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Dreher Tomkies LLP
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COLLECTION MESSAGES CONTINUE TO BE CHALLENGED

The United States District Court for the District of Minnesota recently held that a collection agency could be held liable under the federal Fair Debt Collection Practices Act for (i) failing to provide a debtor with required information in prerecorded debt collection messages and (ii) including language within the messages arguably suggesting that legal action had been taken when it had not. Baker v. Allstate Fin. Servs., Inc., Civil No. 07-cv-2579 (JNE/JJG), 2008 WL 2042622 (D. Minn. May 13, 2008).

In Baker, a collection agency left five collection messages on a debtor’s answering machine. In four of the five messages, an individual collector identified himself by name and named the collection agency on whose behalf he was calling. In one of the messages, the individual gave his name, but did not identify the collection agency. Three of the messages referenced a “matter pending in the State of Minnesota” even though no legal action had been instituted against the debtor in Minnesota at the time the messages were left.

The debtor filed a class action against the collection agency on grounds that the messages violated the FDCPA, which the collection agency moved to dismiss. The debtor claimed that the collection agency violated Section 1692d(6) of the FDCPA, which prohibits a debt collector from placing telephone calls without meaningful disclosure of the caller’s identity. According to the court, Section 1692d(6) essentially requires a caller to disclose the caller’s name, the debt collection company’s name and the nature of the debt collector’s business. The court indicated that the messages under consideration did not indicate the nature of the collection agency’s business and one of the messages failed to provide the collection agency’s name. For these reasons, the court found that the debtor stated a claim under Section 1692d(6) with respect to all five messages.

The debtor also claimed that the collection agency violated Section 1692d’s general prohibition against harassing, oppressive or abusive behavior and Section 1692e’s prohibitions against false, deceptive and misleading representations because three of the messages falsely implied that a legal case was pending against the debtor in Minnesota. The court indicated that the references to a “matter pending in the State of Minnesota” could falsely suggest to an unsophisticated consumer that legal action had already been taken against the debtor. Thus, the court found that the debtor stated a claim under both Sections 1692d and 1692e.

See DLT Alert of March 14, 2007 and our 2006-2, 2006-5, 2007-1 and 2007-6 Debt Collection Digest Summaries of State Law Developments for additional cases in which debtors have challenged the use of prerecorded collection messages under the FDCPA and other federal and state statutes.