Many consumers on this and other Boards are aware of two key elements of FDCPA -
(1) That there is a 30 day period after “Initial Communication” during which a consumer may invoke VOD rights, and if so invoked the Collector is prohibited from collection activities until VOD is provided (FDCPA §809), and
(2) That FDCPA broadly gives the consumer the power to limit or restrict communications from a Collector (FDCPA § 805 and 807).
These sections of law, taken individually and in tandem, create a lot of confusion and many questions about the applicability of the laws cited.
First, let’s see what is meant by “Communication” under FDCPA. Section 803 defines “communication as
“(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.”
Therefore, a report to a CRA is definitely “communication”, as are telephone calls, letters and emails. The qualifying characteristic of the definition is the phrase “information regarding a debt”. Therefore, the simple act of leaving a message (with a person or on voice mail) that simply gives the caller’s name and phone number, and even possibly a simple generic “important” statement would not meet the definition of Communication and therefore, if done in the face of a valid VOD request would not be a violation. Expanding on the message by stating “important legal matter” would be sufficiently vague as to not give notice that a debt exists and therefore imparts no “information”. Stating the name of the creditor/CA/JDB would obviously be a violation.
This does not mean a collector calling and stating “Hi, it’s me again” does not represent a FDCPA violation - you just have to know which FDCPA Section is it’s a violation of. The statement itself does not rise to the level of a “communication” as defined in FDCPA, but could be a violation of §805( c ) if there is a Cease-Communication request in place or § 806 if placed repetitively in an attempt to harass or annoy.
NCLC disagrees with the above interpretation. To quote Section 220.127.116.11 of the NCLC Fair Debt Collection Practices Manual:
“18.104.22.168 Communication Broadly Covered
This provision may be applied to personal visits and other means of communicating, such as by telephone, mail, and telegram.
According to the FTC staff, the word “communicate” in this provision is not limited by the Staff’s narrow construction of the definition of “communication”. If it were, this subsection would not apply to communications in which the debt collector did not specifically mention the debt, such as a late night phone call saying “Hi, it’s me again” or “Hi, I’ll call again tomorrow night”. Such calls are precisely the type of communications contemplated by the drafters of this subsection and may also violate other sections of the Act”
The NCLC manual goes on to cite the above other sections of FDCPA but provides no case law to substantiate their conclusion. I believe it is much safer for us to adopt my position and argue the type of calls the NCLC uses as examples under the harassment prohibitions in FDCPA, which IMHO is a much stronger argument.
Let’s look closer at the prohibitions on “communication” under FDCPA. The operative section is §805 which I include in full:
“§ 805. Communication in connection with debt collection [15 USC 1692c]
(a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt --
(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antimeridian and before 9 o'clock postmeridian, local time at the consumer's location;
(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or
(3) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication.
(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except --
(1) to advise the consumer that the debt collector's further efforts are being terminated;
(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
If such notice from the consumer is made by mail, notification shall be complete upon receipt.
(d) For the purpose of this section, the term "consumer" includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator. “
Section 805(a) gives the collector his “safety valve” -
“Without the prior consent of the consumer given directly to the debt collector “ and
“ the express permission of a court of competent jurisdiction”.
Absent either of these conditions, Section 805 is in full operation. Just what does 805 prohibit?
1. Communication “at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer”,
2. All communication with the consumer if the collector knows the consumer is represented by an Attorney, and
3. Communication “at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication.”.
Let’s look at each of these individually:
The Courts are clear on what is an “inconvenient” time or place for a Collector to communicate with a consumer. The answer is simple - the consumer has the absolute right to determine it with no restrictions. The collector must respect the consumer’s statement that being called at a certain place or a certain time is “inconvenient.” While the Act gives 8AM to 9PM as a safe time to communicate, this provision is easily trumped by a consumer stating that those hours are “inconvenient” for that consumer. The following have been upheld by Courts as “inconvenient”:
* daytime hours for a consumer who works nights
* when a consumer was entertaining family and friends
* when a consumer was eating a meal
* when a consumer was attending to an illness in the family
There is no statutory prohibition on calling on Sundays, and FDCPA treats Sunday as any other day, but a consumer’s religious proscriptions on conducting business on the consumer’s Sabbath is certainly within the definition of “inconvenient”. This Sabbath can be Friday, Saturday or Sunday depending on the consumer’s faith. This also applies to non-Christian high holy days, such as Yom Kippur.
