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Hello everyone and welcome to Taking the Stress Out of Emailing and Texting Consumers: A Primer for Debt Collectors Webinar. My name is Dawn Updike, I am the Marketing Manager at PDCflow. If you are not familiar with PDCflow, we are software company. We provide a robust payment hub for Accounts Receivable teams to send secure electronic documents and payment forms from email and text. With PDCflow software your collection teams can collect payments faster while keeping your data safe. Before we get started with the presentation I have a few items to go over with you. First, the information presented is not legal advice. We are a software company and are providing today's content for informational purposes. As always you should consult with your own attorney to obtain specific advice for your company's compliance legal or regulatory needs. We have a lot of information to share with you today which will probably take up the hour, so if you do have questions we encourage you to put them in the Q&A box or you can email them to me at Dawn@PDCflow.com. My email will be on the last slide if you didn't catch it. We do plan to follow up with all attendees with today's recording, the slide deck, and we hope to address the questions that come in. Our panelists and experts today are Joann Needleman of Clark Hill Law. Joann is an industry advocate and navigator to her clients seeking advice and guidance and the complex regulatory environment facing the financial services industry today. She provides counsel, consultation, and litigation services to a wide array of financial institutions, law firms, and debt buyers. She is a former member of the Consumer Financial Protection Bureau Consumer Advisory Bboard and has provided her clients with useful strategies to prepare for new areas of regulation specifically in the alternative lending and fin-tech space. John Bedard is the managing attorney at the Bedard Law Group located in Atlanta, Georgia. He represents creditors, asset buyers, and debt collectors helping them stay in compliance with state and federal laws. He manages the nationwide litigation for several collection agencies and focuses his litigation practice on FDCPA, TCPA, and FRCA defense. His practice also focuses on defending regulatory actions including CFPB investigations and he travels the country performing CFPB readiness assessments for the collection industry. We also have John Chebat. He is the owner of Occupational Management Group located in Buffalo, New York. His agency uses PDCflow software through an API integration with Blue Chip Account Management software. Through this integration, his team of 120 collectors uses text messaging to obtain signatures on both one-time and recurring payment schedules reducing chargebacks and keeping his agency in compliance. I want to thank each of the panelists for their time today and I will let them go ahead and get started. Thank You Dawn and welcome everybody. Good afternoon and I have to say I'm a lucky girl that I get to be on a webinar with Jon Bedard and John Chebat today. So guys thank you so much for joining us and we were really looking forward to this discussion and I'm thrilled that there are so many people who are joining us because this is such an important topic and it's something that we've all been wanting to embrace for a very very long time, and I think last May the CFPB kind of gave us, I don't want to say green light, but certainly a little bit of an easy path to start looking into email and text and using it as a better way to communicate with consumers. And certainly as John is going to talk about really a more effective way to speak with consumers. So if the or kind of on the fence about email and text and where it's going to go. We want to give you some interesting data that we came across in preparing for this webinar. There's a company called twilio. I think all of you may be familiar with that and this number of 2500 global consumers prefer email and text, that is really about, they interviewed, the survey was 2,500 people. All 2,500 people that they did for the survey said that they would absolutely prefer email and text. Now granted that's a sample size of the world's population, but it's unusual to get 100% response on something like that. So clearly email and text is how consumers want to communicate. Think about your day. Is there a moment in time where you are not looking at your phone? You're not looking at your bank account? You're not ordering something on Amazon? you're not getting a text from you know maybe your car's in the shop and they're telling you now it's ready to be picked up. These are the channels at this moment of time that consumers prefer. Now there may be others in the future, but right now this is where the communication is going. EZ-Text, which is another company that you may all be familiar with also did a report called, I'm sorry Dawn. I'm looking at my my slide deck too. So this slide it's talking about the EZ-text 2019 mobile usage report and I thought this is really interesting in case you were concerned about you know how effective is email and text. Well, as far as texting goes six times the engagement of email, so whether you're thinking should I do either or texting seems to be the mode of communication that consumers respond to six times greater than they would say for an email. I think that also depends on the type of text or the type of email that you're sending, but this is what this report says. I thought this was also very interest the texts have a hundred percent open rate so if you get a text, it's 100 percent likely that that text will be read. Now you certainly can't say that about the voicemails that you leave at a consumers home or we're somewhere else. You certainly have no way of knowing whether a letter that you sent to a consumer is even opened, so I think that was a very interesting data point. And even though consumers are opening them a hundred percent of the time, ninety percent of the text that consumers receive are not only open but they're read within 30 minutes of receipt. I think that speaks to also how consumers use their phones. You know, mine sitting right here plugged in. Unfortunately the other day I went to the Train and I forgot my phone, and I freaked out and how to run help I go get my phone because God forbid