The FDCPA was enacted “to eliminate abusive debt collection practices by debt collectors, to insure those debt collectors who refrain from using abusive debt collection practices are not completely disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 USC Sec. 1692e. Specifically, the FDCPA prohibits unfair or unconscionable collection methods, conduct which harasses, oppresses or abuses any debtor, and the making of any false, misleading, or deceptive statements in connection with a debt, and it requires that collectors make certain dislosures. 15 USC Sec. 1692.
In order to be subject to some of the protections of the FDCPA, correspondence must be a “communication” within the meaning of the Act. In Foti v. NCO Financial Systems, Inc., 424 F. Supp. 2d 643 (SDNY 2006), the Court considered whether a Pre-recorded message that does not convey specific information regarding the debt is a communication subject to the FDCPA. And, in Berg v. Merchants Association Collection Division, Inc., 586 F.Supp.2d 1336 (S.D.Fla. 2008), the court extended its analysis to voice mail messages where the debt collector, consistent with Foti decision, conceded the message was a “communication”, but argued that the form of the message complied with the requirements of the FDCPA.
The significance of these decisions is the court’s analysis of potential conflict between provisions of the Act that require the debt collector to identify themselves as debt collectors and that prohibit disclosure of the existence of the debt to third parties. In Foti the debt collector sought to comply with the prohibition against disclosure of the debt to third parties through its pre-recorded message by not disclosing the debt or that it was a debt collector in its message. The debt collector argued that because it did not disclose the debt that the message was not a “communication” under the Act, and did not trigger disclosure requirements whereby it was required to identify itself as a debt collector. In Berg the debt collector did not dispute that the voice mail message was a “communication” but argued that because the message was left on a home voice mail, that it provided a forewarning for third parties to disconnect, and following forewarning provided all required disclosures, that the message was in compliance with the Act.
Pre-Recorded Message–Foti v. NCO Financial Systems, Inc., 424 F.Supp.2d 643 (S.D.N.Y. 2006)
In Foti the debt collector utilized a computer dialer that contacted the consumer and played the following prerecorded message: “Good day, we are calling from NCO Financial Systems regarding a personal business matter that requires your immediate attention. Please call back 1-866-701-1275 once again please call back, toll free, 1-866-701-1275, this not a solicitation.”
NCO argued that this pre-recorded message was not a communication because it did not convey any information about the debt, and, therefore, did not trigger the requirement that the debt collector identify itself as such.
The court addresses the following issues in its opinion: First, is a pre-recorded message a communication? Second, must the debt collector identify itself as such in connection with all communications?
The Foti court notes that the FDCPA defines “communication” very broadly as “the conveying of information regarding a debt directly or indirectly to any person through any medium.” The Foti court cites Hosseinzadeh v. M.R.S. Assoc., Inc., 387 F. Supp. 2d 1104 (C.D. Cal 2005), as a case where an almost identical message was deemed to be a communication. In Hosseinzadeh the debt collector argued that its standard voice mail messages were not “communications” because they did not convey information directly or indirectly to any person. The message in Hosseinzadeh stated as follows: “Hello, this is Thomas Hunt calling. Please have an adult contact me regarding some rather important information. This is not a sales call, however, regulations prevent me from leaving more details. You will want to contact me at 1-877-647-5945 as soon as possible. This is a toll free number. Once again this is Thomas Hunt calling and my number is 1-877-647-5945. Thank you.”
The Hosseinzadeh Court rejected the argument that the message was not a “communication” because, Sec. 1692a(2) applies to information conveyed directly or indirectly. Therefore, while the messages may not technically mention specific information about a debt or the nature of the call it did convey information including the fact that there was an important matter that she should attend to and directions on how to do so.
The court rejects a narrow interpretation of the word “communication”, and in support of this rejection, in addition to the Hesseinzadeh decision discussed above, the court cites West v. Nationwide Credit, 998 F. Supp. 642 (W.D.N.C. 1998), which also discussed communication in the context of contact with a third party. In that case the debt collector contacted the consumer’s neighbor and indicated that he had a “very important” matter to discuss. The West court rejected a narrow interpretation of the term “communication” and in doing so noted that in interpreting the meaning of a statute, it is well settled that the plain meaning of statutory language controls its construction. Also See Summit Inv. & Dev. Corp. v. Leroux, 69 F.3d 608 (1st Cir. 1995). Thus, the Foti court concludes, given the choice of language by Congress, the FDCPA should be interpreted to cover communications that convey, directly or indirectly, any information relating to a debt and not just when the debt collector discloses specific information about the particular debt being collected.
