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Legal Headaches of Check By Phone Payments in Debt Collection

A recently filed putative class action demonstrates the risk all companies face when accepting electronic checks by phone. While most companies agree to accept electronic checks by phone only as a convenience to customers, these transactions are governed by a confluence of financial regulations replete with thorny traps for the unwary. In particular, recurring electronic withdrawals from a consumer’s checking account must be authorized in a writing signed or similarly authenticated by the consumer.

While the definition of “similarly authenticated” is subject to some interpretation, an audio recording of the consumer’s verbal consent is arguably not sufficient.

ftc-headquarters

FTC Releases Large Multi-Year Debt Buying Study

The Federal Trade Commission today announced the results of the first empirical study of debt buyers. In January 2010, the FTC asked several prominent debt purchasers to submit information about their portfolios.

The report, titled The Structure and Practices of the Debt Buying Industry, found there is room for improvement in the information these companies have when they contact consumers and try to collect.

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Ontario Systems Adds New Employees to Fill Strategic Roles

Ontario Systems, a leading provider of accounts receivable and revenue cycle management software solutions and services, announced the addition of two key personnel as the company prepares for growth in 2013. This communication comes on the heels of the announcement of a company-wide organizational realignment to strengthen its newly formed Executive Leadership Team.