I should not have my phone next to me 24/7 like everybody else. The phone is something that is attached to a consumers hand and obviously when they see a text they're going to read it in a very short period time. Hey Joann, this is this is John Bedard. I'm fascinated by these numbers because the penetration rates on these numbers are just staggering. But I think these numbers warrant thinking about communications differently with consumers because we as an industry are so used to abysmal penetration rates that we have taken a volume approach in some circumstances to communicating with consumers. And so if we know we have very very low penetration rates on letters. If we know we have very, very low penetration rates on call attempts and telephone calls. What that has resulted in is what I'll describe as a less than surgical effort to really maximize the efficiency of those communication channels. But when I see penetration rates at this level, it makes me step back a minute and say holy cow! If I can be almost 100% certain that a consumer is going to receive my communication and that they're going to receive it within 30 minutes of me sending it. I'm going to be extremely surgical about the content of that message and the number of messages that I send to that consumer because the penetration rates are just so dramatically different than these traditional communication channels that we have been used to for decades. It really makes me approach from a different perspective how to utilize these channels in ways that continue to maintain the user acceptance of these channels without sort of polluting them with the kind of volume that we are expecting to need in order to get the same kind of penetration. This is why we have you on the webinar, John. Thank you. you're absolutely right and I think it goes to the concerns that we've seen certainly when the NPR came out on this issue of their proposals to limit the amount of telephone calls that debt collectors can make to consumers, but allowing email and text to be unlimited. And to your point, I think the thinking behind that, at least I hope the thinking behind that is as you say we can be a lot more strategic in our communications in email and text because they're being read. And if they're being read the likelihood of the consumer acting upon it even if it means don't call me anymore or don't text me anymore. At least you've established an engagement, and that's going to be the most important thing that these alternative channels can do for your ability to communicate with consumers. It's that engagement. We were not having to your point it's the penetration and the ability to establish a communication channel with consumers. These alternative methods are now going to allow you to do it and in a really productive way. So thank you for pointing that out. You're absolutely correct. I think it's also important everybody has been saying that well you know these channels are only for Millennials. Well, they're not. I'm a Boomer and I'm using it all the time and even think that they are using it so there is no necessarily dominant age group that is preferring one channel or the other which i think is great. I think everybody is and maybe our older generation have been less quick to adapt it, but it seems to me as we're heading into the 2020s, everybody is adapting it. So you have a whole population of potential consumers with which to engage. All right so let's look at some email statistics.There's a lot of people using email. They're using it more maybe than social media which i think is understandable not everybody or big social media fans, but the numbers are still high. According to the Radicati Group, 3.9 billion people are using email as opposed to 3.5 billion just using social media. So that's pretty high. The average American worker gets a hundred and twenty-five emails a day. That's a lot. Something to think about to John's point when you're talking about strategy in the email space you've got a lot of competition, so be careful about how you're emailing people. The open rates as we've seen or not as high as they necessarily would be for text, so you need to make that email something that a consumer not only wants to receive but wants to read as well. As opposed to text messaging only sixty percent well in this particular survey and report 60% of emails will be opened on a mobile phone. Well that's true because we all have our mobile phones in our hand. That's a fairly high number. In 2019 there were 293 billion emails sent and received and that forecast is to grow the 347 billion by 2023. So email occupies a huge space in these type of communication channels. Joann I don't think anybody on this call has difficulty believing any of these numbers especially when it comes to how many emails they get in a day and how many emails they may check on their on their mobile device or their cell phones. When I look at the way, when I look at my own behavior when it comes to checking email and where I check it and how I create them. I think to myself you know the first five words of a subject line and the source like the from person you know whatever it says in the from field those are the things that get my attention and it's amazing on how when we look at our inbox or we look at our mobile device how we immediately triage messages. When I think about the importance of precision when it comes to communicating by email. In order to compete like you just described with you know the other hundred and twenty four messages that you get in a day. It really makes me think about how we can use precision in a collection strategy a whole lot better than we might do it now. You know you raise a really good point John and that is competition. How you try to drill down to make sure who is from. You know one of the things that I think we all need to be cognizant off when we're talking about text and email is unfortunately this has also opened the door for bad actors to come into this space. It is really, really important especially if you're starting an engagement with a consumer through text and email that they feel comfortable because they don't know who you are. And you're getting 125 plus emails a day from everybody in their brother. Not necessarily the you know people that you do have established relationships with, so it's really important to think about for the