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A Collector's Duty to Disclose

Under the Fair Debt Collection Practices Act ("FDCPA") a collector has a duty to provide a clear and meaningful disclosure of its identity and purpose of the communication, whether verbal or in written.  The collector must state its name and the company it works for, that the communication is an attempt to collect a debt and that any information obtained will be used for collection purposes (read my post on this subject from earlier this week titled "Debt Collectors Leaving Messages"). 

In Smith v. Greystone Alliance L.L.C., the District Court for the Northern District of Illinois ruled on the issue of a collector's duty to disclosure its identity when it held that Greystone Alliance LLC ("Greystone") violated the FDCPA after placing repeated telephone calls without disclosing the collector's identity on every single occasion.  9-cv-5585 (N.D.Ill) (April 13, 2012). 

In response to the lawsuit, Greystone argued that its conduct did not violate the FDCPA after it mailed an initial dunning letter to the consumer and identified its name and purpose.  Greystone stated that its letter complied with the FDCPA when it disclosed its identity in the initial communication with Smith and it had no duty to identify itself in subsequent communications. 

After mailing the initial debt collection letter, a collector on behalf of Greystone left a message on the consumer's home phone.  In the message, the collector provided his name and the name of his employer, gave a number at which the consumer could return his call and stated the call was "in regards to a file that has been placed in [his] office."  The caller failed however to mention he was a collector attempting to collect a debt, thus violating the FDCPA, a strategy obviously used to avoid disclosing the debt to a third party by leaving a vague message.  Subsequently, the collector left a message with the consumer's business partner who actually returned the call. The collector informed the partner that the call was "personal" and the partner explained that the consumer could not be reached at that number.  Instead of deleting the number from its records, the collector added the number to the list of ways to contact that consumer.

Over the next several weeks, Greystone continued to contact the consumer sometimes hanging up and sometimes leaving voicemail messages.  Greystone employees were required to use a script when calling to collect a debt and were directed to never mention the collector was calling to collect a debt or that the caller was in fact a debt collector, both of which are directly in violation of the FDCPA.  In conclusion, the court rejected Greystone's argument that the collector's initial disclosure letter was sufficient to satisfy the requirements of the FDCPA and explained that compliance with the duty to disclose must take place in every single conversation and in every single written communication.

If you are having problems with a debt collector or have any questions relating to debt collection contact SmithMarco P.C. for a free and confidential case review.

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