Foti application to collection activities is spreading.(SELECTED * TOPIC)

The decision in Foti v. NCO Fin. Sys., Inc. has created a significant dilemma for the debt collection industry. The New York District Court in Foti ruled that a pre-recorded message left on the consumer's answering system by the debt collector was a "communication" in connection with the collection of a debt. Since the pre-recorded message was left with the consumer after the initial validation notice was sent, the Court determined that the message was a subsequent communication thereby triggering the disclosure requirements in Section 807(11) that the communication is from a debt collector. Leaving a message with this disclosure creates an inherent challenge since complying with Foti exposes debt collectors to potential allegations of improper third party disclosure.

Until now, many debt collectors had hoped to limit Foti's application to New York collection activities. However, due to a recent decision issued by the United States District Court of the Middle District of Florida, Belin v. Litton Loan Servicing, LP, Florida debt collectors must adhere to Foti-type standards when leaving messages for a consumer.

In Belin, the debt collector left messages on the consumer's mother's answering machine that provided the name of the debt collector, a phone number to call and directions to have the consumer call that number. The messages did not disclose that they came from a debt collector as required by the FDCPA. The debt collector argued that since the messages did not convey information regarding the debt, the messages were not communications under the FDCPA and, therefore, were not subject to the disclosure requirements of Section 807(11).

Relying on the findings in two other cases and Foti, the Belin court rejected the debt collector's argument and concluded that even messages left on answering machines that do not directly convey information about a debt are still communications under the FDCPA because they convey information about a debt indirectly, since the purpose of the message is to get the consumer to return the call to discuss the debt. Accordingly, the Florida District Court held that the messages constituted communications that could support a violation under the FDCPA.

The Belin decision creates even greater challenges than Foti because the decision found that leaving a message on a third party's answering system was a communication subject to the disclosure requirements under the FDCPA, whereas Foti referred only to messages left on the consumer's answering system.

In light of Foti and Belin, Florida's collection industry must now focus their attention on this latest legal trend. While there is no proven course of action that will guarantee against your exposure, ACA International has drafted suggested language that may be used when leaving messages for the consumer on an answering system. See ACA Fast Fax Document Number 1146. Becoming aware of the issues ...