The court then addresses whether a debt collector must identify itself in all communications. In Hosseinzadeh, the court ruled that identification of the caller as a debt collector was not required in subsequent communications where the consumer was already aware of the identity of the debt collector. In rejecting this portion of the ruling by the Hosseinzadeh court, the Foti court notes that this ruling was made in reliance on the decision in Pressley v. Capital Credit & Collection Serv., 760 F.2d 922 (9th Cir. 1985) (disclosure not required in all communications because such a conclusion ignores balancing required by Congress to weigh the interests of protecting debtors from abuse against the interests of honest debt collectors). Pressley was subsequently rejected in several circuits including in Pipiles v. Credit Bureau of Lockport, Inc., 886 F. 2d 22 (2nd DCA 1989). The Pipiles court gives three reasons for its rejection of Pressley: First, were balancing undertaken as is suggested in Pressley, the clear and unambiguous language of Congress requiring disclosure in “all communications” would in effect be changed to “some communications”; Second, by requiring disclosure in all communications Congress has insured that even if the first notice is not received by the consumer, that subsequent communications will provide the required disclosures; Third, if Congress wanted the Act to require something other than disclosure in “all communications” it could amend the act, but it has not. The Foti court then directs attention to Tolentino v. Friedman, 46 F.3d 645 (7th Cir. 1995), where the court rejected the reasoning in Pressley to find an attorney liable under the FDCPA for failure to include the mini-miranda in subsequent communications with the consumer. In rendering its opinion the Tolentino court sites decisions from the third, fourth, and sixth circuits that follow the reasoning of the second circuit in Pipiles. See Dutton v. Wolpoff & Abramson, 5 F.3d 649 (3d Cir. 1993); Carroll v. Wolpoff & Abrahamson, 961 F.2d 459 (4th Cir. 1992); Frey v. Gangwish, 970 F.2d 1516 (6th Cir. 1992).
The Foti court also addresses the debt collectors assertion that a broad interpretation of the term “communication” may put collectors in a position where pre-recorded messages or voice mail messages may not be able to be used; because, if the message is a communication it will require identification of the sender as a debt collector and this places the collector in danger of dislcosing the debt to third parties who may overhear or inadvertantly receive the message. The court comments that arguing that a pre-recorded message should be catagorized as not a communication to avoid this circumstance presuposes the collector is somehow entitled to leave pre-recorded messages. The court concludes that the fact that a collector may not be able to leave pre-recorded messages that comply with all provisions of the Act does not warrant an interpretation of the Act that narrowly construes the term “communication”. The court notes that other avenues of collection are still available such as direct contact and appropriate letters.
Voice Mail with Forewarning–Berg v. Merchant’s Association Collection Division, Inc., d/b/a. MAF, 586 F.Supp.2d 1336 (S.D.Fla 2008)
The decision in Foti is adopted and extended in the context of voice mail messages in Berg v. Merchants, 586 F.Supp.2d 1336 (S.D.Fla. 2008). In Berg the consumer alleges that the debt collector left voice mail messages at his residence eleven times in the course of one year. The messages stated as follows: “Hello. This message is for Thomas Berg. If you are not the person requested, disconnect this recording now. By continuing to listen to this recording you acknowledge you are the person requested. This is MAF Collection Services. We are expecting your call at 1-800-749-7710. This is an attempt to collect a debt. Any information obtained will be used for that purpose. 1-800-749-7710.”
The consumer alleged that his father, step-mother, step-mother’s ex-spouse, girlfriend and neighbor all heard the message at one time or another.
The consumer in Berg contends that the messages amounted to unauthorized communications with third parties because the debt collector had reason to know persons other than the consumer would hear the messages. The debt collector does not deny that the subject voice mail is a “communication” under the FDCPA, but counters that when a voice mail message is left on a home voice mail it does not fall within restrictions against communications with third-parties. The debt collector further contends that because the message provides the oportunity for third parties to disconnect from the call it is in compliance with the FDCPA.
