Debt Collectors and Answering Machines

by Jeff Sovern

My co-blogger, Deepak Gupta has previously blogged about the FTC's request for comments on debt collection in preparation for a workshop it plans to hold in October.  Today is the deadline for submitting comments,  though the Commission is willing to receive original research, surveys, and academic papers until September 7.  I submitted a comment earlier today (the number assigned my submission suggests only fifteen had been received to that point, though perhaps many last-minute statements have since been or will be filed).  The FTC will make the comments available on its website and in fact seven statements received in April and May have already been posted there.  The following excerpt from my comment deals with debt collectors who, when attempting to telephone a consumer, instead reach an answering machine: 

The FDCPA was enacted in 1977, when telephone answering machines were not yet common, and so the drafters of the statute understandably did not anticipate all the consequences of that technology.  In the intervening decades, answering machines and voice mail have, of course, become omnipresent.  Answering machines present a dilemma for debt collectors.  Debt collectors who repeatedly reach an answering machine and respond by hanging up without leaving a message risk violating § 806, 15 U.S.C. § 1692d, barring harassment, and particularly subsection (5) of that provision (“Causing a telephone to ring . . . repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.”) and subsection (6) (prohibiting “the placement of telephone calls without meaningful disclosure of the caller’s identity”).

Another option for a debt collector reaching an answer machine might be to leave a message.  But a collector leaving a message risks violating three sections of the FDCPA.  First, a collector leaving a message doesn’t know who will overhear it.  Consequently, the collector might fall afoul of § 805(b), 15 U.S.C. § 1692c(b), by communicating with third parties in connection with the collection of a debt.   Second, a collector leaving a message may have to comply with the validation provision of § 809, 15 U.S.C. § 1692g, and the so-called Miranda warning of § 1692e(11).  Collectors must comply with those provisions in the initial communication; whether a message would qualify as a “communication” depends on whether information has been conveyed “regarding a debt” under § 803(2), 15 U.S.C. §

The FTC Staff Commentary takes the position that if the collector does not refer to the debt or the caller’s status as affiliated with a debt collector, the call does not convey information regarding a debt.  § 803(2)-2.[1]  It thus represents an attempt to amputate one horn of the debt collector’s dilemma by permitting the collector to leave a limited message requesting a return call.  The problem is that recent case law seems to reject the FTC position.  Thus, in Foti v. NCO Financial Systems, Inc., 424 F. Supp.2d 643 (S.D.N.Y. 2006), the debt collector left a pre-recorded phone message at the debtor’s home, saying “Good day, we are calling from NCO Financial Systems regarding a personal business matter that requires your immediate attention. Please call back 1-866-701-1275 once again please call back, toll-free, 1-866-701-1275, this is not a solicitation.”  The message did not mention a debt, but only a “personal business matter.”  The court nevertheless found this to be a communication within the meaning of the FDCPA, stating “The FDCPA should be interpreted to cover communications that convey, directly or indirectly, any information relating to a debt, and not just when the debt collector discloses specific information about the particular debt being collected.”   

Similarly, in Hosseinzadeh v. M.R.S. Associates, Inc., 387 F. Supp.2d 1104 (C.D. Cal. 2006), the debt collector left several messages of which the following is typical: “Hello, this is Thomas Hunt calling. Please have an adult contact me regarding some rather important information. This is not a sales call, however, regulations prevent me from leaving more details. You will want to contact me at 1-877-647-5945 as soon as possible. This is a toll free number. Once again this is Thomas Hunt calling and my number is 1-877-647-5945. Thank you.”  The court found the messages to be communications even though, again, they did not explicitly mention the debt.  The court also concluded that the messages violated the requirement of § 806(6), 15 U.S.C. § 16926(6), that debt collectors provide meaningful disclosure of their identity.

Debt collectors who follow the FTC Staff Commentary, then, risk liability under Foti and Hosseinzadeh.  The FTC should encourage Congress to amend the FDCPA to clarify whether debt collectors can leave messages on telephone answering systems and if so, what can be said without incurring liability. Failing that, the FTC should revisit its Commentary to see if it needs updating.

