Consumer Finance Litigation

In a case of first impression, the Eleventh Circuit recently held that a voicemail constitutes a "communication" under the FDCPA, and can thus trigger the mini-Miranda requirement, but an individual collecting on behalf of a debt collector is not required to disclose his or her identity in order to comply with the "meaningful disclosure" requirement under the FDCPA.

In Hart v. Credit Control, LLC, ___ F.3d ___, 2017 WL 4216029 (11th Cir. 2017), Plaintiff Stacey Hart filed suit alleging that Credit Control, LLC's voicemail violated § 1692e(11) of the FDCPA by failing to include the required disclosures for initial communications. Hart further alleged that Credit Control's voicemail violated § 1692d(6) when the individual collecting on behalf of Credit Control failed to disclose his or her name and, thus, failed to provide "meaningful disclosure" under the FDCPA. The district court granted Credit Control's motion to dismiss, finding that the first voicemail was not a "communication" and that the voicemail provided "meaningful disclosure" because it provided enough information to not be misleading. Hart appealed.

The Eleventh Circuit first addressed whether Credit Control's voicemail was an initial communication as defined by the FDCPA, which would require Credit Control to provide the disclosures under § 1692e(11). The court looked to the statutory language and stated that the FDCPA defines "communication" as "the conveying of information regarding a debt [either] directly or indirectly to any person through any medium." See 15 U.S.C. § 1692a(2). The court held that Credit Control's voicemail fell squarely within this broad definition of "communication," and "the only requirement of the information that is to be conveyed is that it must be regarding a debt." Specifically, the court held that a voicemail would be considered a communication if it reveals that the call is from a debt collector and provides instructions and information to return the call. Because Credit Control's voicemail was the initial communication, the court held that Credit Control was required to give Hart the mini-Miranda warning.

Turning to the issue of whether "meaningful disclosure" is provided when an individual caller fails to provide his or her name but provides the name of the debt collection company and the nature of the call, the court noted that neither the Eleventh Circuit nor its sister circuits had addressed the issue. The court determined that an individual's name is ancillary, and providing the debt collection company's name gives the consumer enough information to protect herself if a debt collector engages in abusive conduct during collection attempts. In reaching this conclusion, the court rejected Hart's literal interpretation of the "caller's identity" as set forth in § 1692d(6). Thus, the court held that providing the debt collection company's name and the nature of the company's business is sufficient to comply with § 1692d(6)'s "meaningful disclosure" requirement. Accordingly, the court held that Credit Control's voicemail did not violate § 1692d(6).

With the Hart decision, the Eleventh Circuit is the first circuit court of appeals to decide whether an individual must disclose his or her name when collecting on behalf of a debt collection company. While the court's holding with respect to this issue arguably eases the burden on debt collectors, the court's holding with respect to Credit Control's voicemail-which was virtually identical to the voicemail at issue in Zortman v. J.C. Christensen & Assocs., Inc., 870 F. Supp. 2d 694 (D. Minn. 2012)-muddies the water with respect to third party liability. Significantly, the Hart decision seems to contradict the FTC's directive that debt collectors use the language authorized in Zortman. Thus, debt collectors now face a Catch-22, as using the Zortman message in an initial voicemail may create potential liability under the FDCPA.