. In this post, we summarize the key areas covered during the webinar.
IMPORTANT: Please be advised that the information summarized in this post is not intended to be legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case based on the guidance of your own legal counsel.
The COVID-19 pandemic has put an unprecedented strain on every aspect of American life. Wednesday’s webinar focused on the unique issues facing everyone in the collections industry.
The following summary of the webinar also includes links to relevant information concerning each discussion point.
EMPLOYEES WORKING FROM HOME
Every industry faces the challenge of creating new policies to address the fact that most, if not all, employees are now forced to work from home because of Shelter in Place mandates.
The financial sector, and the collections industry in particular, face a unique set of challenges because of the need to protect valuable, personal data and maintain consumer confidentiality. To that end, the webinar stressed the importance of defining company policies with regard to workers staying at home. Questions you need to review include, but are not limited to the following:
- What is your business model and how does is accommodate employees working remotely?
- If your team is required to make calls from home, where will those calls be made to ensure confidentiality?
- If an employee’s home does not have a natural office space, how will the work be handled to ensure consumer confidentiality?
- What is your policy with regard to employees taking documents to and from your office? What is your safety protocol for employees entering the premises for documents? Does the employee have a home shredder if your policies require document shredding?
Many state regulators have relaxed their work-from-home licensing requirements for debt collection agencies. If your state has been cleared in this regard, make sure you keep two things in mind:
- Read the announcements carefully to understand exactly what you can and cannot do.
- Ensure you create and are able to manage proper policies and procedures regarding remote work.
Here’s a critical point to remember: most people accept and understand that we are living through tremendous disruption and anxiety. Nonetheless, that does not provide an excuse for being lax with regard to articulating clearly-defined work-from-home policies. Make sure you create a process that is seamless for consumers and reassures them that they are protected, and you have their best interests in mind.
CYBERSECURITY AND PRIVACY
Not surprisingly, we are seeing an increase in fraud and cyber attacks as criminals look to take advantage of Americans in the grip of fear and uncertainty. To that end, it is critical that you don’t abandon policies and procedures that you currently have in place with regard to cybersecurity. Moreover, it’s important to update those policies to address the new challenges of a COVID-19 environment, most notably, work-from-home policies.
The Cybersecurity and Infrastructure Security Agency (CISA) recently posted Guidance on the Essential Critical Infrastructure Workforce. Here is a link to the full post: https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce
An important point raised in the webinar concerned how the courts might react to a lapse in cybersecurity and security protocols. In the present moment, we can all “accept and understand” the fact that we’re living in unprecedented times. But down the road, the courts will want to know if you had clear policies in place, and may not be very forgiving to firms who were not properly prepared.
SETTLEMENTS AND PAYMENTS
Make sure you are aware of collection policies in your state. Some states have moved to “no collection” status, while others have instituted “deferred payment” policies. Many states have declared a state-of-emergency, which will dictate collection regulations moving forward.
An important question for those in the collections industry is: how do you define “hardship” in the time of COVID-19? You need to review your policies with regard to hardships. You may find that certain situations require a different level of leniency than is typically accepted. In fact, there may be scenarios in which you decide that a consumer’s situation supersedes the need to press ahead with facts.
CREDIT REPORTING
Congress recently passed the Coronavirus Aid, Relief, and Economic Security Act (CARES). This multi-trillion dollar legislation provides sweeping relief to both consumers and businesses of all sizes. Here is the FULL TEXT of the CARES Act.
CARES requires lenders to report to credit bureaus that consumers are current on their loans if their payments are adjusted through a loan modification.
The Consumer Data Industry Association (CDIA) has also updated its guidelines to address COVID-19. These update guidelines build off of existing systems that credit bureau members have had in place to minimize or eliminate the negative credit impact of extreme events, such as a pandemic. Here is a link to the update CDIA guidelines on handling credit issues in the face of COVID-19 disruption: https://www.cdiaonline.org/wp-content/uploads/2020/03/CDIA-NEWS_Coronavirus-The-Credit-Bureaus-Response_3.15.2020.pdf
COMPLAINTS AND DISPUTES
This section of the webinar reiterated important points covered in previous sections, namely:
- Make sure you clearly understand state-specific announcements and policies with regard to collections during the COVID-19 crisis.
- Go out of your way to work with people and be responsive to their situations.
TELEPHONE CONSUMER PROTECTION ACT
The FCC issued a Declaratory Ruling with regard to the TCPA. Specifically, it eased restrictions on automated calling as outlined in the following statement:
“On our own motion, we confirm that certain callers may lawfully make automated calls and send automated text messages to wireless telephone numbers when such calls are necessary to protect the health and safety of citizens pursuant to the TCPA’s “emergency purposes” exception.10 In the Blackboard-Edison Declaratory Ruling, the Commission made clear that automated calls to wireless numbers made necessary by incidents of imminent danger including “health risks” affecting health and safety are made for an emergency purpose and do not require prior express consent to be lawful.”
With regard to non-health emergency calling, including calls related to consumer debt, the ruling said the following:
“In contrast, calls that contain advertising or telemarketing of services do not constitute calls made for an “emergency purpose” (e.g., advertising a commercial grocery delivery service, or selling or promoting health insurance, cleaning services, or home test kits). Calls made to collect debt, even if such debt arises from related health care treatment, are not made for an “emergency purpose,” as those calls are not time-sensitive, do not “affect the health and safety of consumers,” and are not directly related to an imminent health or safety risk.Such debt collection, advertising, or telemarketing automated calls require the prior express consent of the called party.”
Here’s the link to the full text of the Declaratory Ruling: https://docs.fcc.gov/public/attachments/DA-20-318A1.pdf
In addition to the Federal rulings with regard to the TCPA, be sure to review state-level declaratory rulings and regulations.
Unifund and RDS will continue to update this blog with regard to COVID-19 impact on the financial markets in general and collections, in particular.
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