Legal Ruling Further Muddies Waters on Third-Party Disclosure vs. Mini-Miranda

Correction: In an earlier version of this story, we incorrectly stated that the case before the U.S. District Court of the Southern District of Florida was Berg v. Penn Credit Corp. The case in question is Berg v. Merchants Association Collection Division, as stated below in the corrected version of the article.

A recent case heard in U.S. District Court – Southern District of Florida again highlights the Catch-22 of using the Mini-Miranda warning in automated voice messages when placing calls to collect a debt.

The warning, which states, “This is an attempt to collect a debt…,” is one that debt collectors must give at the beginning of each communication, whether by voice or in print.

In an earlier case, Foti v. Davis, the automated voice system left a message on Paul S. Foti’s answering machine that said the collector was calling “requiring a personal business matter that requires your immediate attention….”

The message was deemed to be a violation of Fair Debt Collection Practices Act (FDCPA) Section 1692e(11) because the simple identification of the caller at the beginning of the message “did not adequately disclose that the caller was attempting to collect the debt.”

However, the FDCPA also prohibits debt collectors from disclosing information about a debt to third parties. This was the central issue of the case, Berg v. Merchants Association Collection Division, before the Court of the Southern District of Florida.
 
“The Berg decision amplifies this catch-22 problem,” said Valerie Hayes, Corporate Counsel and Vice President of Legal and Government Affairs for ACA International. “In that case, the debt collector left pre-recorded messages with the consumer. The messages informed the consumer the caller was a debt collector, that the message was an attempt to collect a debt, and attempted to confirm that the listener of the message was in fact the consumer.”

The consumer sued the debt collector claiming the debt collector violated the FDCPA by disclosing information about the debt to third parties because third parties heard the messages left by the debt collector and the debt collector knew or had reason to know that people other than the consumer might hear the messages, Hayes continued. The debt collector filed a motion to dismiss, meaning the debt collector argued the lawsuit must fail under the law even if all of the facts alleged by the consumer in his complaint are true.
 
The court recently denied the debt collector’s motion to dismiss, finding that the law allows the consumer to continue with his claim, according to Hayes. The court concluded the messages were communications under the FDCPA, and that although the messages tried to make sure the listener of the message was the consumer, the messages did not inform the consumer to disconnect if listening to the message in the presence of others.