Debt Collector: Don't Leave Message with 3rd Party for Consumer

The ongoing saga whether a debt collector attempting to reach the debtor by telephone may leave a message has taken a new twist.  The decision in a recent case may be rather harsh, but it at least provides a bright line for debt collectors to follow, at least in the Eastern District of New York.  In Halberstam v. Global Credit and Collection Corp., 2016 WL 154090 (U.S.D.C. E.D. NY January 11, 2016), the debt collector telephoned the debtor but the call was answered by another person who informed the caller that plaintiff “is not yet in” and asked if the caller wanted to leave a message, whereupon the caller stated:  “Name is Eric Panganiban.  Callback number is 1-866-277-1877… the direct extension is 6929.  Regarding a personal business matter.”  Id. at *1.

Plaintiff filed a putative class action complaint alleging defendant violated 15 U.S.C. § 1692c(b), dealing with debt collector communications with third parties and that provides:

Except as provided in section 1692b of this title ...a debt collector may not communicate, 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 District Court held that “[n]othing [in § 1692b] permits the debt collector to leave a response with the third party that will induce the debtor to call him back.”  Id. at *2.

The defendant made several arguments to justify leaving the message, none of which impressed the court, including:

• The primary argument was that simply leaving call-back information, and not making disclosures revealing the caller was a debt collector, was not a “communicat[ion]… in connection with the collection of any debt” pursuant to § 1692c(b).  That is, defendant’s position was that it was not, during the call with the third party, attempting to collect a debt. But the court rejected this argument as “inherently circular - the call was not a communication in connection with the collection of a debt because a communication in connection with the collection of a debt requires disclosures, and since Panganiban did not give disclosures, it was not a communication in connection with the collection of a debt.”  Id. at *3.  

• The court rejected defendant’s “familiar “rock and a hard place” argument that collection firms often raise to claims under the FDCPA. If the call to the third party is a “communication,” defendant argues, then it had to give the § 1692e disclosures. But if it gave those disclosures to the third party, or even mentioned that it was a debt collector, then it would clearly be violating § 1692c(b).”  Id.  The court observed that simply responding to the invitation to leave a message by saying “No, thank you, I’ll call back” would have avoided violating either section.  “Instead, Panganiban seized upon the opportunity presented by the third party to obtain a debtor-initiated contact, something the debtor may or may not have done on his own, or in response to a dunning letter with full disclosures, in contrast to an unadorned callback message about a “personal business matter.” Nothing required Panganiban to seize that opportunity, and the prohibition on relaying information through a third party prohibited it.”  Id.  

• It would have been rude to simply hang up.  The court countered that there is a polite way to end a telephone call by simply declining the offer to leave a message and informing the person answering the call that the caller will call back later.  “[S]oliciting a call back to a collection agency unidentified as such through a third party is simply not a means of collection that is permitted under the restrictive statutory scope of a collector’s efforts.”  Id.

• Making repeated calls until the collector actually reached the debtor could run afoul of another prohibition that prohibits harassment.  The court countered that a debt collector must often make the decision how many times to call the debtor when it has difficulty reaching him.

The district court granted summary judgment for plaintiff and denied defendant’s motion to dismiss.

While this decision may be considered a rather harsh outcome in response to an arguably innocuous message, debt collectors should not be surprised to learn of yet another decision punishing behavior that a court sees as failing to strictly conform to the purpose of the FDCPA – to protect consumers from unfair and underhanded debt collection methods, from the point of view of the least sophisticated consumer. The court did, at least, draw a bright line by explaining what would be considered a lawful communication by a debt collector to a third party – at least in the part of New York under the jurisdiction of the District Court for the Eastern District of New York.

Published by Hutchens Law Firm on April 5, 2016