Banking and Finance Law Daily Collector’s phone conversation with consumer’s sister not a ‘communication’ violating FDCPA
Monday, March 1, 2021

Collector’s phone conversation with consumer’s sister not a ‘communication’ violating FDCPA

By Thomas G. Wolfe, J.D.

In a case of first impression for the Circuit, the panel emphasized that "conveying information about a debt collector is not the same as conveying information about a debt."

Rejecting a consumer’s claim that a debt collector’s phone call to his sister violated the Fair Debt Collection Practices Act’s prohibition against communicating with third parties about a debt, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit ruled that the phone conversation could not be construed as a "communication" as defined by the FDCPA (15 U.S.C. § 1692a(2)). Determining that the factual record showed that the collector’s representative "revealed only the name of the debt collector," but did not convey information to the consumer’s sister about the purported debt nor implied that a debt existed, the appellate panel upheld the federal trial court’s dismissal of the FDCPA claim and judgment in favor of the debt collector. "[C]onveying information about a debt collector is not the same as conveying information about a debt," the panel emphasized (Fontana v. HOVG LLC, d/b/a Bay Area Credit Service, LLC, Feb. 26, 2021, Elrod, J.W.).

In 2019, a representative of HOVG LLC, a debt collection service that does business as Bay Area Credit Service, LLC, first telephoned a consumer—plaintiff Zachary Fontana—who was believed to owe a medical debt. When the consumer did not answer the call, the Bay Area Credit representative did not leave a message. Shortly afterward, the representative then called the telephone number of the consumer’s sister and asked to speak with the consumer.

During that telephone conversation with the consumer’s sister, the collector’s representative provided her own name and that of the company—"Bay Area Credit Service." Among other things, the consumer’s sister stated, "This is his sister, and this is not his phone number, and I do not live near him; that is why I was going to have him contact you if it was that important." The Bay Area Credit Service representative responded, "It is an important personal business matter for him, ok. I will give you my call back number ma’am. You can provide my number and tell him to call me back."

Consumer’s FDCPA complaint. In particular, the FDCPA provides that debt collectors "may not communicate, in connection with the collection of any debt, with any person other than the consumer" or certain other prescribed parties to the debt "without the prior consent of the consumer" (15 U.S.C. § 1692c(b)). At the same time, the FDCPA provides an exception for debt collectors who communicate with third parties "for the purpose of acquiring location information about the consumer" (15 U.S.C. § 1692b). Still, a debt collector "must follow prescribed protocol" pertaining to acquiring that location information, the appellate panel observed.

The consumer brought a lawsuit against HOVG LLC d/b/a Bay Area Credit Service, LLC, alleging that the debt collector violated the FDCPA’s prohibition against communicating with third parties about a consumer’s debt.

More specifically, the consumer alleged that HOVG violated § 1692c(b) "when it left a message with his sister and asked her to have Fontana return HOVG’s call." According to the consumer, the debt collector "called Fontana’s sister intending to contact Fontana, not merely to confirm his phone number." Rather than just looking to update Fontana’s contact information, the debt collector "asked to speak with him" and "left a message with instructions for Fontana to return its call." The consumer asserted this conduct "went beyond the scope of a permissible call for the purposes of obtaining location information" from his sister.

After the federal district court for the Western District of Louisiana dismissed the consumer’s FDCPA claim and entered judgment for the debt collector, the consumer appealed that decision to the Fifth Circuit.

Appellate review. Before addressing whether the conversation between the debt collector and the consumer’s sister was a permissible call to obtain location information, the appellate panel noted that it was first called to address the "threshold issue" of "whether the alleged conversation qualifies as a "communication" as defined by the FDCPA. For purposes of the FDCPA, a "communication" refers to "the conveying of information regarding a debt directly or indirectly to any person through any medium" (15 U.S.C. § 1692a(2)). Notably, the Fifth Circuit panel communicated that, while peripherally touching upon it in other cases, "we have not previously addressed the scope of this definition." According to the panel, the statutory text "makes it clear that, to be considered a communication, any message or conversation must convey "information regarding a debt. 15 U.S.C. § 1692a(2)."

Ultimately, the panel decided that, "[e]ven taking the pleaded facts in this case in the light most favorable to Fontana, the conversation between HOVG’s representative and Fontana’s sister did not convey any information regarding a debt, either directly or indirectly." In reaching its decision, the panel determined that: (i) the representative’s statement of an "an important personal business matter" did not "suggest the existence of a debt, much less provide information;" (ii) the closest the collection service’s representative came to "giving information about a debt was providing the name of the debt collector;" (iii) even if "the average consumer recognized the company’s name and identified it as a debt collector, receiving a phone call from a debt collector does not suggest any information about an underlying debt;" (iv) HOVG’s representative "gave only the agency’s name and no other information regarding its business or the true reason for its call;" and (v) there was support for the panel’s interpretation "in the opinions of our sister circuits."

As a result of its threshold ruling, the panel maintained that it was not necessary to inquire further about whether the telephone conversation was made "in connection with the collection of any debt" under FDCPA section 1692c(b). The consumer failed to adequately plead facts suggesting a plausible violation of the FDCPA, the panel concluded.

The case is No. 20-30471.

Attorneys: David Patrick Keating (Keating Firm, APLC) for Zachary Fontana. Ryan D. Dry (Krebs Farley & Dry, PLLC) for HOVG LLC d/b/a Bay Area Credit Service, LLC.

Companies: HOVG LLC d/b/a Bay Area Credit Service, LLC

MainStory: TopStory DebtCollection LouisianaNews MississippiNews TexasNews

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More

Banking and Finance Law Daily: Breaking legal news at your fingertips

Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on banking and finance legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.