For years now, the issues of leaving messages for a consumer: risk of improper third party disclosure, and compliance with seemingly conflicting rules, has been a hotbed of legal debate in the ARM community. From Foti v. NCO Financial Systems to Zortman v. J.C. Christensen & Associates, Inc. and hundreds of other cases citing those two cases, the issue has been rich fodder for FDCPA litigation.
A ruling in the matter of Halberstam v. Global Credit and Collection Corp. (U.S. District Court, ED, NY, 15-cv-5696 (BMC) adds another wrinkle to the murky (and risky) practice. The case involved leaving a message with a person who answers the consumer’s phone.
The issue presented by the case under the Fair Debt Collection Practices Act (FDCPA) was whether a debt collector, whose telephone call to a debtor is answered by a third party, may leave his name and number for the debtor to return the call — without disclosing that he is a debt collector — or whether the debt collector must refrain from leaving callback information and attempt the call at a later time.
In a Memorandum, Decision and Order dated January 11, 2016 United States District Court Brian M. Cogan ruled that the message was, indeed, a FDCPA violation.
The critical facts of the case were not in dispute.
Defendant debt collector telephoned plaintiff about his debt. The person answering the phone (who plaintiff did not identify) responded that “Herschel [the debtor/plaintiff] is not yet in,” and asked if he could take a message. The collection agent responded, in relevant part, “Name is Eric Panganiban. Callback number is 1-866-277-1877 … direct extension is 6929. Regarding a personal business matter.”
Judge Cogan wrote, in part:
“There are several provisions of the Fair Debt Collection Practices Act that might bear on the question of whether this message was allowed. First, § 1692e(11) deems it a ‘false or misleading representation’ if a debt collector fails to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector . . .
Second, the FDCPA also addresses communications between the debt collector and a third party. Section 1692c(b), subtitled ‘Communication with third parties,’ provides, in part:
Except as provided in section 1692b of this title …a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.”
Defendant’s argument based on the demanding technicalities of the statute, is the familiar “rock and a hard place” argument that collection firms often raise to claims under the FDCPA. If the call to the third party is a “communication,” defendant argues, then it had to give the § 1692(e) disclosures. But if it gave those disclosures to the third party, or even mentioned that it was a debt collector, then it would clearly be violating § 1692c(b).
As suggested above, there is no Scylla and Charybdis here. A polite “No, thank you, I’ll call back,” would easily have guided defendant through the Strait of Messina. Instead, Panganiban seized upon the opportunity presented by the third party to obtain a debtor-initiated contact, something the debtor may or may not have done on his own, or in response to a dunning letter with full disclosures, in contrast to an unadorned callback message about a “personal business matter.” Nothing required Panganiban to seize that opportunity, and the prohibition on relaying information through a third party prohibited it.”
The court concluded that “the only way to avoid violating the statute when the recipient of the call was asked if he could take a message was for the caller to make a different decision by politely demurring, and perhaps trying again at some point in the future.”
This case adds another wrinkle to the challenge of leaving any message for a consumer. The only thing clear on this issue is that there is no “right answer.” The best option may be to never leave a message under any situation. However in the eyes of many, that leads to what may be deemed as harassment, because it causes additional phone calls — and, perhaps, hang-ups. Let’s hope that the CFPB will address the issue in their upcoming Rulemaking for the debt collection industry.