The Berg court first discusses whether the subject message is a “communication”. The definition of “communication” in the FDCPA (15 U.S.C. 1692c(b)) is, “the conveying of information regarding a debt directly or indirectly to any person through any medium.” In line with the Foti decision, the Berg court notes that, “courts generally consider pre-recorded messages and voice mail messages from debt collectors to be ‘communications,’ even if the messages do not state what the calls are regarding.” See Belin v. Litton Loan Servicing, LP, 2006 WL 1992410 *4, 2006 U.S. Dist. LEXIS 47953 *12 (M.D.Fla. July 14, 2006) (messages left on the debtor’s answering machine were “communications” under the FDCPA); Foti v. NCO Fin. Sys., 424 F.Supp.2d 643 (S.D.N.Y. 2006) (voice mail message is a “communication” under FDCPA); Hosseinzadeh v. M.R.S. Assocs., Inc., 387 F.Supp.2d 1104 (C.D.Cal. 2005) (same); But See Biggs v. Credit Collections, Inc., 2007 WL 4034997 *4, 2007 U.S. Dist. LEXIS 84793 *12-13 (W.D.Okla. Nov. 15, 2007) (voice mail message not a “communication” because it contained no information regarding a debt).
Next, the Berg court discusses the FDCPA prohibition against disclosing a debt to third parties. Section 1692c(b) requires, with limited exceptions, that debt collectors communicating with third parties may not reveal that the consumer owes a debt, unless the debt collector obtains prior consent of the consumer given directly to the debt collector. Sec. 1692c(b). Congress gave the Federal Trade Commission the authroity to enforce the FDCPA, and the court, therefore, gives significant weight to its interpretation of the statute. The Berg court noted that in a staff commentary the FTC states, “a debt collector does not violate this provision when an eavesdropper overhears a conversation with the consumer, unless the debt collector has reason to anticipate the conversation will be overheard.” FTC Staff Commentary on the FDCPA, 53 Fed.Reg. 50104 (Dec. 13, 1988).
The Berg court then discusses whether leaving a message on a home voicemail precludes violation for disclosure to third parties. The court states that FTC v. Check Enforcement, 2005 WL 1677480 *8 (D.N.J. 2005), is the only case it is aware of where the court specifically ruled on the issue of voice mail messages left on home answering machines; that leaving messages on an answering machine heard by third parties was a violation. This ruling was issued without discussion. The precident established in Check Enforcement, taken together with the FTC Staff Opinion supports the position by the court that debt collectors should have reason to believe that messages left on home voice mail may be overheard by third parties.
The Berg court lastly discusses the affect of a pause in the message to allow third parties to disconnect from the call. The court states that assuming for the sake of argument that a forewarning alerting third parties to disconnect was adequate to avoid disclosure to third parties who wrongfully received a collection message, it would not alleviate the issue of third parties overhearing the message played by the consumer in the presence of third parties. Further, the consumer continuing to listen to the message in the presence of third parties does not constitute prior consent as required by the FDCPA.
The Courts in Foti and Berg have left open the possibily that a debt collector could utilize pre-recorded or voice mail messages in a way that complies with the requirement of identification of the debt collector and that does not violate the prohibition of communication of the debt directly or indirectly to third parties, but the court has not opined on how this might be accomplished. In fact the Court makes a point to warn debt collector that they use these methods at their own risk, and to point out the other methods available to debt collector to communicate with consumers such as appropriate letters.
The debt collector wanting to avoid liability under the FDCPA should adopt a comprehensive strategy to locate and communicate with consumers that avoids the use of pre-recorded or voice mail messages all together. One such strategy might include beginning with phone calls by live callers limited in number and spaced out over time to avoid allegations of harrasment whereby no voice mail messages are left. If live contact cannot be made by phone with the consumer, the debt collector will then resort to the other tools availble to it to locate and make contact with the consumer, such as permitted contact with third parties to obtain location information or communication in writing with the consumer. Once contact has been made, new location information obtained, or the debt collector has other reason to believe that live contact by phone will be successful, efforts to contact the consumer by phone can resume.