[1] The Commentary refers to messages left with third parties but there does not appear to be a principled basis for distinguishing messages left on answering machines.

---

Comments

[Mahlon]

Thank you. I'm a debt collector, and I thank you. Most professional bill collectors are not against reasonable regulation of collection practices. What we want are clear guidelines. What is permitted and what is prohibited? The problem with the FDCPA is that many of the lines were left intentionally blurry by Congress. How can we comply with a law when there is so much room for disparate, yet reasonable interpretation?

Of the messages left in the two cases referenced in your comment, I think the second (Mr. Hunt's) is perfect. He sounds (as far as I can determine from a transcript) professional and courteous. Frankly, I have a problem with the message in the first. NCO should not have left its company name on the message. I think that is akin to putting a company name in the return address on a collection notice.

I just want to know where the lines are.

[JeffSovern]

Thanks for this excellent comment. I agree that clear lines are preferable to vague boundaries. You make a good point about NCO.

I would be interested to hear about other situations in which ambiguities in the FDCPA create problems for debt collectors.

[Warren Cassell]

I continue to get calls and phone messages on the machine for someone who no longer resides at this address and telephone number. I have contacted FTC via their form on the internet at least four or five times. Yet, I continue to receive annoying calls on the answering machine.
Any suggestions?

[Steve "The Debt Settlement Man" B]

Mahlon unfortunately there are many collectors out there unlike you that will break the law intentionally to collect the debt. Many of them know what they can and cannot do according to the FDCPA, but the greed of making more money prevails and they will do whatever it takes to get the money out of people whether it is continually calling them, or using the many scare tactics that can be employed.

[Kay Johnson]

In the recent past, I tried to settle a debt with a collector by agreeing to pay $600 for a $500 debt that had escalated to $800 because of interest, fees, etc. At the end of the conversation, he read this thing to me said that he would have to say on my credit report that I did not pay the full amount of the debt. So, I declined to pay at all unless he was willing to not submit that statement. He wasn't willing.
Today, which was about a month or so later, another company got the debt and I tried to make the same arrangement with them, with the exception of subtracting what I had already paid the company that I bought the merchandise from. They declined and said that they would report "Refusal to pay." I said "That's not true." She said, "Have a good day." I angrily said, "Goodbye" and hung up.
I want to pay this debt, but I believe these two situations are unacceptable. Please advise!

[Me]

I received the following message on my cell phone:

"This message is for (blank). My name is (blank) calling from the Processing Service and Summons Division at (blank). It involves the Attorney, (blank). I’m calling to ensure that no future court dates are missed by you with regards to case # (blank). In the event future court dates are missed, we will issue an immediate Notice of Judgment and request a Section 65 Hearing in (blank) County. In addition at that point in time, I will have to request a summons and complaint subpoena be issued and served on you either at your home or place of employment, whichever is more convenient for the appropriate authorities out of (blank) County. I’m in a position where I can stop any and all pending legal action which is what I’m trying to do. However, I must have an immediate return phone call. I can be reached at (blank). Refer to case # (blank). Thank you.”

This person left this message not knowing with whom they were leaving this message with since there is an automated generic message on my cell phone. This is for a debt dating back to March or so 2006. I requested validation from a previous collection agency handling this debt and received no response whatsoever for the past month. Then last week I receive this message. Not only was this a different collector supposedly but I surprised by the content of the message on the answering service, clearly in violation of FDCPA but also of my privacy rights. Too much information was disclosed and appeared to be an attempt to use a scare tactic. In fact, I didn't even know who this was since I had not received any written communication from this collector and have never been sued by anyone or ever had dealings with this company. I could not understand the person’s name or the phone number left to call right back inquiring; so I waited for an additional call or a mailing. Two days later I received the following recorded message:

