Debt Collectors' Dirty Little Secret

Debt collectors love aged debt.  No, really, they do.  Why?  Because they can buy the debt for about 1% of its face value.  Think about the potential to make 99 times your investment!  Of course, they love aged debt.

Aged debt, or debt that is outside the statute of limitations, can still be collected.  However, the statute of limitations is a complete bar to suit, should a debtor be sued on aged debt.  But, debt collectors buy large tranches of old debt and call, cajole, and threaten debtors in an effort to collect. These debt collectors collect all they can in a tranche, then sell the remaining debt to another debt collector who repeats the cycle.  This explains why debtors often receive calls from more than one debt collector on an old debt.

Debt collectors are most likely to violate the Fair Debt Collection Practices Act (FDCPA) because of the age of the debt and the potential payoff.  As one debt collector put it when explaining why he had an ex-convict to run his collections: "Boy Scouts just don't get the job done."

Here are some do's and don'ts if you receive a collection call on an aged debt:

1. Don't pay the debt;
2. Don't sign any repayment agreement;
3. Get the collector's address;
4. Write to the collector and explicitly tell the collector to stop contacting you;
5. Document each and every call the collector makes to you, particularly to a cell phone, for the purpose of suing the collector for violating the Telephone Consumer Protection Act;
6. Keep all paper communications from the debt collector; and 
7. Make contemporaneous notes of all call contents.

Remember, these folks are looking to make a huge profit at your expense.

www.debt-relief-law.com

866-279-9721

Voicemail Heard by Third Party Violates FDCPA

The U.S. District Court for the Southern District of Texas in Thompson v. Diversified Adjustment Service, Inc., No. H–12–922, 2013 WL 3973976 (S.D. Tex. July 31, 2013) held that where a debt collector left a voicemail heard by a debtor's mother, it had violated the FDCPA.

The debt collector left a message at the consumer’s mother’s residence which disclosed the existence of a debt. The message stated:

This message is for [consumer’s name]. If I’ve reached the wrong number please call me back at 866–923–2995 [unintelligible] the number and then disconnect now. By continuing to listen to this message you acknowledge you are [consumer’s name]. This message contains private information. This is [collection agency’s name]. This is an attempt to collect a debt, any information obtained will be used for that purpose. Please return my call to 866–923–2995. It’s very important to hear back from you. Thank you.

The consumer's mother eventually heard the message. The consumer sued, claiming the message violated § 805(b) of the Fair Debt Collection Practices Act (FDCPA) because the message disclosed the existence of a debt to a third party. The collection agency countered that the voice mail message left at the consumer’s mother’s telephone number was not a prohibited third-party communication, noting that the consumer gave her mother’s telephone number and address to the collection agency as her contact information.  

The court, citing numerous cases, concluded the debt collector’s voice message was similar to other messages that were found to be communications under the FDCPA. Next, the court found that the consumer was not required to show that the debt collector intended to disclose her debt to a third party in order to assert a claim under § 805(b). The court stated that while some sections of the FDCPA do require a showing of intent (e.g., § 806(5)), there was no such requirement to show intent under § 805(b). The court also stated the FDCPA’ s legislative history further supports the notion that the collector may be liable for leaving a voice mail message at the consumer’s mother’s telephone number, regardless of intent. Specifically, the court noted that Congress adopted several provisions to limit specific methods of communication that were especially likely to reveal the existence of a debt (e.g., postcard, language on envelopes), and that these provisions applied without regard to a debt collector’s intent. The court also noted other courts had rejected the notion that debt collectors were entitled to leave messages for consumers. Citing other cases, the court stated “[the debt collector] could have reduced the risk that its voicemail would be heard by a third party by not leaving a message and instead calling again later.” Further, the court stated that other courts have consistently held that debt collectors may be liable for violations under § 805(b) by leaving voice mail messages that were inadvertently heard by a third party.

Based on this analysis, the court granted the consumer’s motion for summary judgment in part, finding the message was actionable under § 805(b) of the FDCPA. A factual dispute remained as to whether the debt at issue was a “consumer debt” covered by the FDCPA.

www.debt-relief-law.com

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