folks on the phone that when you start using these types of channels that you build a rapport that there's a trust. I think John Chebat is going to really talk about this and how the process that he uses really builds a sense of trust between the consumer and the debt collector. It is going to be so vitally important. I say this I said this a couple times in talking about the future of email and tax and how we're going to use that. Remember when we all started to do online banking? That was a nightmare. It took me forever to pay my bills. I didn't understand how to check my balance. Now we do it every day because we feel comfortable with it and we feel secure with it. So keep in mind as you start to establish these programs of text and email what can you do, not only you're going to have a lot of competition, but to ensure the consumer that you're legitimate. They're not being scammed. They're not being hacked. Your processes are such that they can feel comfortable to communicate with you without causing them any additional harm. So I point that out. All right, so we've kind of talked about you know these channels are here to stay. This is what the world is using. So what laws govern email in text? Well, with email there is a lot of them out for fairly long time called Can-spam, which has the FTC has the jurisdiction over. That really has a lot to do with promotional emails that you get, but the most important aspect of can spam is this opt out, unsubscribe. You'll see if you get an email from someone that you haven't promotional email maybe you shopped at a store and you gave them their in your email address and they're sending you an email about a sale coming up or they continue to send you emails at the bottom of that email there'll be an unsubscribe button. So you know like as we've seen with opt-out unsubscribe that is nothing new so that is where can spam is really the one of the first laws that has addressed that. Obviously we want to look at TCPA especially for text because we know that a text is a call to the extent that you have some sort of a ATDS within your agency or your firm. That will be sending out mass texts you've got to keep the TCPA in mind. Certainly if you are communicating with consumers about a debt, we cannot forget about the FDCPA. And we are talking about when we talk about medical debts and if you are an agency that deals in medical debt. You have to with email and text have to be very concerned about HIPAA. And requirements that you are not disclosing medical information to third parties and keeping that information secure. Let's get the next slide. Okay I am going to turn it to you John and talk about how regulators are enforcing these laws and looking at electronic communication.Thank you. This is John Bedard. You know who there are a lot of government regulators that have their hand in this electronic communication cookie jar so to speak. Not the least of which are the ones that you see on this slide right here. They all regulate some portion of the electronic communication. I'll call it the marketplace so to speak. And everybody on this call is familiar with the CFPB, I mean every one of these actually, maybe not the CTIA, but the CFPB and more specifically the CFPB's proposed rule that we got last year from them which talks all about and is focused primarily on you know the CFPB's expectations when it comes to communicating with consumers electronically. Not just by email but also by text messaging. That is not the law today it may become the law in the next year or so. But that rule sets out the CFPB's expectations on how debt collectors can communicate with consumers using electronic communication channels in ways that the CFPB think meet the needs of consumers. Of course the Federal Communications Commission you know they have regulatory authority over the Telephone Consumer Protection Act and when it comes to sending text messages to consumers not only are you invoking the authority of the CFPB to regulate you know the content and the method in the mode of you communicating with them but when you start to use telephones and technically cell phones to communicate with consumers. You're also triggering the jurisdiction of the FCC in order to be able to regulate that behavior. And then we've got the Federal Trade Commission who of course nobody is unfamiliar with on this phone who also has sort of concurrent, shares jurisdiction with the CFPB over consumer financial protection laws and may take enforcement actions just like just like the CFPB the only thing that the FTC does not have at this point is authority to make the rules for the collection industry like the CFPB does. But nonetheless you can still be the subject of an investigation by the FTC and you can still be the object of an enforcement action by the FTC. So they are very much involved in the regulation of these communication channels. Then finally the cellular telecommunications industry association. That is not a government entity, but instead that is a private entity, a self regulatory entity. If you are a member of the cellular telecommunications industry association then you are making a promise to your fellow members, to the group and to everybody else who recognizes the CTIA, that you are going to follow their standards when it comes to using cell phones and telecommunication services. Particularly with respect to sending text messages in the context of our discussion today. That is a you're not going to you know get a nasty gram from any of these other government regulators if you're not following those rules but what you do risk is you know sort of being voted off the island here and not being allowed to enjoy your membership of that association if you don't follow their rules. They've created guidelines that they publish in order to guide industry on what they believe best practices are. Not only for senders but recipients as well. That's who the CTIA is. Joann, I actually added as I was taking notes today in preparation for the call. I've added one other one and that is the Department of Health and Human Services because when it does come to HIPAA, when it comes to medical debt, and protected health information and compliance with security standards and the protection of medical data and information then you know Department of Health and Human Services is right up there along with the other