"This message is for (blank). My name is (blank) calling from the Process, Service and Summons Division at (Blank) and the Law offices of attorney (blank) again maam. This message is to advise you that due to your failure to respond to my previous message on (blank) with reference to case # (blank), we will now be filling preliminary paperwork for a notice to judgment or request for a section 65 hearing in (blank) county. Failure to respond to this message within 24 hours will result in one or a combination of any of the following: garnishment of wages, a lien on any personal property, sale & seizure of any real property, sale & seizure of any personal property, including your automobile, an investigation and/or prosecution by the state attorney general's office for an attempt to defraud a financial institution. I'm in a position where I can stop all pending legal action but unfortunately if I do not receive a return phone call, I will have to request that a summons and complaint subpoena be issued and served on you. I can be reached at (blank) and refer to case # (blank ) Thank you."

This message was much clearer so I called back 3 minutes later. The gentleman answering the phone was very pleasant at first. I was very pleasant. I inquired as to the nature of his call and the correct spelling of his name and the attorney's name he referenced and for him to repeat the company name he represented.

He politely complied with my requests. Then I inquired as to what debt he was referencing. It was from a credit card company that I once had fallen behind on. He told me that his calling was regarding an executed judgment against me. I explained to him that I was in the process of investigating the charges and was in fact waiting for a response on my validation to the alleged debt from another creditor and that I had no judgments against me. The gentleman on the other line then became irate. He told me that collection agencies do not validate nor provide statements as to what is owed and that I could not request that. He stated that I had no other choices but to go directly through the credit card company for a statement and pay him directly over the phone.

I then told him that I would not be making such a rush payment over the phone to him which I did not know or had not received any written correspondence from. He then stated that it was not his problem that I did not get his mail he sent 9 days prior to his phone call.

He then told me that he would go ahead with filing a hearing and would request a freeze and lien on my property. He hung up in my face. I called him back with another question apologizing that we must have gotten disconnected. He clearly stated, "Our call was not disconnected. I hung up on you. I'm reporting you to the attorney general."

He is in clear violation of FDCPA, contacting me in such a way with the statements he made, claiming he sent written notice of the debt 9 days prior. If that was the case, not only would I have gotten the correspondence if addressed correctly but, I have a right to respond within 30 days of receiving the correspondence any way and can request proper validation of the debt along with statements which the collector would have to provide. So the mailing of his letter is a bunch of crap.

I am so glad that I did not pick up the phone the initial time he left a message or during the second call and allowed him to leave such a message because I was then able to record it to my computer and can now email the message to the appropriate authorities.

His call does not scare me. It in fact, it makes me upset and is prompting me to file a complaint to the attorney general, consumer affairs and FTC, and BBB, and with rip off report and a few others. While trying to research his company and find the address, nothing came up on the internet. But I believe I was able to find the attorney he referenced out of New York and I am in the process of sending a certified letter to the attorney regarding the debt collector that referenced his name and the violations that I believe exist.

In fact, if true, the collector is attempting to proceed with legal due process without even following the FDCPA guidelines first. He even went too far by stating that if I did not contact within 24 hours, garnishment and the other things WOULD happen to me.

I have just had it with collectors and the harassing and illegal tactics used.

We get scared as consumers when we get that call when we do not have to and when we have rights just like anyone else. Don't be scared, open that letter and fight back. I have noticed personally that most collectors cannot even validate the debt. As in my case, it was just passed on to another collection agency. I will continue to request validation. And anyone that posts a negative remark to my credit report without ceasing collection during validation will be reported as well and that notation will have to be removed according to the Fair Credit Reporting Act (FCRA).

And why is there a chain of collectors out of New York? I have been reading up a lot on tons of scams being run by collectors out of New York.

What do you guys think of this debt collector ?

[Connie]

I just check my answer machine and found a message left by a collection agency that stated that the call was in referance of a debt and any information would be used to collect on this debt, and asking me to call them at a 1 800 number. Is this illegal for them to leave this on my answering machine?

