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. 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.
 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.