Judge Dismisses Third Party Disclosure FDCPA Case and Opines on Nature of the Law

A federal district judge in New York last week dismissed an FDCPA case in which a consumer claimed a collection agency unlawfully disclosed his debt to a third party. The judge not only disagreed with the allegations in the case, but noted that the law itself might be an issue, writing, “The FDCPA is clearly out of touch with modern communication technology.”

The case, Zweigenhaft v. Receivables Performance Management (RPM), was filed in February. The plaintiff alleged that RPM violated the FDCPA when it left a voicemail on a debtor’s home phone that was heard by his son and returned the call. RPM identified itself as a debt collector in the voicemail.

The voicemail itself was relatively straightforward:

“We have an important message from RPM. This is a call from a debt collector. Please call 1(866) 212-7408.”

Zweigenhaft’s son heard the message and returned RPM’s call, during which the representative noted that he was not the alleged debtor and said that they would remove the phone number from their system.

The plaintiff contended that RPM’s voicemail and telephone conversation with his son violated the FDCPA. RPM counters that it never communicated that Mr. Zweigenhaft owed a debt to a third party in the voicemail or telephone call and therefore did not violate the FDCPA. The company moved for summary judgment.

Judge Raymond Dearie, in the Eastern District of New York, carefully explored the interplay of seemingly conflicting judicial opinions in the world of third party disclosure. He noted that courts are divided into two main camps on the matter: those that follow Foti and hold that “if a third party overhears the message, no matter what the circumstances, the debt collector has violated§ 1692c(b) regardless of the message’s content,” and those that focus on the nature and definition of a “communication,” like in the Marx case.

Dearie seemed to side with the latter and argued that legislative intent is important. He wrote that the “overall purpose of the FDCPA” is “to protect consumers from abusive debt collection practices and to do so ‘without imposing unnecessary restrictions on ethical debt collectors.’”

“To hold that RPM’s actions violated the statute would place an undue restriction on an ethical debt collector in light of our society’s common use of communication technology,” Dearie wrote. “RPM left Mr. Zweigenhaft one voicemail message, providing the minimum amount of information to remain compliant with the FDCPA and protect his privacy.”

The judge went further in his critique of the FDCPA and its failure to keep up with the times. He even mentioned a 2012 FDCPA reform bill introduced by Barney Frank that would have exempted debt collectors from liability when using approved language in voice mails and messages.

“Allowing debt collectors to leave voicemail messages when trying to collect a debt is in the interest of debtors and debt collectors alike,” Dearie noted. “The alternative is numerous, harassing hang-up phone calls that are a nuisance to the debtor and ineffective for the debt collector.”

In his concluding statement justifying the granting of RPM’s motion of summary judgment, Judge Dearie wrote, “RPM acted with care and caution to protect Mr. Zweigenhaft’s privacy, while availing itself of widely used technology to contact him. It defies common sense and the purpose of the FDCPA to categorize its actions as violating the statute.”