[Samantha]

Yes, it is legal for a collection agency to state that the debt is from a collection agency. A new ruling found that not leaving that the call was from a collection agency makes the call not meaningful disclosure which would be a violation of the FDCPA. ACA recommends that agencies now use the script that is commonly referred to as the FOTI message as a result of Foti vs. NCO financial. The script goes like this:
"This message is for (Consumers name)if this is not(Consumers name), please hang up or disconnect. If this is (Consumers name) please continue to listen to this message. By listening to this message you acknowledge that you are (Consumers name)this is an attempt to collect a debt and any information obtained will be used for that purpose. Please return my call to 800-XXX-XXXX."

It is a sad day when the "consumer" (dead beat-debtor) has the upper hand over a collection agency. If you walked into a store and stole something you would be prosecuted to the fullest extent of the lawbut, if you buy it on credit just don't pay for it, let it go to collections and sue them because there is catch 22 in the law and you can get them either way. How do we expect to teach our children right from wrong when the law is ass backwards???

[Will]

So by the company calling and leaving a message in attempt to get in touch with you, is violating the FDCPA. Now my question is "What should one do when the call and leave a message?" I have been called two to three times a week concerning a debt and wonder what I should do. I have ask for paperwork on the debt, that I have not recieved, and all I ever hear is "You have 24 hrs to call us back with x amount of dollars to resolve the debt owed."

[Bob C]

Most recently, in Foti v. NCO Financial Systems, Inc., a New York district court rejected the defendant’s argument that the term “communication” does not include a voice mail message where the caller does not specifically reference the debt.16 The defendant’s voice mail message did not include the language required by § 807(11), and the defendant argued that the section was inapplicable because the message did not constitute a “communication.” It further argued its “interpretation was necessary to avoid placing debt collectors in a virtual ‘Hobson’s choice’ — debt collectors must disclose their identity to comply with § 1692e(11) requirements, but are prohibited from leaving a message identifying themselves as such by § 1692c(b)[.]”17 In response to the defendant’s argument, the court stated as follows:

“NCO’s argument is essentially based on the assumption that it is somehow entitled to leave pre-recorded messages…However, just because a debt collector is permitted to continue to attempt to collect the debt does not entitle the collector to use any means, even if those means are the most economical or efficient…In this case, the fact that NCO may not be able to leave a pre-recorded message that complies with both § 1692e and § 1692c(b) of the Act in no way warrants a conclusion that ‘communication’ should be narrowly interpreted. Rather, it merely suggests that a debt collector is not permitted to leave a pre-recorded message in violation of the FDCPA. Debt collectors, however, could continue to use other means to collect, including calling and directly speaking with the consumer or sending appropriate letters. Thus, the alleged ‘Hobson’s Choice’ in this case is self-imposed by NCO. It is only because of the method of debt collection selected — calling and leaving the type of pre-recorded messages — that NCO is faced with this potential dilemma.”18

[Bob C]

Most recently, in Foti v. NCO Financial Systems, Inc., a New York district court rejected the defendant’s argument that the term “communication” does not include a voice mail message where the caller does not specifically reference the debt.16 The defendant’s voice mail message did not include the language required by § 807(11), and the defendant argued that the section was inapplicable because the message did not constitute a “communication.” It further argued its “interpretation was necessary to avoid placing debt collectors in a virtual ‘Hobson’s choice’ — debt collectors must disclose their identity to comply with § 1692e(11) requirements, but are prohibited from leaving a message identifying themselves as such by § 1692c(b)[.]”17 In response to the defendant’s argument, the court stated as follows:

“NCO’s argument is essentially based on the assumption that it is somehow entitled to leave pre-recorded messages…However, just because a debt collector is permitted to continue to attempt to collect the debt does not entitle the collector to use any means, even if those means are the most economical or efficient…In this case, the fact that NCO may not be able to leave a pre-recorded message that complies with both § 1692e and § 1692c(b) of the Act in no way warrants a conclusion that ‘communication’ should be narrowly interpreted. Rather, it merely suggests that a debt collector is not permitted to leave a pre-recorded message in violation of the FDCPA. Debt collectors, however, could continue to use other means to collect, including calling and directly speaking with the consumer or sending appropriate letters. Thus, the alleged ‘Hobson’s Choice’ in this case is self-imposed by NCO. It is only because of the method of debt collection selected — calling and leaving the type of pre-recorded messages — that NCO is faced with this potential dilemma.”18

