In an unpublished opinion, the United States Court of Appeals for the Fourth Circuit recently held that repeated debt collection phone calls to a third party did not violate the Fair Debt Collections Practices Act (“FDCPA”). The debt collector was allowed to continue calling the third party until it reasonably believed it had received a complete response regarding whether the third party had information about the location of the debtor. (Worsham v. Accounts Receivable Management, Inc., (2012 WL 5503980, C.A. 4 (Md.), November 14, 2012).
Accounts Receivables Management, Inc. (“ARM”) was attempting to locate a debtor, Martha Bucheli (“Bucheli”), who is the sister-in-law of Michael Worsham (“Worsham”). ARM discovered that Worsham’s phone number might be a possible contact for Bucheli and called him approximately ten times in late May 2010. Worsham only answered two of ARM’s phone calls. Both times he answered, Worsham heard a prerecorded message that told “him to press ‘1’ if he were Martha and ‘2’ if he were not Martha.” In response to one of the calls, Worsham pressed “2,” but upon hearing more prompts and options, he hung up the phone instead of responding. On the second occasion, Worsham hung up the phone and did not press “2” to indicate he was not Bucheli. Worsham never talked to a live ARM representative.
Worsham filed a lawsuit against ARM alleging violations of the FDCPA, the federal Telephone Consumer Protection Act, and the Maryland Telephone Consumer Protection Act. A federal district court granted summary judgment in favor of ARM.
The court of appeals affirmed the decision of the district court. Worsham claimed ARM violated 15 U.S.C. § 1692b. The court noted that “[a]lthough third parties may understandably find debt-collection calls bothersome or inconvenient,” pursuant to § 1692b, “Congress has allowed debt collectors to call third parties on multiple occasions in certain instances.” Section 1692b provides that if a debt collector communicates with a third party, it “shall ‘not communicate with any such person more than once . . . unless the debt collector reasonably believes that the earlier response of such person is . . . incomplete and that such person now has . . . complete location information.’” The court concluded that Congress’s “use of the word ‘reasonably’ indicates that this is an objective standard that the debt collector must meet to avoid liability under the FDCPA.”
Worsham alleged that he after he pressed “2” to indicate he was not Martha, he heard more prompts and options. The court concluded that a reasonable person would believe that his response to ARM’s phone call regarding Bucheli was incomplete. A reasonable person would also believe that he “would have knowledge of Bucheli’s location at the time of a later call based on his number appearing as a possible contact for Bucheli.” ARM was allowed pursuant to § 1629b(3) “to continue calling Worsham until it reasonably believed that it had received a complete response, so ARM’s additional phone calls did not violate the statute.”
Worsham claimed that ARM violated 15 U.S.C. § 1692c(b), which prohibits a debt collector from communicating in an attempt to collect a debt with anyone other than the consumer, his attorney, a consumer reporting agency, the creditor, the creditor’s attorney, or the debt collector’s attorney. Section 1692c(b), however, specifically exempts from its reach any calls permitted by § 1692b. Because ARM’s calls were allowed under § 1692b, it did not violate § 1692c(b) when it called Worsham.
Worsham also alleged ARM violated 15 U.S.C. § 1692d(6), which prohibits the placement of telephone calls that do not provide meaningful disclosure of the caller’s identity. Like § 1692c(b), § 1692d(6) specifically exempts from liability calls that are permitted under § 1692b. ARM’s calls to Worsham were permitted under § 1692b and therefore they did not violate § 1692d(6).
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