COLORADO COURT OF APPEALS HOLDS THAT MESSAGE DELIVERY FIRM WAS A COLLECTION AGENCY
Udis v. Universal Communications Company, 2002 WL 538921 (Colo. App. Apr. 11, 2002)
by Michael C. Tomkies and Tiffany D. Scurti-Swain*
The Colorado Court of Appeals on April 11, 2002 reversed a lower court’s determination that a message delivery firm was not a “collection agency” as defined by the Colorado Fair Debt Collection Practices Act. The court remanded the case to the lower court for further proceedings consistent with the opinion.
The appellate court found that the message delivery firm was a collection agency because its activities brought it “sufficiently close to indirectly attempting to collect a debt.” The delivery firm offered a telegram notification service in which debtors received a telegram that asked the debtors to call a specific number. These telegrams did not contain the so‑called “mini‑Miranda” disclosure, a mandatory statement that a communication is being made in connection with the collection of a debt. When a debtor called the specified number, the debtor received a message while a caller identification device would capture the debtor’s phone number, even if the number was unlisted. The delivery firm billed its customers separately for the message delivered and the phone numbers that it sold to subscribers. The delivery firm argued that it was a mere message delivery service and could not indirectly collect debts. However, the court believed the delivery firm gathered personal information about debtors which its customers used to collect debts. Consequently, the delivery firm’s activities fell within the broad statutory definition of “debt collector,” which includes persons indirectly attempting to collect a debt.
Creditors engaging third parties to assist in collection efforts should review third party activities carefully. Many state fair debt collection statutes include within their scope “indirect” collection efforts such as activities that merely assist in the collection of a debt. If we can be of any assistance in reviewing third party activities or if you would like a copy of the decision, please do not hesitate to call us.
*Mike is a partner and Tiffany is an associate with Dreher Tomkies LLP. Both are contributors to the Firm’s Debt Collection Digest. Both can be reached at (614) 628-8000.