What Can Debt Collectors Say On Answering Machines?

Talk about an uncomfortable situation. A reader recently contacted us about a message she found on her answering machine.  The recorded message was regarding a collection for her father who does not live with her:

Dear Gerri,

I’m very concerned that a debt collector may have broken the law.  Long story short, I recently received this message from a debt collection company. Play to hear voice mail message »

I’m concerned because this message wasn’t for me—it was actually for my father, who lives in another state. As far as I know, under the Fair Debt Collection Practices Act, debt collectors are only allowed to contact a relative or neighbor once in attempt to reach the debtor… but I was under the impression that legally, debt collectors are not allowed to share “why” they’re calling (in an attempt to collect a debt) unless they are speaking to the actual account holder, right?  My father would be mortified if he knew that I knew he were having financial problems. Did this collector break the law?

— Cindy (A Concerned Family Member)

Cindy raises an important question. When debt collectors leave messages for debtors on answering machines, how much can they say? The answer is not as clear as you might think it would be.

“The law on debt collection voice mails is unclear, as the most current case regarding the issue is on appeal” Sonya Smith-Valentine, an attorney with Valentine Legal Group, LLC, points out.

I’ll get to that case in a moment, but let me back up and describe the problem first. A federal consumer protection law, the Fair Debt Collection Practices Act (FDCPA), describes practices debt collectors can’t engage in when trying to collect debts. But it includes no specific instructions for voice mail messages.

“You have to go back to the FDCPA when it was first promulgated,” says Joel D. Leiderman, Senior Associate Attorney at the collection law firm of Forster & Garbus LLP in Commack, NY. “Most people didn’t even have answering machines then. These are issues that weren’t contemplated.”

The FDCPA does say that a debt collector is breaking that law if it fails to disclose, in its initial communication with the consumer (which could be in writing or orally) “that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose.” In addition, in subsequent communications, the debt collector must disclose that the communication is from a debt collector.

Ok, so that seems simple enough. The debt collector should provide that information when leaving a message, right?

Not so fast.

If the debt collector knows he is only leaving a message for the debtor, it would seem to be fairly straightforward. But what if that message might be heard by someone else, as in Cindy’s case?

The FDCPA also gives debtors a degree of privacy. It prohibits debt collectors from communicating with someone other than the debtor except to locate the debtor (exceptions include the debtor’s attorney, a cosigner or spouse). In those cases, the collector can identify himself, state that he is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify his employer. But he cannot state that the consumer he’s trying to locate owes any debt; and he generally can’t communicate with such person more than once.

Next: Collection Calls and Legal Technicalities »

Collection Calls and Legal Technicalities

In the past, “the FTC had said that leaving a message was not a communication,” says Leiderman, whose firm represents creditors. But then “there were a couple of (court) cases that said leaving a message on an answering machine was a communication. If it was not a communication you didn’t have to disclose the indebtedness. You didn’t have to say what it was about.” But if the message is a communication, then it must include required information about the debt. That’s where it gets tricky.

Both attorneys pointed to a case, Koby v. ARS National Service, Inc, 2010 WL 1438763 (S.D. Cal. March 29, 2010) that is currently on appeal to the Ninth Circuit Court of Appeals. Smith-Valentine said:

In Koby, the United States District Court for the Southern District of California found that the following voice mail message was not a “communication” within the meaning of the Fair Debt Collections Practices Act (FDCPA): “This is Brian Cooper. This call is for Mike Simmons, I need you to return this call as soon as you get this message 877-333-3880, extension 2571.” It was because the message did not directly or indirectly reference any debt.

However, the court also found that another message did constitute “communications” under the FDCPA, and held that the message violated the FDCPA by failing to “meaningfully disclose” the identity of the collector: “This is Robin calling for Michael Koby, if you could please return my call at 800-440-6613. My direct extension is 3171. Please refer to your Reference Number as 15983225.” The inclusion of a reference number in the message is a reference to the alleged debt.

Stephen E. Schwartz, a Clifton-NJ based consumer attorney agrees “there is no clear prohibition under the FDCPA against a debt collector leaving a voicemail message.” But he says that debt collectors “should leave as much information as possible and at the very least the debt collector should leave their identity and the nature of the call. If a consumer gets a call from an alias — meaning the debt collector uses a fake name — or just a name and number, then the consumer should save the tape because they have evidence of a potential FDCPA in their hands.”

The new Consumer Financial Protection Bureau will apparently take over responsibility of enforcing the Fair Debt Collection Practices Act from the FTC. It should clarify this issue so that debt collectors have clearer guidelines they can follow when collecting debts. This will benefit both collectors and the consumers from whom they are collecting.

In the meantime, there are some specific things debt collectors clearly can’t do when they leave voice mail messages for consumers:

• Use profane or obscene messages, or racial slurs,
• Threaten a consumer with arrest or legal action unless the collector legally can take that action, and intends to do so,
• Falsely represent that a consumer committed a crime,
• Call repeatedly solely for the purpose of harassment.