Supreme Court Excludes Debt Buyers From FDCPA

Supreme Court Case Explains Debt Buyers Are Not Debt Collectors Under FDCPA
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Valor Intelligent Processing

Debt Buyers Treated As Creditors for FDCPA

bottom line 6 12 2In this week's issue of The Bottom Line, a verdict has been delt in the Henson v. Santander Consumer USA. Debt buyers are now treated as the creditors of the debt in question in the eyes of the FDCPA. Learn more about this important case and others at

Supreme Court Case Explains Debt Buyers Are Not Debt Collectors Under FDCPA

The Supreme Court unanimously ruled this week on an FDCPA case expected to have a major impact on debt buyers. The Court ruled that the FDCPA, enacted by Congress in 1977, does not apply to debt collection practices of a debt buyer who buys defaulted loans from a creditor.

The plaintiffs in the case of Henson v. Santander Consumer USA were four Maryland residents who defaulted on their auto loans. They sued Santander in 2012 for predatory collection practices including bypassing debtors' lawyers. But because Santander owned the debt and was servicing it, the court said Santander and companies like them couldn’t be sued under FDCPA.

The Citicorp auto loans was sold to Santander, a Dallas-based vehicle-financing and lending company owned in part by a subsidiary of Banco Santander (SAN.MC), the euro zone's second-largest bank by market value.

The 4th U.S. Circuit Court of Appeals in Richmond, Virginia threw out the lawsuit previously saying the law applied only to debt collectors, and Santander became a creditor when it purchased the loans.

The case hinged on the definitions of “creditor” and “debt collector” and whether a company that buys debt should be treated as a creditor and therefore not subject to the law.

Preventing Cracks In Your Compliance Management System

ciskey debra jIn 2016, the CFPB celebrated its fifth birthday; half a decade; more than 1,500 employees; more than a million complaints in the complaint database. The CFPB is now finding its way in a new administration and fighting challenges to its organization and very existence. Some of the expectations of the bureau cost us money.

Some expectations make us better. Some of them are foundational and help us create a positive culture. We are thinking more about compliance every day. A robust compliance management system (CMS) is the foundation and driver for our daily compliance efforts. Five years since the birth of the CFPB is a good time to examine our foundation, check for cracks and fill in gaps in the basic structure. Let’s look at foundational elements of a CMS.

Document Solid Policies and Procedures

This is the rebar that provides stability and structure for your foundation. Think about your processes, from initial interaction with the customer through closing the deal. If you have expectations about the content of interactions, write scripts and memorialize them in a policy. If verbal disclosures are required, include them in a script and memorialize them in a policy. If particular behaviors are prohibited, memorialize them in a policy. Policies should reference applicable laws, rules, or regulations – federal, state, and local if you have them.

Policies Should Be Organized

Organized documents are easier to find and use. Policies should be useful and they should be used. You can structure your policies as you see fit for your organization. The following structure is commonly used:

1. Purpose: Generally, what does the policy seek to require or prohibit?
2. Scope: Who does it apply to?
3. Implementation: Who is responsible for implementation of the policy?
4. Training: How and when is training provided on the policy?
5. Policy: State the policy.
6. Procedure: Step by step process required to perform the task the policy requires.
7. Records: Where would records be found that shows the policy was followed?
8. Definitions: Define any relevant terms
9. Reference documents: Provide citations for law, rule or regulation with which the policy seeks to comply.

Provide training on policies and procedures and document proficiency in knowledge and performance. When you write policies and procedures, you should be thinking about how you are going to test for proficiency in knowledge and performance of the policy. Start with the end in mind. How will people demonstrate on the job that they know, understand and are applying the policy in the day-to-day performance of their jobs?

Make your training behavior-based by including information related to required and prohibited behaviors. Train from the perspective that asks, “What do I want people to do related to this policy, and how will I know they are doing it?” If your people can quote your policies chapter and verse, but don’t understand the behaviors that are required of them by the policies, the policies are not meaningful. Training should include the “why” – what are we trying to comply with? Help your folks by including examples, scripts, and detailed work instructions.

Design training for staff around meaningful information. For example, pick the top five areas people fail the most, in aggregate, on compliance audits. Design training that explains the what, how and why. Make it behavior based – what am I supposed to do – or stop doing? How would I do that, and why do I have to do it that way? Provide legal citations and applicable examples from lawsuits and enforcement actions to help with understanding about the why. If you take something away from collectors, give them two things with which to replace it. This assures staff are not working in a vacuum, leaving them to figure it out along the way.