[Bob C]

Most recently, in Foti v. NCO Financial Systems, Inc., a New York district court rejected the defendant’s argument that the term “communication” does not include a voice mail message where the caller does not specifically reference the debt.16 The defendant’s voice mail message did not include the language required by § 807(11), and the defendant argued that the section was inapplicable because the message did not constitute a “communication.” It further argued its “interpretation was necessary to avoid placing debt collectors in a virtual ‘Hobson’s choice’ — debt collectors must disclose their identity to comply with § 1692e(11) requirements, but are prohibited from leaving a message identifying themselves as such by § 1692c(b)[.]”17 In response to the defendant’s argument, the court stated as follows:

“NCO’s argument is essentially based on the assumption that it is somehow entitled to leave pre-recorded messages…However, just because a debt collector is permitted to continue to attempt to collect the debt does not entitle the collector to use any means, even if those means are the most economical or efficient…In this case, the fact that NCO may not be able to leave a pre-recorded message that complies with both § 1692e and § 1692c(b) of the Act in no way warrants a conclusion that ‘communication’ should be narrowly interpreted. Rather, it merely suggests that a debt collector is not permitted to leave a pre-recorded message in violation of the FDCPA. Debt collectors, however, could continue to use other means to collect, including calling and directly speaking with the consumer or sending appropriate letters. Thus, the alleged ‘Hobson’s Choice’ in this case is self-imposed by NCO. It is only because of the method of debt collection selected — calling and leaving the type of pre-recorded messages — that NCO is faced with this potential dilemma.”18

[Paul D.S. Edwards]

For those of you receiving messages without the call ID'ing themselves (especially if its to a cell phone), you might (just) want to see what sections of the TCPA they violated.

[Carrie Vesterfelt]

So, I have a very important question that I hope you can answer for me very fast...I have credit card companies calling me all day, there is one that calls every hour and does not leave a message, which has been going on for about a month now. I have another one that will call the house phone, leave a message "Carrie this is Paul, you need to call me back today at 1-800-blah blah, it is important that you contact me today." Right after, they call my cell phone and leave the same message. After they have left those two messages they continue to call all day...without leaving a message again. Since they leave two messages and continue to call all day the same day, is this a violation? Also, can they call every hour and leave no message??? As for the cell phone, I am not sure how they got the number, but I changed my voice mail to say "if you are a friend or family member please leave a message, other wise this is my CELL PHONE and do not call back again." So..do you have any insight to these phone calls, they are very irritating when they call 20 times in one day! Thank you for your time!

[dad]

Yesterday, PCR out of New York, left a message on my recorder that I thought was a clear cut case of violating several sections of the FDCPA. The message began with "This message is for Mr "smith" and Mrs "smith". This is PCR calling about a matter of importance .. so forth and so on. Now the interesting and I presume illegal part. "If this isn't Mr "smith" or Mrs "smith" you must stop listening to this message. After that PCR continued to speak about a DEBT collection attempt, etc. This seems to me to be pure ridiculous nonsense. I wasn't home at the time but my daughter and some friends listened to the entire message and advised me of such when I got home.

[John]

The original intent of FDCPA was to prevent abusive and unfair practices by debt collectors. Period! In their various rulings over the last 31 years the FTC and the courts have gone way beyond the original intent of the law. Both entities have attempted to make debt collectors and the agencies which employ them into targets for everyone who wishes to obfuscate the issue of their non-payment of a legitimate debt. The courts should be in the business of either validating or invalidating a debt. In most cases a person owing a debt would never have to deal with a professional debt collector if they would just work out the issue with their primary creditor.

It is my opinion that FDCPA and the huge bureaucracy it has spawned should be scrapped!

[Online Debt Collection Review]

Certainly there needs to be clarity for all instances of contact. I'd be interested to know how this turned out.