federal regulators that have authority to regulate all of that. There may shoot there may be more here don't mean we haven't even mentioned sort of state regulators that I'll get involved here right but suffice it to say that there's a lot of people in the government that are looking over our shoulders when it comes to how we communicate with consumers electronically. I think you're right, John. One thing another point I want to make about the CTIA. That Association also is responsible for leasing shortcodes. If you're not familiar with a shortcode, if you ever get a text and it says text stop to not receive text messages or text join or text chat or text help. All those codes are leased by the CTIA so they have a lot of power there. So if you don't use those short codes correctly, if you don't follow their guidelines correctly, they will no longer lease those short codes to you. While they don't have the power of a regulator to enforce and make rules they do have a power to regulate commerce. Let's put it that way. so its interesting, you should follow, if you are doing texting you should keep a copy of their best practices within your documents. It's not very long. It's not going to say they're very well written but it you should stay on top of what the CTIA is doing and they're constantly evolving which is nice because they are not a federal regulator and have to answer to anybody. So they can be a little bit more nimble. Okay let's go to the next slide. Just as a quick refresher for debt collection an email communication is a writing and it must comply with all written correspondent requirements. We kind of put this in there just to kind of give you a frame of reference so when you are emailing, that is a writing. The CFPB in its NPR has acknowledged that it is a writing, so to the extent that you are collecting a debt and using email all the requirements of the FTCPA in some respects need to be there. So keep that in mind. For texting, as we stated before a text is a call. The FCC has said that already so you need to comply with the TCPA if you're sending in an ATDS. A text can also be a writing, so if you are texting to collect a debt requirements of the FDCPA need to be there which raises the question do I have to put many Miranda things like that the answer is yes and we're going to talk about that in a minute. Okay, next slide. John Bedard let's talk about getting consent for email now that we have gotten everybody excited that we need to be doing emails. Now we want to start putting an email process together. When I speak with clients for people who want to start an email program obviously you just don't you know unlike letters that you could just put in the mail and send out you don't need consent. Before you send an email out it would be appropriate to get consent from the consumer before you do that. Certainly that's what the CFPB wants you to do in the NPR. Right now I will say there is nothing that prevents you from sending an email to a consumer. You could potentially do that although some states do require consent before you do that. It's probably a good idea as we said because of the high volume emails that consumers are getting and also it provides a sense of legitimacy. Here's what I like Joann. I ask clients to consider consent for what? Right? Because when I talk to clients about beginning an email program in their offices. I don't just stop at the consent to use the email channel. Right? Because I think it's important for everybody to understand what it is we're asking for consent for. So yes, we hear about all the time okay let's get consent to send email and Joann was absolutely right. There isn't actually a rule in the FDCPA that says you must first have consent from the consumer before you can send the consumer an email. It doesn't say that. Now, we are seeing states begin to pass some of those rules now but let's set state rules aside for a moment. Using the channel itself is I like the idea of getting the consent for a whole host of reasons. The law isn't necessarily that at the top of that list of reasons. But one of the things that I also encourage clients to do when they're obtaining that consent is getting consent to communicate with anybody else who may be the recipient of one of those emails. It's really the third party disclosure that I'm trying to avoid when I'm securing consent from a consumer to communicate with them using the email channel. So I would I really like to ask clients to consider language in however it is they obtain their consent and we're going to talk about that here in a moment. Language that would of that would immunize a debt collector from having that email read by somebody other than the consumer to the extent that consumer you know shares an email address with somebody else or you know it gives access to that email to somebody else. I really want to avoid the unauthorized third party disclosure. When I think about consent I think about it in terms of the channel but I also think about it in terms of everybody else I want permission to communicate with by email to the extent they're going to be opening the emails that I sent. It's a great point John. Again it goes to the legitimacy, so they say I just want payment reminders or just you know maybe just communication regarding the debt balance information they know when they get that email that it's coming, it's a legitimate source, so it kind of drills down a little bit and protects both the debt collector and the consumer. I should say more maintains that engagement but it's important but it really gives confidence I think to the consumer to know that when the emails come they're coming for a particular reason as they said they wanted them so I think that's an excellent point. We're going to touch a little bit I don't want to get too deep onto the issue with ESign because I think the issue of ESign is very, very, very much in the air when it comes to debt collection. But to the extent that you would be sending some sort of writing requirement or if you just want to ensure that a writing that you are being sent that needs to be signed by the consumer has the force of effect of that signature then you may want to consider getting Esign. We're not going to spend a whole lot of time about what it means and what you need to have in order to accept Esign, but it's something that you need to consider