You can have the strongest policies and the best training, but you may still receive complaints. Respond to consumer complaints, every one, every time. Consumer complaints can be considered a test of how well our policies and procedures are working. Not only should we respond to complaints but take corrective action when warranted. Corrective action is defined broadly, and if you think about what caused the complaint to occur, the corrective action necessary can be immediately evident. Don’t stop there – analyze your complaint data. Use the categories the CFPB uses to categorize your complaints. Look for the root causes. Use your team to help you pinpoint solutions to the problems that may be identified by complaints. Your analysis of complaints will show you exactly what is needed – follow up training, coaching or disciplinary action.

Complaints or no complaints, audit all processes for compliance with policies and legal requirements. Many processes are transparent to consumers and a breakdown in compliance may not stimulate consumer complaints, yet these processes can be key to the successful operation of our businesses.

Take corrective action when it is warranted. Provide remedial training and write ups. Get rid of the bad apples. They are your best collectors? Bite the apple and let them go if they can’t change their behavior to conform with the behaviors your policies mandate. Do not hesitate to eject people who intentionally resist.

It’s not easy. Nothing worthwhile ever is. However, developing a good foundation allows you to grow and provides support for subsequent additions – new clients, more staff. Maintain your foundation to prevent cracks in your compliance performance. Every minute you spend fixing a problem that could have been prevented is a minute you can’t use to grow your future and reach your goals.

Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.

Key Search Engines of the Invisible Web

mug brownIn this issue, we will once again continue to explore the web data provided by several websites located on what is commonly referred to as the “invisible web.” As I previously stated, these sites are certainly not your “beginner” or “skip guesser” sites. Most of them require certain advanced skills to manipulate, massage and extract data. For the professional tracer to obtain the desired information needed to complete their searches, it is imperative they possess the required skills and a thorough understanding of “exact data extraction techniques.” I have visited and conducted searches on each of these sites to ensure they are working and functional as of February 16.

I have had several inquiries from readers regarding a source of more detailed information related to the invisible web. For those of you interested in delving deeper into this fascinating subject, I would recommend the purchase of The Invisible Web: Uncovering Information Sources Search Engines Can’t See, by Gary Price and Chris Sherman. This publication provides the key to finding these hidden resources by identifying how to uncover and use invisible web resources, mapping the invisible web, when and how to use it, assessing the validity of the information, and the future of web searching.

With that out of the way, let’s look at a few of the search engines available which I feel will prove to be valuable to the professional tracer/cyber tracker.

Your typical search engine’s primary job is to locate the surface sites and downloads that make up much of the web as we know it. These searches find an array of HTML documents, video and audio files and, essentially, any content that is heavily linked to or shared online. Often, these engines, Google chief among them, will find and organize this diversity of content every time you search.

The search engines that deliver results from the invisible web are distinctly different. Narrower in scope, these deep web engines tend to access only a single type of data. This is because each type of data has the potential to offer up an outrageous number of results. An inexact deep web search would quickly turn into a needle in a haystack. That’s why deep web searches tend to be more thoughtful in their initial query requirements. Below are a few more popular invisible web search engines:

• Yippy ( is a meta search engine developed by Vivísimo that not only combines data from a variety of different source documents, but also creates “clustered” responses, automatically sorting by category. I will enter a person’s name and last known residence and retrieve a large volume of Internet sites with information related to the subject of my query.

• SurfWax ( is a metasearch engine that offers “practical tools for Dynamic Search Navigation.” It offers the option of grabbing results from multiple search engines at the same time, or even designing “SearchSets,” which are individualized groups of sources that can be used over and over in searches.

Now we will look at several subject specific search engines. A subject specific search engine or data site can pool together some mainstream, and not so mainstream databases, dedicated to fields and areas of interest. When I am looking for a person who is involved in a specific industry or area of interest, I find these data sources to be an invaluable tool. While only a handful of these tools can surface deep web materials, all the search engines and collections I have listed are powerful, extensive bodies of work. Many of the resources these tools surface would likely be overlooked if the same query were made on one of the mainstream engines most tracers fall back on, like Bing, Yahoo and even Google.

• - I utilize this site when searching for anyone in the art world. It is up to date and tracks the latest news and artists in the industry.

• - This is the national site for the Better Business Bureau (BBB). I use their information system search to locate the details of ratings, consumer experience, government action and more of both BBB accredited and non-accredited businesses.

• - This is a business publications search engine. They offer more than 200 free subscriptions to business and trade publications and the site is very useful when obtaining information related to commercial accounts.

I hope these sites are helpful to you in your tracing endeavors. In the next issue we will take a close look at some open law enforcement and regulatory sites that help successful tracers locate missing people and assets. Until then good luck and good hunting.

Ron Brown is a member of the National Association of Fraud Investigators and the author of “MANHUNT: The Book.” Contact him at

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 may june 2017
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