Foti Revisited: When Does a Telephone Message Violate the FDCPA?

Ten years after the Southern District of New York entered its infamous decision in Foti v. NCO Financial Systems, Inc., 424 F. Supp. 2d 643 (S.D.N.Y. 2006), the debate of how to properly leave telephone messages continues to rage. 

In Foti, the debt collector left a message stating:

Good day, we are calling from NCO Financial Systems regarding a personal business matter that requires your immediate attention.  Please call back 1-866-701-1275 once again please call back, toll-free, 1-866-701-1275, this is not a solicitation.

Foti, 424 F. Supp. 2d 643, 648 (S.D.N.Y. 2006). The court held that the message was a communication subject to the FDCPA and additionally held that the message must comply with Section 1692e(11) of the FDCPA which requires that in all communications with the consumer, the debt collector identify itself as a debt collector.  Id. at 657.  The court went on to famously reject NCO’s argument that this interpretation placed debt collectors “in a virtual “Hobson’s choice” – debt collectors must disclose their identity as a debt collector to comply with §1692e(11)’s requirements, but are prohibited from leaving a message identifying themselves as such by §1692c(b)’s prohibition on communications to third parties.” Id. at 658. 

Since then, the debate has raged on: what constitutes a communication and is there a way to effectively leave a message for a debtor which complies with both §§1692e(11) and 1692c(b)? A new case out of the Eastern District of New York reminds us of the difficulties of complying with Foti and courts’ growing dissatisfaction with the FDCPA’s antiquated provisions. 

In Nicaisse v. Stephens and Michaels Assocs, Inc., 2015 U.S. Dist. LEXIS 172073 (E.D.N.Y. Dec. 28, 2015), the collection agency left a message that stated:

This is a private message for Inez Nicaisse.  Inez Nicaisse, do not listen to this message in the presence of others.  By continuing to listen to this message, you acknowledge this message is not being heard by others.  This is a communication from a debt collector attempting to collect a debt.  Any information obtained will be used for that purpose.  Please contact Stephens and Michaels regarding the personal matter at (866)679-9649.

Id. at *2.  Nicaisse filed suit, alleging that as the message was being left on her answering machine, her adult daughter overheard the message. Nicaisse asserted violations of Section 1692c(b) of the FDCPA. 

On summary judgment, the court drew a distinction between messages that contained confidential information and/or note that the call is an attempt to collect a debt, and debt collector phone messages that “convey[ed] no more information than a “hang-up call” would via caller id information.” Nicaisse, *14.  Because the message left indicated it was an attempt to collect a debt, the court was left with no choice but to consider it a communication under the FDCPA.  

The court’s frustration with the situation was thinly veiled:

As set forth below, the Court need not need reach the question of whether debt collector messages that do not reference an attempt to collect a debt violate the FDCPA because the subject message specifically indicated that Defendant was attempting to collect a debt.  However, the Court notes that while the FDCPA’s definition of “communication” has been broadly construed, it requires that a debt collector convey information regarding a debt. 

Id. at *16 (citations omitted). 

In reluctantly ruling in favor of the plaintiff, the court noted that the FDCPA is a strict liability statute and that instructions that a third party stop listening before the content of the message is revealed does not obviate liability. 

The court expressed its concerns for “the potential of placing undue restrictions on ethical debt collectors by holding that the FDCPA is violated when a third party inadvertently overhears a phone message that contains minimal information.” Id. at 18 (citations omitted).  However, because the message stated that “[t]his is a communication from a debt collector attempting to collect a debt,” the court was left with little choice.  “The Message constitutes a third-party communication in violation of Section 1692c(b) because it expressly indicates that Defendant, a debt collector, is seeking to collect a debt from Plaintiff.” Id. at *18-19.

While stuck with the conclusion that the defendant violated the FDCPA, the court did not award the maximum statutory penalty.  Instead, the court awarded the plaintiff $250.00 in statutory damages (no actual damages were sought) noting that “defendant’s actions are limited to one phone message that was inadvertently overheard by a third party and was neither abusive nor threatening.” Id. at *20-21.