especially if you're doing email. Be really cautious when you are getting consent for email and this goes to John's point. What are you sending? What types of communication or information will you be sending? I would necessarily agree or disagree to do that and immunizing from third-party disclosure, but also ensuring that in getting this information from the consumer that the email address they will be sending information to is not a work email address. Unless they consent to do that. That was a big topic in the NPR. It's a big issue with advocates about consumers getting emails at their work address because we know your work email is not necessarily a private email. There are your employers, your supervisors, your managers which would hypothetically have access to that. So that could be a potential third party disclosure. As we said before you're going to need some sort of opt-out or unsubscribe which they can spam requirement. So what should the email say? Obviously you want to put the name of the consumer. You want to say who you are, but be careful of using some sort of term of debt collection in that name. I would also recommend that you use the true name of your agency. You may internally refer to your company as a different name. Maybe you shorten it, but for the consumer to know who you are, to know that you're illegitimate, you would want to use the true name of your agency. Your subject line should say the name of the creditor, the purpose of an email, the purpose of the email and an account number. Possibly a semi redacted account number so that the full account number is not in there in case there is some sort of hack or third party disclosure. The body of the email may have the full mini Miranda, a possible link to a payment portal or an agency website. I can't stress enough how important getting a consumer to your agency website is vitally important. That will help in it with additional consent to email, helping consumers set their preferences about how they want to talk to you. That is I think really important information that you should put in your email. Again as we've said before with every email an opt-out or an unsubscribe option. John, anything to add that I've missed in the content section? If the CFPB has its way, you may also be including language inviting consumers to contact the CFPB if they weren't happy with your their experience with your company. I'm sorry to be chuckling about that but it's so preposterous that I just that I just sort of chuckle about it. But it is that is not far-fetched. And the Bureau in the proposal that they have made have proposed requiring language in certain electronic communications that direct consumers to the CFPB for you know additional information. They've even included that in their form what we refer to as the validation notice but the initial communication with the consumer they they've proposed that as well. And so I'm sure they've gotten a lot of feedback on on that content, but there there may be some additional bullet points here that we might be required to include in our emails based upon what the CFPB ends up finally publishing as a final rule. I think you were right. So we talked about you know what consent would would look like. What we would include in an e-mail, but maybe there should have been a couple slides ahead but how do we actually obtain that consent? I mean, can there be too sent when you send out maybe your initial demand letter by mail? That has an opportunity for the consumer again to log on to a website and then they consent to be obtained there. Can you obtain consent through a phone call? Absolutely. If you are lucky enough to get a consumer on the phone you can ask them. Can we can we send you emails? If they say yes, obviously, hopefully you have a mechanism within your agency to record that call and to document that consent. That can be a way in which you can start that whole email process. So there is a couple different avenues to get that consent. Again, we want to confirm the non-work email address. As John said again you may want to provide some oral disclosures if you're on the phone with the consumer to confirm. Is it enough to say can we send an email they say yes. Maybe you want to elaborate a little more. Thank you for allowing us to to consent to email this is just confirming that we will be able to email you at this address at this time. We want to maybe send you another email which confirms that we just had this conversation and put maybe some disclosures in there. So you want to always want to make sure that you have enough backup to ensure that the that because the consumer consented to the email. As I said we may want to send a confirming email or a link and there may be issues of Esign again. When you're on the phone with consumer to maybe get that Esign consent. Thank you for allowing us to email you may we send you a link? Please click on the link and answer some questions and read some various disclosures. If you do that then we'll be able to send you legal documents through email. That might be a way to provide Esign. In addition to the various Esign disclosures that you also have to provide. So there are, as I said, a couple different avenues in which to obtain the consent. Just make sure that they are well documented and recorded. Mr. Bedard? Anything else? Again we focus on what kind of consent we're obtaining. The importance of Esign here I think is worthy of a little bit of emphasis even though I know we're not going to spend a lot of time talking about Esign. But when I think about Esign, Joanne, I think I said okay Esign is this rule, this law, that says if I've got to provide something to a consumer in writing, this law allows me to use an electronic record in order to satisfy the writing requirement that I have. Because typically right now I use the mail to satisfy my obligation to send something to a consumer in writing. If I want to substitute an electronic communication for what I would otherwise do in writing by sending something in the mail. Well, then I gotta jump through some of these esign hoops. For example, there are some circumstances in which the FDCPA requires a debt collector to send something to a consumer in writing. So Esign steps in and says look alright I understand you might not want to put that in the mail with a stamp on it and spend fifty some cents, but