The District of Maryland recently provided clarification on when a debt collector needs to reveal her identity and the purpose of the communication with consumers, known industry-wide as the mini-Miranda. In Price-Richardson v. DCN Holdings, LLC, d/b/a AccountsReceivable.com, 2018 WL 902167 (D. Md. Feb. 15, 2018), the court clarified that providing the mini-Miranda is not necessary when the consumer initiates a call with the debt collector pursuant to a letter that already discloses the debt collector’s identity and the purpose of the debt collector’s communication with the consumer.
Read the decision here.
Factual and Procedural Background
A dentist’s office placed plaintiff’s delinquent account with DCN Holdings, LLC for collection. DCN sent a letter to plaintiff where it disclosed that the letter is an attempt to collect a debt. Six months after receiving the letter, plaintiff called DCN to discuss the account. During this call, the DCN representative did not disclose that she was a debt collector or that the call was an attempt to collect a debt.
Plaintiff filed a lawsuit against DCN in the District of Maryland alleging that, among other things, DCN violated the FDCPA by not disclosing its identity and that DCN was attempting to collect a debt during the telephone call with plaintiff. DCN moved to dismiss the lawsuit.
The court dismissed all counts of the amended complaint in this lawsuit. Specifically on the mini-Miranda issue, the court found that plaintiff already knew the purpose of the communication when she placed the call to DCN. Plaintiff received a letter from DCN that disclosed DCN’s identity and the purpose of its communication with plaintiff. Plaintiff herself argued that the language stating “[t]his is an attempt to collect a debt” triggered her telephone call to DCN. Since this language triggered the call, the court reasoned that plaintiff already knew the purpose of her call to DCN.
The court references a similar California case, Costa v. Nat’l Action Fin. Services, 634 F. Supp.2d 1069 (E.D. Cal. 2007), which similarly found the disclosure is not required when a consumer responds to a debt collector’s communication “with the understanding of who they are dealing with.” Citing Costa, the court mentioned that “[r]equiring a debt collector to interrupt the conversation to interject she was a debt collector would likely be a pointless formality.” Id. (internal quotations and citations omitted).
Plaintiff attempts to argue that a Fourth Circuit case, Carroll v. Wolpoff & Abramson, 961 F.2d 459 (4th Cir. 1992) requires the mini-Miranda disclosure in all communications with consumers. The court, however, distinguished the instant case from Carroll.
In Carroll, the debt collector sent an initial letter with the disclosure and a subsequent letter without. Since consumers don’t always receive the initial letter, it is foreseeable that a consumer who initiated a call with the debt collector based on a subsequent letter without such disclosure would not know the purpose of the call.
In the instant case, the issue is moot according to the court. Plaintiff here received a single letter from DCN. That letter contained DCN’s identity and the purpose of the communication. Since plaintiff initiated the call pursuant to this letter, plaintiff already knew the purpose of the communication, thus not requiring DCN to provide the mini-Miranda during the call.
Debt collectors face an uphill battle when communicating with consumers. A conversation to encourage a consumer to resolve an account is difficult enough. It is made even more difficult with the disclosure minefields debt collectors have to navigate. In this decision, the court eases this burden.
The mini-Miranda allows the consumer to be fully aware of who she is speaking with and the purpose of the communication. The mini-Miranda, however, is a cumbersome and confrontational disclosure that puts consumers on-the-spot. Even its commonly-known industry name is reminiscent of criminal action. Its relation to the Miranda disclosure that law enforcement are required to provide to criminals prior to interrogations is undeniable. Consumers are not criminals, and they should not be treated as such.
With this decision, the court recognizes the awkwardness of interrupting the natural flow of conversation to provide a disclosure that is superfluous since the consumer already knows who they are speaking with. While the mini-Miranda may always exist, courts that attempt to improve the natural flow of debt-related communciation are helping consumers associate improving their financial well-being with dignity rather than shame.