John Rossman

The ARM industry seeks to collect debts from a mobile — almost peripatetic — society. Debt collectors utilize advanced skiptracing technology and multiple sources for obtaining accurate Debtor contact information. Despite these precautions, collection calls mistakenly placed to wrong numbers are a daily occurrence and an unfortunate reality of our business. Wrong number collection calls that broadcast a pre-recorded message — such as a Foti compliant message, seeking to avoid class action litigation — can result in other alarming litigation risks for the debt industry.

Consumers seeking to sue members of the debt industry on wrong number collection calls focus on the Telephone Consumer Protection Act (TCPA). The TCPA prohibits calls using a pre-recorded or artificial voice to deliver a message to a consumer unless there is a previous business relationship or consent for the call by the consumer. With most calls made by the debt industry to a consumer, the previous business relationship between the creditor and the consumer is sufficient to allow the debt collector to utilize a pre-recorded message. However, with wrong number collection calls, such a previous business relationship is lacking.

The danger with TCPA lawsuits premised on wrong number collection calls is that the volume of calls can result in substantial claimed damages. The TCPA provides for a statutory penalty of $500.00 per call and that amount increases to $1500.00 per intentional violation. Further, the pitfalls of these TCPA cases are legion:

1. Pre-recorded collection messages — usually Foti compliant — are often broadcast using an automated dialer. Forty or fifty calls over a few month period, usually with no communication from the consumer advising that debt collector is contacting a wrong number, can result in large statutory damages claims.

2. Consumer attorneys argue that multiple wrong number collection calls to the same phone number are intentional (thus subject to the $1500 per call penalty) if the debt collector does not have in place adequate procedures for a consumer to communicate that the wrong number is called.

3. Many errors and omissions insurance policies for the debt industry participants exclude coverage for “intentional” violations of the law. Thus, a debt collector’s lack of a policy regarding wrong number collection calls could result an exclusion of insurance coverage for claims.

ARM Industry Participants Must Have a Plan

Debt collectors must have a comprehensive policy for consumers to advise that wrong numbers have been called. Further, ACA International is suggesting that the following language be included in pre-recorded collection call messages:

“If we have reached the wrong number for this person, please call us back at [phone #1] to remove your phone number.”

The telephone number [phone #1] should go straight to voicemail. This telephone number is to allow an individual to remove a telephone number from the debt collector’s records. The voice mail message should not disclose the existence of a debt. ACA suggests this message for the voicemail:

“If we have reached the wrong party, please leave us the phone number called and the name left on the message. Please leave the date and time of the message and we will update our records.”

Next week, look for an audio podcast on TCPA compliance from John Rossman and Michael Poncin.

Please contact John Rossman at if you have questions about automated dialers, pre-recorded messages or the TCPA.

John K. Rossman is a shareholder and Chair of the Creditors’ Remedies Practice Group at Moss & Barnett, P.A. Mr. Rossman is a nationally acclaimed authority on the Fair Debt Collection Practices Act and the labyrinth of laws that impact the debt industry. He is a counselor and advisor to national and international companies and noted for his intelligent, creative and successful representation of collection agencies, debt buyers, creditors and fellow attorneys in cases across the country.

This publication is provided only as a general discussion of legal principles and ideas. Every situation is unique and must be reviewed by a licensed attorney to determine the appropriate application of the law to any particular fact scenario. If you have a legal question, consult with an attorney. The reader of this publication will not rely upon anything herein as legal advice and will not substitute anything contained herein for obtaining legal advice from an attorney. No attorney-client relationship is formed by the publication or reading of this document. Moss & Barnett, A Professional Association, assumes no liability for typographical or other errors contained herein or for changes in the law affecting anything discussed herein.

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