The prohibition on Inconvenient Communication is also extended to places. The following have been upheld by Courts as Inconvenient places for Communication:
* A neighbor’s home
* a hospital
* a funeral parlor
* the consumer’s place of employment
But be forewarned, the Inconvenient Place or Time protections (except for the Statutory prohibition on calls between 9PM and 8AM do not come into place until the Consumer affirmatively asserts them. The Collector must be warned in advance that communication at a particular place or time is Inconvenient for the communication to become a violation. A smart Collector will always ask, after ascertaining the consumer’s identity, “Is this a convenient place and time to talk?”
The workplace prohibition is an even more interesting one. It is the only actual place that FDCPA addresses specifically. FDCPA places a specific burden on the collector for employment contacts: “ if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication”.
Let’s face it - workers talk to each other. If a co-worker is getting collection calls at work, it is often that others know of it. If worker “A” gets a call from collector “X” at work and informs the collector that “My employer does not allow personal calls at work”, I would take the position that worker “A”’s statement just invoked the FDCPA prohibition on workplace communication for all other workers at that place of employment. The statement is simple: My Employer does not allow....” That is a blanket statement and no collector can reasonably infer that it applies to that consumer alone, but is a blanket policy for all employees of that firm. The first call to worker “B” at that firm is an automatic FDCPA violation.
The collector will respond with “but Consumer “B” did not invoke the Inconvenient Place doctrine, so how could I have known? The answer resides in the act in the phrase “has reason to know”, and being previously told is definitely “reason to know”.
A common misconception is that a collector is prohibited from contacting (or reporting a Trade Line) to a Credit Reporting Agency. This is simply incorrect and several Courts have so ruled. It is interesting to note that Courts have ruled that a collector who makes a threat to report a debt to a CRA in the Initial Communication letter if the debt is not paid within a period shorter than the 30 days permitted to request VOD has violated FDCPA, while a collector who does not make the threat but simply does report has NOT violated. The reasoning is simple - overshadowing the 30 day period, not prohibited communication.
Since the VOD prohibition on Continued Collection Action is an absolute, a common question is "Can a collector report a derogatory TL to a CRA when I have disputed a debt or demanded Verification?" The answer to this is an unqualified "maybe" since I have been able to find no case law that either prohibits it or supports it. The logical answer would be this: Since Collection activity is by definition an action designed to elicit payment, it must necessarily be directed to the consumer. A report to a CRA is directed to the CRA and the whole world, not to the consumer. I have long held this to be the case when people have argued that a TL placement on a CRA is "Initial Communication". I contend it is not, since it is not directed to the consumer and obviously does not have the VOD Warnings or the Mini-Miranda. The significance of this is that a TL placement does not start the 30 days to demand VOD with FDCPA protections in place. To be consistent I would also have to take the position that placing a TL on a CRA file with a VOD demand outstanding is not a violation of FDCPA since it is not a demand for payment and is not a communication with the consumer at all. As I stated above, the threat
to place a TL on a CRA with a VOD outstanding is a FDCPA violation, since it is a communication to the consumer and is a threat made to elicit payment. The actual act of doing it, however, is not. There are Court decisions that support this position.
Moving on to the 30 day VOD periods, the Courts have consistently ruled that the 30 day VOD doers not preclude a collector from attempting to collect, but there are restrictions on what a collector can do during the 30 day VOD period. Simply put, the FTC and the Courts have ruled that the collection efforts cannot minimize, or overshadow, the VOD rights statement. Here are some examples of what Courts have found to be Overshadowing:
* Demands for payment in five, ten or fifteen days in the same communication as the VOD rights statement that gives 30 days to request Verification.
* Threatening suit within a time frame of less than the 30 day VOD time frame
* Threat to make an adverse credit report before the 30 day VOD time period has expired
* Threats of unspecified dire consequences for nonpayment before the 30 days
Once the VOD is made within the 30 day period of initial communication (which begins on RECEIPT of Initial Communication), the collector is prohibited from taking any collection action until Verification is provided. The Courts have ruled the following to be violations:
* Making an offer to settle the debt
* taking an administrative garnishment without responding to VOD letter
* seeking a default judgment
* sending verification to someone other than the consumer
* when reporting to a CRA, failing to report debt as disputed (also a FCRA violation)
* Filing suit
* burying the debt validation notice on page 8 of a 16 page communication
In summary, consumers have enhanced rights in the first 30 days of receipt of a collector’s Initial Communication, and knowing these enhanced rights, and enforcing them vigorously, should be a priority.