if you want to use an electronic record to satisfy your obligation to have sent it in writing. You can use an electronic record but first you got to jump through what I refer to as the Esign hoops. So when we talk about obtaining email consent, we gotta remember we gave to keep track of what we're obtaining consent for. I love the idea of driving consumers through putting them through an esign consent process using technology. We can do that with text messaging, we can do that with emails, we can do that through our website, but it is a process that we're going to go through before we end up sending documents that otherwise have to be sent to a consumer in writing. The Bureau's rule talks all about what they think the intersection between the FTCPA and esign looks like. That again that's not the rule but it is something we're gonna have to keep in the back of our mind because we may very well be required to comply with it in ways that the current law doesn't necessarily require. You're right. Real quick just want to reiterate again you can obtain email consent through websites. Again I'm going to just harp on agency websites are going to be so critical as we move into this next generation of alternative channels. You must have a website that a consumer can go to. Again, it legitimizes your company is not being a scammer and it provides so many options to consumers to get email consent, to get you Esign consent, to get text message consent, to set preferences, to really allow the consumer to establish their rhythm of how they want to be communicated with. This slide just reiterates that. Let's talk about text messaging and what text messaging and debt collection would look like. Obviously you need to understand consent and revocation. Again, because that text is a call, TCPA to the extent they're using at ATDS comes into play. So not only do we have to get consent but we should really understand when consumers don't want to be text or contacted. The TCPA requirements are necessary. I throw in the CTIA again because they are the association that's setting the standards for texting and one of their primary goals to offer consumers the opportunity not only to opt in but to opt out. That's their form of revocation. As we know from the FCC's declaratory ruling, and even after ACA versus FCC, revocation can be any time, any reasonable time, place or manner. So a consumer may text you at 3 o'clock in the morning or may they may read their text at 3 o'clock in the morning and there's an opt-out. And they can opt out, so you have to make sure that's picked up at the next possible next business day. And you know that you should no longer be texting them. So consumers do have that option there. Next slide please. Getting back to the CTIA real quick. I don't want to spend too much time we talked about who they are. That they manage the shortcodes. What is important when you're talking about text messaging the CTA has somewhat of a formula how they envision consumers engaging with a caller and having some sort of text messaging relationship. They talk about it in terms of invites. So it's one thing that you're on the phone with a consumer and you say may i text you? You can't just start texting them you have to go through first a process of inviting them into your text messaging system. There are all kinds of ways to do that. The CTIA talks about one way it's you know you can send these short codes to say, if you want to be in a please type join to one two three four five.The consumer will do that. You'll get that message from the consumer you will then spit out a welcome to our text messaging system. Here's the opt-out. If you have questions type in help. You to have that first kind of courting relationship so to speak before you text message. There's all kinds of ways to do that and and John Chebat, who we're going to get on the call and the webinar quickly, because I think you're all tired of hearing John Bedard and I. Is going to talk about how he uses the PDCflow system to get that invitation and how it's working for him. But you've got to have you just can't start texting hey how you doing. You owe a thousand dollars. Please text us back with payment arrangements. There has to be some what of an invite We'll talk about that. Obviously, as we said with TCPA, you can't even start even if you've when you're on the phone with the consumer you can't even start to text or send the invite until you get the consent. Especially if you're going to be using an ATDS in the future. You have to make sure that you have that. I think it's important with TCPA and we'll talk about this a little bit later and the NPR. As we know with the TCPA if a consumer has given consent to a creditor that you can send text messages using an ATDS, that consent transfers. So if you're working on account say from a hospital and the consumer is consented to the use of text messaging you can start you know text messaging and inviting the consumer to join your SMS system. But the NPR when it talks about text messaging is not allowing that consent to transfer and that is going to be a big issue because it seems to me if the NPR, if the rule is finalized, with that proposal whether there is consent from the creditor or not you're going to have to start all over again and that's why we focused a lot on how to obtain consent. Like emails the content of your text message should have the name of your company it should have the mini Miranda. It should let the consumer know the text rate can apply. There needs to be an opt-out and if there's any other additional action that it's required you can use short codes. It could sometimes make text messages very long and we understand that and that's going to be the interesting challenge for folks as they start to go through the text messaging process. And much like email you can get consent through the phone. May I text you? As we had talked about. Then you will send a text to to make sure that you're verified you have the right person and you can send the opt-in. You can do it through your website. As we talked about the same email. That is a matter that's I think instead what I would prefer and hope that all everyone starts to do as well. So we are now have been really fortunate to have John Chebat on the phone because he has been using, and he's going to tell you, texts for some time now with tremendous