The U.S. District Court for the District of Maryland recently held that unauthorized and auto-dialed debt collection calls to a VOIP telephone number violated the federal Telephone Consumer Protection Act, 47 U.S.C. §227, et seq. ("TCPA"), as well as corresponding Maryland state law, because the recipient was charged for each call by his VOIP telephone service provider.
In so ruling, the Court also held that the plaintiff, who was not the debtor, could not bring a claim under the federal Fair Debt Collection Practices Act, 15 U.S.C. §1692d(6), for placing telephone calls "without making meaningful disclosure of the caller's identity."
A copy of the opinion is attached.
The plaintiff was the recipient of a debt collector's calls on three separate accounts. The plaintiff was not liable on any of the three accounts -- two of the accounts were listed for the prior owner of the plaintiff's home, and one account was established by plaintiff's brother who lived at a separate residence.
Debt Collector began calling Plaintiff to collect on the accounts using an automatic telephone dialing system ("ATDS"). Within less than a year, Debt Collector called Plaintiff's residential line 37 times. Prior to the calls, Plaintiff had obtained Voice over Internet Protocol ("VOIP") service, which charged Plaintiff separately for incoming call and the transmission of the caller ID information. Three of the calls allegedly occurred after Plaintiff had called Debt Collector to inform it that calling his number cost him on a per-minute basis.
Each call used the following format:
This is a message for (Consumer's name), if this is not (Consumer's name), please hang up or disconnect. There will now be a 3-second pause in this message. (Pause for 3 seconds). By continuing to listen to this message, you acknowledge that you are (Consumer's name). This is (Dunning name) from [company name]. This communication is from a debt collector. This is an attempt to collect a debt, and any information obtained will be used for that purpose. Please contact me about this matter at -800-220-0605, Ext. ___.
Plaintiff sued debt collector for violations of the federal TCPA, the Maryland Telephone Consumer Protection Act ("MDTCPA"), and the FDCPA. The parties filed cross-motions for summary judgment.
As you may recall, under the "call charged" provision of the TCPA, 47 U.S.C. 227(b)(1)(A)(iii), absent the express consent of the called party, callers are prohibited from making any call using an ATDS to "any telephone number assigned to . . . any service for which the called party is charged for the call." 47 U.S.C. §227(b)(1)(A)(iii). The Court determined that because Plaintiff's VOIP service charged for each incoming call received as well as for the transmission of caller ID information on incoming calls, the debt collector violated the call charged provision of the TCPA.
Debt Collector argued that the VOIP service did not fundamentally change the nature of Plaintiff's residential telephone line, and that, under the "residential telephone line" provision, it was exempt from liability for certain pre-recorded information made for a commercial purposes. See 47 U.S.C. §227(b)(2)(B); 47 C.F.R. §64.1200(a)(2)(iii).
The Court rejected this argument. Assuming that the debt collector had met the requirements for the residential telephone line provision's exemption, the Court noted that the exemption applied to a separate prohibition upon certain pre-recorded calls under Section 227(b)(1)(B). However, Plaintiff was not asserting a claim under that section, but was instead asserting a claim under the "call charged" prohibitions of Section 227(b)(1)(A). Thus, the Court found that the exemption under the "residential line provision" did not apply to "call charged" violations.
Because the Court held that Debt Collector violated the federal TCPA, the Court also held that the debt collector's conduct violated corresponding state law, Md. Code, Comm. Law §14-3201, et seq. ("MDTCPA"), which created a state-law cause of action for violations of Section 227(b) of the TCPA. As to whether a plaintiff could recover statutory damages under federal law and state law for the same violation, the Court refused to certify such question to the Maryland high court, finding such question premature, given that the damages inquiry was to be determined separately.
In addition, the Court held that alleged violations of Section 227(d) of the TCPA's "technical standards" did not constitute a violation of the Maryland MDTCPA. Notably, under federal law, while § 227(b) authorized a private right of action, § 227(d) did not. Moreover, under 47 U.S.C. §227(f)(1), States are permitted to create "more restrictive standards than the federal TCPA, except with regard to subsection (d)." Thus, the Court granted summary judgment in favor of Debt Collector in connection with Plaintiff's state law claims premised upon violations of Section 227(d) of the federal Act.
The plaintiff also asserted a violation of § 1692b(3) of the FDCPA, which limits third party communications "for the purpose of acquiring location information about the consumer," by communicating with him more than once about another consumer's debt. The plaintiff was not liable on any of the three accounts being collected -- two of the accounts were listed for the prior owner of the plaintiff's home, and one account was established by plaintiff's brother who lived at a separate residence. On this FDCPA claim, the Court determined that a material dispute concerning the purpose of the call precluded summary judgment in favor of either party.
However, the Court did grant summary judgment in favor of Debt Collector as to Plaintiff's claim under 15 U.S.C. §1692d(6), which prohibits a debt collector from placing telephone calls "without making meaningful disclosure of the caller's identity."
The Court observed that "'meaningful disclosure' has been held to require the debt collector to disclose the caller's name, the debt collection company's name, and the nature of the debt collector's business." Op. at 27. In ruling in favor of Debt Collector, the Court determined that meaningful disclosure need only be made to the consumer.
The Court reasoned that, given that 15 U.S.C. §1692c(b) limits third-party communications in connection with the collection of a debt, "a debt collector confronted by a third-party gatekeeper . . . while attempting to contact the debtor, cannot both provide meaningful disclosure pursuant to § 1692d(6) and comply with the requirements of § 1692c(b) preventing the disclosure of a consumer's personal affairs to third parties." Op. at 28 (citations omitted). Such prohibitions could only be harmonized, the Court concluded, if the meaningful disclosure only applies to the consumer debtor.
Accordingly, the Court granted summary judgment for Plaintiff on the violations of the "called charged" provision under the TCPA and MDTCPA; granted summary judgment for Debt Collector on the violations of the "technical standards" of Section 227(d) of the TCPA and granted in part Debt Collector's motion for summary judgment on the FDCPA violations. Additionally, the Court denied Plaintiff's motion to certify questions to the Maryland high court.
Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
The Loop Center Building
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Chicago, Illinois 60602
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