[Stan]

Today I received a message on a business answering machine from a collection agency about a debt that was paid off in January 2008. I am the former owner of this business and am working for this business part time. In this message the collector stated from whom the debt was owed, the amount of the debt, their name and phone #. To return a call as soon as possible before an asset and liability investigation which is to take place today at 4:00PM. Of course when my boss played the message with my co-workers around, I wanted to crawl under the counter. My question is: Is this legal??? Can the agencies discuss your personal business affairs on an answering machine not knowing who is around to hear this information???

[Shirley]

I had a debt collector leave a message on my cell voicemail a few days ago. He stated first thing, "I'm not sure if this is your number anymore, but this is regarding (my name) with Social Security #, and recited my SS #, he further went on to state he was contacting my employer and references and left all their names too. Since the law dosen't seem clear, or at least I haven't found yet, is it legal for collectors to leave such private information like a social security number on a cell phone voicemail? Any insight is appreciated.

[Mary]

Recently received a phone call from a collection agency (maybe NCO?). They left a message for someone else - not me - not family. It said we want to speak to Mr.........., if you are not Mr. ........, stop listening to this message immediately. I can only guess that this is illegal.

[Mary]

Another winner I have been getting from a collection agency for someone else's debt. They start off with, "you have been named as a reference.......I usually hang up at this point - this has happened several times in the last few months. I stated firmly to them the last time not to call my phone number any more or I would report them to the Attorney General. So far, no more of these phone calls.

[ashley]

I have received about 5-6 messages left on my answering machine from a debt collection agency. He says that "he is going to move into legal on this file and he needs a phone call back as soon as possible." Just wondering if he is allowed to do that?

[Judy Matthews]

The real shame is that whatever the legal landscape now, neither one of these messages is offensive or designed to do anything other than try to get the debotr to call. There is nothing about these messages that is attempting to abuse, harass or annoy. The real problem is that collectors and collection attorneys, like myself, have to constantly answer technicality lawsuits and threats of lawsuits from for profit consumer advocate attorneys that have made a cottage industry out of this law at the expense of the people they are supposed to represent. Yes, there are some collectors who make bolder violations of the law. Most are attempting to abide by it. Some choose to stay in the gray area because the law has been intereted so strictly against collectors that doing business is almost becoming impossible; that is the shame in the matter because we are talking about creditors who have valid legal debts.
A piece of advice to those of you tired of getting phone calls for other people or even for yourself.....pick up the phone make the call. Most of the time you will get a human being who will help out of their own interest to get the account resolved. If you get someone who is nasty and violates the law, consider yourself blessed because there are hundreds of consumer advocate attorneys available to take your case no matter how valid or invalid and threaten suit to get a settlement....account closed and money sometimes.
What is most frustrating about the law is that the easiest way to resolve everything is to get people on the phone together at least once and anything that stops that is not helping the process.
Just like every debtor is not a "deadbeat" not every collector is a vulture after your home. Training is truly undervalued in the collection industry and a lot of times minor violations occur like above is not company policy but aberrant individual behavior from not following rules, poor training in the law, or poor retention of the law. Most entry level collectors are no more than high school educated and it is getting increasingly difficult to expect all the legal technicalities to be complied with by employees without some level of expertise. No company can manage and create enough policies to comply the voluminous amount of law on the oral communications alone...which is contstantly changing. That is not an excuse but yet companies for the most part comply; however, there will always be technical violations because there is no way the way the law is now that people will not do the things above without change.
We need change, not change that requires more legal analysis, but change that meets the needs of both sides so that practical solutions can be made. Sorry, that may create less obfuscation and decrease the lawuits for any consumer advocate attorneys making a living off filing or threatening FDCPA nuisance suits.

[bluefire]

Kay johnson -

I'm a bill collector. They have to put on your credit that you settled and did not pay in full because that is what you're doing. They dont have a choice. Why would they say you paid off you bill completely if you didn't. It's common sense. just pay your bill.

[bluefire]

Stan -

It is NOT legal for a bill collector to leave that msg on a business # unless it is a business card or you own the business. Now it illegal to give the balance in a msg on any phone. Hope that helps.