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WBK Industry News - Litigation Developments

Sixth Circuit Holds That Debt Collection-Related Communications to Third Parties, Which Do Not Indicate the Existence of a Debt, Do Not Violate FDCPA

The U.S. Court of Appeals for the Sixth Circuit recently held that debt collection-related communications to third-parties, which contain only innocuous information and do not indicate the existence of a debt, do not violate the Fair Debt Collection Practices Act (FDCPA).

In Brown v. Van Ru Credit Corp., an employee of Van Ru, a debt collection agency, called a business owned by Brown.  The Van Ru employee left a message in the company’s general voicemail stating her first name and that she was with “Van Ru Credit Corporation.”  The message also asked for someone in the company’s “payroll department” to return her call and gave a telephone number and a “reference number.”

The complaint alleged that one of Brown’s employees heard the message and was aware that Van Ru was a debt collection agency. Brown’s employee also allegedly knew that any personal calls to the business were meant for Brown.

Brown sued claiming the call violated an FDCPA provision about communications with most third-parties that convey information directly or indirectly about a debt.  The trial court granted Van Ru’s motion for judgment on the pleadings, and the Sixth Circuit affirmed, holding that the information provided in the voicemail did not rise to even the minimal level of implying the existence of a debt.

The Court explained that having the word “credit” in its company name did not indicate Van Ru was a debt collection agency, since many different types of companies could have the word “credit” in their names.  Nor did a request to speak with someone in the “payroll department” indicate the call involved a debt.  Such a request would at most suggest that the caller sought payroll information about an employee or the business.  Likewise, the telephone number and “reference number” would only give the impression that Van Ru has some kind of business with the company, or was seeking to create some kind of business relationship.  In short, the information in the voicemail did not tend to make the listener better informed about the existence or state of Brown’s debt.

Finally, the impression or conclusion of Brown’s employee, that the call involved a debt of Brown’s (since the employee was allegedly aware that Van Ru was a debt collector and that personal messages left on the company’s voicemail were for Brown) was irrelevant.  The message itself did not convey this information and could not be reasonably construed to do so.

On a related issue, a decision from the U.S. District Court for the Western District of Missouri considered the FDCPA’s requirement about envelopes for mailings from debt collectors.  Such envelopes cannot contain any language or symbol, other than the debt collector’s address and the debt collector’s business name, if the name does not indicate that it is a debt collection business.  In McShann v. Northland Group, Inc., the debt collection agency’s account number for the debtor was visible through the window in the envelope which showed the debtor’s name and address.  The court noted that, taken literally, the statute would preclude putting the debtor’s name, address, or even postage on the envelope.  The court held that the account number, without any other context, was benign and not a violation, since it did not indicate that the communication involved a debt.  The court explained that the statute should not be read or applied to make violations out of benign language or symbols.

The WBK Firm regularly advises and represents companies throughout the United States in connection with the Fair Debt Collection Practices Act.