success. So I would love to turn it over to John and have John talk about how he's using text, the results that he's seeing, and the positive feedback that he is getting from the consumers he is working with. So John I'm going to hand it to you. John? You still on mute John? Okay, can you hear me now? There you go. I'm sitting here talking. I'm sorry about that. Again Joann, thank you for the kind introduction. I also want to thank John and Dawn and Hannah for having me. I was asked a few weeks ago by a colleague who works for PDCflow to testify to the success that I've been having over the last six months using the PDCflow text message platform and how well it's worked for me and I'm glad to be sharing this today. Because what we found the success that we found using this product and the lack of complaints. We just feel the consumer sincerely hopes that this text messaging is a much wider used tool than the phone call. It's much less abrasive and aggressive to get a text message where the consumer can respond or opt out or opt in to receive text messages in the future that allows them to communicate with their with collection agencies, with lending industry in general. So the way we use it is specifically on receiving payments. Initially when we make a phone call, we ask the consumer for permission to send them a text message regarding the payment arrangement that we've just made with them over the phone. That may include a payment arrangement over many months, that may include a settlement agreement or a payment in full. The letter is generated through a template on our software. The software that we use is a customized software called Blue Chip which is integrated with PDCflow. Once the agent puts in the type of letter that they want to send and the consumer gives permission it's literally one click of a button the consumer will receive it. The initial text message will include a opt-in by click here to opt-in. It will also include the mini Miranda and an opt-out. Text 1 to opt-out. Once they opt-in they click on the opt-in link and it takes them to a you could have a 1 factor or a two factor identity authentication model we use a 1 factor for now we may use 2 factors in the future we're considering it. However, for today, we use a 1 factor that is a 4 digit code that the agent gives to the consumer in order to opt in once that four digit code is entered the letter pops up and the consumer will then sign the agreement, click approve. I apologize there's one more step prior to the signature, once they opt-in with the four digit code, a permission to locate to verify location is asked of the consumer. There is an allow button and do not allow button and they can allow us to take a geolocation. So once they sign and send that letter back not only does it give us a timestamp and a signature it also gives us a location stamp as well. That is stored in our software pretty much permanently. So that is how the initial permission is given. It is given over the phone and it is done through many, many steps so at any of those steps the consumer at any time could opt out. You want to go to the next slide. As of right now we are using the initial letter that we send during the phone call. If a consumer agrees to a payment arrangement agreement, we will send notifications the day prior to the payment arrangement date. That is a reminder that acts as a reminder that lets the consumer know that on the next day that their credit card that they have on file is going to be run for a specific amount and if that they need to change it whether it's the change the amount or the date that they could call, text, or email us. All that information is giving upfront. Also all the boilerplate legal stuff like a mini Miranda and the opt-out option is there on every text message that we send. Once the consumer receives the agreement or the text message they could communicate in real time as I mentioned before. You can go to the next slide. What we found is incredibly, I mean outstanding. I can't think of a word better than outstanding. Our response rate is so much higher. What we found is when we do send a reminder text that people do generally call in to either change the date or change the amount so that so the next day we don't have a decline. So our ratio of declines has gone way down. What we also found was less chargebacks because this is done in writing and because there's action taken by the consumer to read the letter, to actually understand the letter, to be part of the process. We found that chargebacks have gone down by more than 50%. Less miscommunication. We found that consumers like to communicate through text messaging. They like the reminders that we send. We've never ever had one single complaint and we send out approximately 10,000 text messages per month. We haven't had not one, not one complaint. In closing I just got to say thank you PDCflow. I'm so happy that I found you guys and I'm happy to testify to that. If anybody wants to email me separately I'll leave my email. If you need more information, I'd be glad to help. Joann, I'll hand it back to you. John, thank you so much. It's just so fascinating to hear. I had one quick question. Just so we're clear for the audience the text messaging that you're doing is all post validation notice? Is that correct? Yes. We could actually send it. So what we do is we actually send a validation notice within five days of of speaking to the consumer. Now if it's our first phone call we can actually send the validation notice my text message and they could approve it by signing and sending it back. Right. The process that you're talking about really after the initial validation. If you haven't spoken them within the first five days after the initial validation notice. That is correct. Correct. And you're not sending the validation notice prior to any communication with the consumer? via text? That's actually a great question because I am working with PDCflow directly to work with the CFPB. CFPB right now is is allowing some companies to do that. I think what the CFPB is doing is thinking about some sandbox opportunities. I know there's already to what the validation notice is something that people would like to discuss what the CFPB. I don't think they've had a decision of whether they're going to do that and I think a lot will depend on the NPR. But yeah that's great