Credit Policy for businesses and how to extend credit and manage credit risk

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Calling consumer debtors have long struggled with many operational questions. One such question is whether to leave a message with a third party or on an answering machine for an unavailable debtor to call the collector back.

Leaving telephone messages can trip and trap unwary debt collectors and result in violations of the FDCPA and fines and even imprisonment. Nonetheless, using proper planning, preparation, and practice can prevent such pit-poor performances.

The primary issues involved in the “phone message” question are three competing requirements of the FDCPA. Section 805(b) prohibits almost all communications with a third party in connection with the collection of a debt. Section 806(6) prohibits the placement of telephone calls without meaningful disclosure of the caller’s identity. Finally, Section 807(11) requires any initial communication with a debtor that is oral to include the “mini-Miranda warning” and disclose that a debt collector is attempting to collect a debt and that any information obtained will be used for that purpose.

The question not-so-succinctly put is “When an initial attempt to communicate with a debtor is by telephone and the debtor is unavailable, how can a collector leave a message that meaningfully identifies the caller’s identity, discloses that the debt collector is attempting to collect a debt, and still does not communicate with a third party in connection with the collection of the debt?

Let’s first look at how a third party disclosure might occur. Obviously, leaving a live message with a third party who is not the consumer or the consumer’s attorney, spouse, parent (if the consumer is a minor), guardian, executor, or administrator violates FDCPA Section 805(b). In addition, many states prohibit communication with a debtor’s spouse, so even leaving a message that is otherwise fully FDCPA compliant with a spouse may still violate state law.

The real “third-party message” possibility arises when a collector leaves a message on an answering machine. No collector can predict with certainty that a third party is not going to hear such a message. In many cases, the collector cannot be absolutely sure whether he or she has actually reached the consumer’s answering machine. How many times have you heard just the message, “Please leave a message after the beep.” Even an automated message that says, “You have reached [whatever number], please leave a message,” is no guarantee that you have reached the consumer’s machine.

A few federal district courts in California have weighed meaningful disclosure of a caller’s identity and Mini-Miranda issues against the possibility of a third party issue. These courts have come down in favor of fully disclosing the caller’s identity and leaving the mini-Miranda on the answering machine as opposed to worrying about what the courts consider to be the remote possibility that a third party may listen to the message supposedly left on the consumer’s answering machine in the consumer’s home.

These court decisions are very limited to their own facts and are only binding precedent in the same district courts in which they were issued. Until the issue is considered and decided in more courts in more states, depending on these limited California rulings to support the idea of leaving detailed messages including the full name of the caller and the caller’s company and the mini-Miranda may be a dangerous policy.

Until more courts in more states address and decide this issue, there will be no safe answer to the question of “What is the best telephone message to leave for an unavailable consumer?” Without more precedents in more jurisdictions, the safest answer may be that “the best message may be the one that you leave unsaid.” If no message is left on an answering machine, then no contents of a message will be available to serve as grounds for a failure to include meaningful disclosure of the caller’s identity or the mini-Miranda.

Another alternative is to treat all calls made as attempts to locate a consumer until the consumer is correctly identified as the answerer of the call. The specific ways to do this would be to establish a policy to treat all calls as being an attempt to obtain location information on the consumer until a live answer is obtained and the identity of the person answering the phone is determined to be correct consumer and disclose no more than allowed under FDCPA Section 804 in a message that states, "My name is Caller's Name and I am confirming location information concerning Consumer's Name. Please call me at 555-555-5555 ext 5."

This would keep you within the "location" exception of Section 806(6), which would allow placing phone calls without meaningful disclosure of the caller's identity and support the contention that such a message left was not yet a communication with the consumer such that the 809 mini-Miranda disclosures would not yet apply.

There is no guarantee, however, that such an approach will succeed to overcome the precedents in California that opine that meaningful disclosure of the caller’s identity and mini-Miranda are required in telephone messages. It is unclear, however, if the calls in those California cases were made after the identity of the owner of the phone number being called was indeed the consumer. Therefore, an argument could at least be made that, until the owner of the number being called is identified as the consumer, those precedents in California would apply.

There are no easy, hard and fast answers to the telephone message question. The ACA is working diligently with the Congress and with the FTC to resolve this industry-wide problem. In August of this year, the ACA made a formal written request for an advisory opinion from the FTC, urging the Commission to conclude that the mini-Miranda and disclosure of the caller’s identity as a collector is not required under the law.

Until Congress, the FTC, or more state or federal courts make the interpretation of the law more clear, other than using the “location message” policy discussed above, it may well be that the best telephone message may be the one you leave unsaid.

Kenneth R. Besser, J.D., is a member of Michelle Dunn's group Credit & Collections and works at RTMC.org, where he is responsible for client service.