Appeals Court Upholds Dismissal of FDCPA Third-Party Disclosure Case

Even though its representative may not have followed the exact protocols for placing a location information call, the Fifth Circuit Court of Appeals has upheld the dismissal of a Fair Debt Collection Practices Act case against a collection agency because the call in question did not meet the definition of a “communication” under the statute.

A copy of the ruling in the case of Fontana v. HOVG LLC, doing business as Bay Area Credit Service can be accessed by clicking here.

A representative of the defendant called the plaintiff in regards to an unpaid debt. The plaintiff did not answer the phone. Ten minutes later, the representative called the plaintiff’s sister. Here is a transcript of the conversation:

Fontana’s sister: Hello?
Collector: Hello, good afternoon, my name is Lisa Hayes calling you on a recording line. Am I talking to Zachary Fontana?
Fontana’s sister: This is not his number.
Collector: Oh—ah, so do you know him?
Fontana’s sister: Who . . . where are you from?
Collector: Ok, I’m calling from Bay Area Credit Service. Actually, it’s an important personal business matter for him, ok? Can I talk to the spouse?
Fontana’s sister: I’m not sure I want to give you his number, so what agency are you with?
Collector: Ok, uh, that is why I’m asking. Can I talk to the spouse so I can discuss about this?
Fontana’s sister: This is his sister, and this is not his phone number and I do not live near him, that is why I was going to have him contact you if it was that important.
Collector: It is an important personal business matter for him, ok. I will give you my call back number ma’am. You can provide my number and tell him to call me back.
Fontana’s sister: What agency is this with?
Collector: Bay Area Credit Service.
Fontana’s sister: Ok, I’ll tell him to give you a call.
Collector: Ok, you can see my call back number on your caller ID?
Fontana’s sister: Ok, I’ll tell him to give you a call.
Collector: Please tell him to call me back on this number.
Fontana’s sister: All right.

The sister called the plaintiff, who then called a lawyer. The plaintiff did call the agency back, but then filed suit, accusing it of violating Section 1692c(b) of the FDCPA, which prohibits collectors from communicating with any person other than the consumer, unless the consumer has provided his or her prior consent. The only exception to this requirement is if the collector calls a third party to acquire location information about the consumer.

A District Court judge granted the defendant’s motion to dismiss, which the plaintiff appealed, arguing that the defendant went beyond the confines of a location information call because the representative instructed the sister to have the plaintiff return the call.

But before it could make a ruling on whether the call violated Section 1692c(b) of the FDCPA, the Appeals Court sought to determine whether the call fell under the FDCPA in the first place — something it had never done before. In order to be considered a “communication” in connection with the collection of a debt, the message or conversation must convey information regarding a debt.

As the Appeals Court noted, there was nothing in the exchange between the representative of the defendant and the plaintiff’s sister that conveyed information regarding the existence of a debt. The closest that the conversation got was when the representative provided the name of the collection agency.

“The smallest piece of information about a debt that a debt collector could potentially convey to a third party is the debt’s existence,” the Appeals Court wrote. “Therefore, to indirectly convey information regarding a debt, a conversation or message would need to, at the very least, imply that a debt existed. Knowing the name of a debt collector does not imply the existence of a debt.”

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