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From Banking and Finance Law Daily, October 23, 2015

Request for return call not communication about consumer’s debt

By Richard A. Roth, J.D.

A debt collector’s voicemail asking for a return call from a company’s payroll department was not a communication with a third party about a consumer’s debt, the U.S. Court of Appeals for the Fifth Circuit has decided. The voicemail, which included the caller’s name, her toll-free call-back number, the debt collecting company’s name (which did not imply the company was a debt collector), and a reference number, did not convey any information about a debt to the person who listened to the voicemail (Brown v. Van Ru Credit Corp., Oct. 22, 2015, Rogers, J.).

The dispute was over a student loan, which the consumer conceded he owed. Van Ru Credit Corporation, a debt collector, called a business owned by the consumer and left a voicemail in what was referred to as the business’s “general mail box” asking for a return call from “someone in the payroll department.” The voicemail gave no information other than the caller’s first name and telephone number, Van Ru’s name, and a “reference number.” It did not disclose what the “reference number” referred to.

Based primarily on the single call, the consumer sued Van Ru under the Fair Debt Collection Practices Act, claiming a violation of the ban on communications with third parties about a consumer’s debt. The consumer added that the employee who listened to the voicemail knew Van Ru was a debt collector and knew that personal calls to the consumer at the business were intended solely for the consumer.

Trial court rejection. The district court judge looked at the FDCPA definition of “communication” and said it required that information be conveyed regarding a debt. At a minimum, it had to imply that a debt existed. Van Ru’s simple request for a return call from the payroll department failed to clear that low bar. As a result, the judge dismissed the suit.

Not a communication. The voicemail did not convey any information about the consumer’s debt, the appellate court agreed. The word “credit” in Van Ru’s name could have referred to many types of financial activities; the reference number and toll-free telephone number suggested either a business relationship or a desire to create a business relationship; and the request for a call from someone in the payroll department indicated only a desire for payroll-related information. The voicemail could have been related to a number of different things other than a debt owed by the consumer, the court said.

An earlier letter from Van Ru to the company asking for the consumer’s payroll information did not provide context for the voicemail, the court added, because there was no information about who saw that letter.

The Federal Trade Commission’s commentary supported the interpretation of what was a communication, the court added. The FTC also looked for information that revealed the existence of a debt.

Dissenting opinion. The decision to affirm the dismissal of the suit was not unanimous, as one member of the three-judge panel felt dismissal was premature. She focused on the significance of the reference number that was included in the voicemail.

According to the dissenter, the only relevant question was whether the voicemail conveyed information that “related to” the student loan. If the reference number was an account number issued by the lender, then including the number in the voicemail did convey information about the debt, she argued. Whether the individual who heard the number understood what it represented was irrelevant.

As a result, the dissenter believed the consumer should have had the opportunity to complete discovery into what the reference number represented before the suit was dismissed.

The case is No. 15-1323.

Attorneys: Gary D. Nitzkin and Travis Shackleford (Michigan Consumer Credit Lawyers) for William Brown III. Nicole M. Strickler (Messer, Stilp & Strickler, LTD) for Van Ru Credit Corporation.

Companies: Van Ru Credit Corporation

MainStory: TopStory DebtCollection KentuckyNews MichiganNews OhioNews TennesseeNews

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