Recent Court Decisions Impacting the Industry

Recent Court Decisions Impacting the Industry

Favorable Decision Regarding Voicemails

An Oregon federal court issued a favorable opinion for the industry in December of 2015 in Peak v. Professional Credit Service. The voicemail at issue in the case was very similar to the voicemail from the well known Zortman opinion. The court held the voicemail was a communication, but not a communication "with" a third party. According to the court, it would be unfair to hold debt collectors liable for third party communications in these situations, unless it was reasonably foreseeable that a third party could overhear the message. Some of the factors the court found worked in the collector's favor were; (1) it was not reasonably foreseeable that a third party could hear the message (2) it was a cell phone; (3) the voicemail greeting identified only the plaintiff; and (4) plaintiff indicated it was the "best" number to reach her. The court noted that if only one of those three factors had been present, there would have been an issue of fact as to whether the disclosure was reasonably foreseeable, but because all three factors were favorable to the collector, the court granted summary judgment in favor of the collector.

Adverse Decision When Leaving a Message with a Third Party

Halberstam v. Global Credit and Collection Corp., No 15-5696, 2016 WL ------- (E.D.N.Y. Jan 12, 2016).

The collector called the consumer's number, a third party answered, stated the consumer was not home yet and asked to take a message. The collector then gave his name and number. When the collector was specifically asked what the call was regarding, the collector said it was about a "personal business matter."

The issue before the court was whether the collector, whose telephone call to a consumer is answered by a third party, may leave his name and number for the consumer to return the call, without disclosing that he is a debt collector, or whether the debt collector must refrain from leaving callback information and attempt the call at a later time.

The federal district court in New York ruled that the collector must not answer those questions, end the call, and try again later. The court's reasoning was that the collector withheld information about his identity as a collector, and this may induce the consumer to contact the debt collector - because the consumer does not know whose call he is returning. The court explained that the consumer may not wish to speak to the collector, and it was the undisclosed nature of the message with the third party that induced the consumer to call the collector. The court found that this is an undesirable result and so the debt collector must refrain from leaving callback information and attempt the call at a later time.

The key points/facts from this case are that if a third party asks, the collector is to state the name of their employer. Prior to that, they are required to give their name only. So the only information that was given that is not covered by the FDCPA are the call back number and personal business matter. This is a single district court decision that we understand is likely to be appealed to the 2nd Circuit Court of Appeals. The firm suggests you understand the theory of liability, review your procedure for interacting with third parties, and watch this case as it develops on appeal.

From the MAPlist:

There has been a significant amount of recent activity on this issue arising from the consumer bar - to include matters involving several members of the Halberstram family. We have gathered from our colleagues and friends who also defend the industry that there are several consumer plaintiff attorneys who are likely training their plaintiffs to have family members answer the phone and solicit a message from the collector.

Be aware of this issue if you regularly come in contact with NY and/or NJ firms such as: Harvey Rephen, Natasha Santiago, David Palace, Barshay Sanders, Fishbein and Maximov.

The path of least liability suggest that in this region collectors should respond: "No. Thank you. Have a nice day" if a third party asks to take a message.

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