Sixth Circuit Decides Voicemail Message is not a “Communication”

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In a 2-1 opinion decided and filed on October 22, 2015 the Sixth Circuit Court of Appeals determined that a voicemail message left at the payroll department of a consumer’s business was not a “communication” as that term is defined in the Fair Debt Collection Practices Act.

The case, Brown v. Van Ru Credit Corporation, 15-1323, 2015 WL 6220521, — F.3d — (3d Cir., Oct. 22, 2015) was originally filed in May of 2014. The facts are relatively simple: Brown owed debt on a student loan. Van Ru Credit Corporation (Van Ru), a debt collection agency, twice contacted the business that Brown owns. First, in late March or early April 2014, Van Ru mailed a letter to Brown’s business seeking Brown’s payroll information. Brown did not allege that this letter in any way violated the Fair Debt Collection Practices Act (FDCPA) or any other law. On April 14, 2014, a Van Ru employee called Brown’s business and left the following voicemail in the business’s “general mail box”:

Good morning, my name is Kay and I’m calling from Van Ru Credit Corporation. If someone from the payroll department can please return my phone call my phone number is (877) 419-5627 and the reference number is *****488; again my telephone number is (877) 419-5627 and reference number is *****488. 

Brown filed suit in federal court, alleging that Van Ru’s voicemail violated two provisions of the FDCPA. First, Brown alleged that Van Ru violated 15 U.S.C. § 1692c(b) by communicating with a third party regarding Brown’s debt. Second, Brown alleged that Van Ru violated 15 U.S.C. § 1692g(a) by failing to provide required written notices after an “initial communication with a consumer.”

Van Ru filed an answer and then, before the start of discovery, a motion for judgment on the pleadings. Brown responded, and also filed a motion to amend his complaint with the additional allegation that the employee who retrieved the message knew that calls to Brown’s business were intended for Brown. The district court granted Van Ru’s motion for judgment on the pleadings and denied Brown’s motion to amend his complaint as futile. The district court reasoned that because the voicemail message did not imply the existence of a debt, it was not a “communication” as defined by the FDCPA. Therefore, Brown failed to state a claim under the FDCPA. Brown filed a motion for reconsideration, which the district court denied as not identifying a palpable defect or raising new issues. Brown appealed the district court decision.

The concise (8 page) majority opinion references the Federal Trade Commission’s (FTC) “common sense approach” to the definition of “communication” outlined in the FTC’s non-binding commentary to the FDCPA.

The court reasoned, “In order to state a claim under 15 U.S.C. § 1692c(b), a plaintiff must plausibly allege, in part, that the defendant “communicate[d], 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.” The FDCPA defines “communication” as “the conveying of information regarding a debt directly or indirectly to any person through any medium.” To convey information regarding a debt, a communication must at a minimum imply the existence of a debt. Otherwise, whatever information is conveyed cannot be understood as “regarding a debt.” Van Ru’s voicemail message—which does little more than ask someone from Brown’s business’s payroll department to call back—does not do so.” (Emphasis added.)

It should be noted that there was a dissenting opinion filed. Judge Bernice B. Donald disagreed with the majority opinion stating, “The district court dismissed this case before discovery had begun. Consequently, Brown did not have the opportunity to unearth the true identity of the reference number. Until the true identity of the reference number is known, I cannot agree with the majority’s determination that the voicemail did not convey “any information” regarding Brown’s loan. In my view, either the Van Ru representative conveyed information regarding Brown’s loan or she did not. Conducting that inquiry has nothing to do with evaluating what Brown’s employee knew or did not know. Since the nature of the reference number has yet to be disclosed, this case was dismissed prematurely. Accordingly, I would remand to the district court to allow Brown an opportunity to conduct discovery.”

insideARM Perspective 

Voicemail messages continue to be a bonanza for consumer litigation in the ARM industry. insideARM has written about numerous voicemail message cases over the years. We have hosted webinars on the subject.  We have resources on our website devoted to the subject. (See To The Point – Telephony and Voicemail MessagesTo The Point – Voicemails and Foti, and To The Point – Written and Verbal Communications.)

Unfortunately, there is no perfect solution. In December of last year insideARM published an excellent article by Rozanne Andersen, Chief Compliance Officer at Ontario Systems, discussing the various options used by agencies and the pitfalls associated with each. (Though the voice message in this case does not neatly fit into one of the options discussed in that article. In this instance, the voice message was not intended for the consumer, it was intended for the payroll department at the consumer’s place of business.)

One can only hope that the CFPB will provide clear guidance on the voicemail message quagmire in their upcoming rulemaking.

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Posted in Accounts Receivable Management, CFPB, Collection Laws and Regulations, Debt Collection, FDCPA, Featured Post .

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  • avatar denise-densmore says:

    I’d like to know why Van Ru was calling in the first place. If they had a judgment, they should have used it to garnish his wages. Otherwise, what did they seek to accomplish? If the guy wanted to pay, he would have paid. Absent a judgment or his consent, what could/would Van Ru have done with the payroll information had they received it?

  • avatar Chris Ruhman says:

    If Van Ru is collecting Federal Student Loans they would be using an Administrative Wage Garnishment, no court judgement is required. They would have been contacting payroll to verify employement so that the paperwork could be sent for a garnishment.

  • avatar Sisko says:

    One step closer to undoing the Foti decision. A voicemail by itself is not a communication about a debt as defined by the FDCPA.

  • avatar JSG Jsg says:

    Maybe VanRu was just “sending a message” to the debtor in an effort to collect ?

  • avatar denise-densmore says:

    Point taken on collecting a student loan. But where does it say that my company’s (or any company’s) payroll department has to talk to these people? An official written communication would be much more effective. I say this because of all of the debt collector misconduct out there.

    Can you imagine the consequences if one of these “bad actor” debt collectors started doing this? Before anyone says “oh that would never happen” I’ll bet you might have said the same thing about threats to dig up dead pets and relatives and setting up a fake courtroom.

    Make no mistake-lots of people owe money and there are some honest debt collectors out there but the “bad actors” are close to having ruined the profession. For that reason I cannot help but recommend a combination of strict(er) regulation and self-policing.

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