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,

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.