to know and I think that I think the point you want to make, I don't mean to interpret what you're saying, but is that there is just so much opportunity with these potential channels to communicate with consumers in different ways. Absolutely! They're great I see that we should be discussing with the CFPB so that they can understand our industry and understand the benefit of the technology. So thanks so much John. We really appreciate it. Thank you.We have one more slide and I think that will take us to the hour. We've talked a lot about the NPR and how the NPR may change this technology landscape.I just want to kind of go over that because there's so many wild cards out there. Right now we have no real other than what John Bedard and I have talked to real limitations with using email and text other than what you see in can spam or TCPA or the requirements of at CTIA but in the debt collection space it's kind of uncharted water so we just want to highlight some issues that we still need to be thinking about and the NPR may or may not answer those questions for us. As we talked about before consent doesn't transfer. Now in TCPA it does so if you get consent from a creditor to call on a cell phone or using a text using an ATDS that consent can go to the third-party debt collector the CFPB has indicated in their NPR that that is not going to be the case so that's very different and how you manage that will be important as you're using these channels. We've talked a lot about hyperlinks and hyperlinks can be a wonderful thing and in John Chebat's case you know if he's talking to the consumer and they're starting on a payment plan and you have consent, you can send a link and they'll get them to a document and they can make their payment arrangements that is a wonderful thing. But hyperlinks are questionable when you are sending required disclosures. That is still up in the air and how that interlinks with esign which is the next point there it's still unknown. I would say, and I think John Bedard as he and I have had numerous conversations about trying to decipher what the CFPB's proposal is, it's complicated. We do not know sitting here today how that's all going to flush out. And even if it does how easy it's going to be to follow. Bedard, do you want to comment on that because you and I sat in a room one day trying to figure all of this out and we were not successful. Yeah, it's like I told somebody recently who is asking me a similar question about what is the intersection between esign and the FDCPA? I described it to him, I said look it's like two asteroids barreling through space on different trajectories. They don't actually intersect very I mean they don't intersect but the Bureau in this proposal is trying very hard to make them crash into each other and make make an intersection here that doesn't exist in the absence of their rule. So that's why when you and I Joann talk to audiences about how it's gonna work we're not you know exactly sure what the Bureau is going to do. I know they've gotten a lot of comment on it and I do know I do believe that what they have done is they have stretched Esign in a few places beyond the language of its current statute. Whether the Bureau is is allowed to do that remains to be seen but they have indicated in this proposal that they intend to stretch the language of the statute beyond its reasonable interpretation to make debt collectors comply with what it thinks are the good provisions of Esign when it comes to securing consent and making sure that consumers can receive what it is they send them. I described Esign as that technological handshake between a consumer and anybody who wants to send them an electronic communication. Just like our fax machines back in the day used to have that little electronic sound that we can all recognize that they would talk to each other. Well, e-sign is really the legal version of the electronic technology handshake to make sure that the consumer can receive what we send with their permission and remains to be seen on what the CFPB exactly is going to do but we have a good sense of what they want to do anyway. That's a great analogy. Thanks John. Two other points want to make real quick as we talked about in the beginning of the webinar the NPR does have contact limits when it comes to telephone. It did not make any proposals regarding limiting the amount of times you can email in text but we still have rules around the FDCPA that has not gone away. The FDCPA has not gone away and these rules are meant to interpret the FDCPA so remember there is owing a harassment component of the Act. Be careful when you are using excessive email and text because that is that will always come into a play. And opt out I mean you were just always going to have to have if every it's because you're not used to using email and text having that and even when you make a phone call you don't have to say well a consumer could say to you you know don't call me anymore and everybody for the most part industry has recognized and appreciated those requests from consumers but in the email and text category you were just going to constantly have to offer the opt-out and on the back end on your side has to be able to capture those opt-out and how you will process into your system to make sure that you follow that because they will be strict that will be a big area of today's litigation when this rule is finally is finalized. If you don't opt out how long does it take to to accept that request. It's going to be a big issue. So keep those in mind and with that I will stop talking and I will punt it back to Dawn and again want to thank John Bedard and John Chebat for a wonderful webinar and also PDCflow for allowing us to do this. Yes, that was a lot of information. Thank You Joann. Thank you John B and John C for your expertise and John Chebat for sharing your experience with PDCflow. If you have questions and they didn't get answered you know through the presentation my email address is on this last slide if you want you can email me the questions. I'll try to get questions that are about compliance answered by John Bedard and Joann. If you have questions for John Chebat please email me let me know and I can put you in touch with him as far as his experience with PDCflow so that wraps it up for today. Thank you everyone and have a wonderful day. Thank you.