This article is part of a series for members taking a deeper dive into the Consumer Financial Protection Bureau’s final debt collection rule with a focus on requirements for leaving messages for consumers. Editor’s note: This article is available for members only.
12/17/2020 15:00
By Andrew Pavlik
In our last report examining the components of the Consumer Financial Protection Bureau’s final debt collection rule to implement the Fair Debt Collection Practices Act, we explored the nuances of the rule’s definition of “consumer.” Now we’ll dive into the rule’s answer to leaving messages: Limited Content Messages (LCMs).
A LCM is intended to be a short and straightforward voicemail message that a debt collector can leave for a consumer without fear of making an unintended third-party disclosure. As many members of the debt collection industry know, under existing common law (i.e., court decisions) there’s no perfect solution for leaving a voicemail message without risking potential third-party disclosure. Some courts have held that to leave a voicemail message for a consumer, a debt collector must satisfy the disclosure requirements of Sections 806(6) and 807(11) of the FDPCA, which require meaningful disclosure of the caller’s identity and the mini-Miranda disclosure.
These rulings have created a problem for debt collectors because courts have also held that messages disclosing the existence of a debt can result in a third-party disclosure under Section 805(b) of the FDCPA. For more on the state of decisional law regarding voicemail messages, see ACA’s SearchPoint #1146, Leaving Messages for Consumers, which includes relevant decisional law including the famous (or infamous, depending on your point of view) Foti and Zortman decisions, which includes relevant decisional law including the famous (or infamous, depending on your point of view) Foti and Zortman decisions.
To address this problem for debt collectors, the CFPB’s final rule states that if a voicemail message stays within the definitional bounds of a “limited content message” as set forth in Section 1006.2(j) and if the debt collector does not knowingly leave the voicemail message with or for a third party, then the voicemail message would not be considered a communication. That’s important, because if a LCM isn’t a “communication” for purposes of the FDCPA, then it cannot result in a prohibited third-party disclosure. That means if the voicemail were to result in an unintended third-party disclosure and the debt collector were to be sued for that third-party disclosure, the debt collector could theoretically demonstrate that it left a LCM, and—because the LCM does not constitute a communication under the FDCPA by virtue of the regulations—the complaint would be subject to dismissal for failure to state a claim, at least as to the alleged third-party disclosure.
What the Regulation Says
According to the plain language of Section 1006.2(j), a LCM includes only the following information:
It’s important to note that a LCM must include all the required content. It may include any of the optional content. It may not include any other content besides the above eight items.
Examples from the Regulation
The CFPB’s official interpretations set forth in the final rule at Supplement I (starting on page 347) provide two helpful examples of limited content messages. The first includes only the required content and the second includes the required content plus all the optional content.
LCM Example One – Required Content Only:
“This is Robin Smith calling from ABC Inc. Please contact me or Jim Johnson at 1-800-555-1212.”
LCM Example Two – Required Content Plus All Optional Content:
“Hi, this is Robin Smith calling from ABC Inc. It is 4:15 p.m. on Wednesday, September 1. Please contact me or any of our representatives at 1-800-555-1212 today until 6:00 p.m. Eastern time, or any weekday from 8:00 a.m. to 6:00 p.m. Eastern time.”
As noted above, the rule and its commentary make clear that if a debt collector adheres to the format above—i.e., if it includes all the required content and no additional content other than any or all of the optional content set forth in Section 1006.2(j)(2)—when leaving a voicemail message, the message will not be deemed a communication under the FDCPA. Remember, if the message does not qualify as a communication under the FDCPA, then it cannot result in a third-party disclosure if a third party were to hear or receive that voicemail.
Limitations of LCMs
So what’s the catch? Well for one, a LCM can only be made via voicemail, including direct drops (ringless voicemails). The final rule expressly defines a LCMs as “a voicemail for a consumer,” which excludes any potential use of a LCM via forms of communication, e.g., text message or email. (Note that the final rule does provide, in a separate section, a framework by which debt collectors can communicate with consumers via electronic media and minimize the risk of unintended third-party disclosures. See 12 C.F.R. Section 1006.6(d)(3)-(5).
Additionally, it’s crucial to understand that a LCM can be left only for a consumer. Debt collectors may not knowingly leave a limited-content message for a third party—if they do, then that voicemail message will not qualify as a limited content message and therefore would likely result in a prohibited third-party disclosure. For example, the official commentary to the rule states that if a debt collector calls a number that they know belongs to the consumer’s friend and leaves a voicemail message—even if the message otherwise stays entirely within the confines of a LCM as defined by the rule—then the message would not be considered a limited content message and could form the basis for a third-party disclosure claim. See Comment 2(j)-2.
It’s also important to understand that a LCM is not a communication, but it is an “attempt to communicate”—a new term the CFPB created in the final rule. The CFPB created the term “attempt to communicate” to help define the contours of other sections of the rule that restrict or prohibit communication efforts under certain circumstances.
For instance, Section 1006.6(b)(1) covers communications with consumers and requires that “a debt collector must not communicate or attempt to communicate with a consumer” (emphasis added) at any unusual or inconvenient time or place.
Similarly, Section 1006.14(a) prohibits debt collectors from communicating or attempting to communicate with any person in a manner “the natural consequence of which is to harass, oppress, or abuse” the person. And Section 1006.14(h) restricts communications and attempts to communicate via “a medium of communication if the person has requested that the debt collector not use that medium to communicate with that person.”
Because a LCM qualifies as an “attempt to communicate,” it will count for the purposes toward the provisions of analyzing potential violations of Section 1006.6(b) and 1006.14(a) and (h).
Similarly, although a LCM is not a communication for the purposes of third-party disclosure analysis, it will count as a “telephone call” for purposes of the new call-frequency limitations presumptions imposed by the final rule in Section 1006.14(b). The same will be true of LCMs left via direct drop voicemail. In fact, the comments relevant to Section 1006.14(b) state that for purposes of the call frequency limitations provisions, “‘placing a telephone call’ includes conveying a ringless voicemail.” See Comment 14(b)-1.
Note, however, the potential interaction between limited content messages and caller ID. In the section-by-section analysis included in the rule, the CFPB notes that where a caller ID display conveys content that is not permitted to be included in a limited content message—e.g., the debt collector’s name indicating that it is in the debt collection business—then the voicemail message associated with that caller ID entry would no longer meet the definition of limited content message.
In the bureau’s own words: “The bureau acknowledges that caller ID information may disclose more information than permitted by § 1006.2(j). In these circumstances, such voicemail messages would not meet the definition of limited content message.”
Accordingly, debt collectors who plan to leave limited content messages need to understand how their name will appear on consumers’ caller ID displays in order to properly assess the potential risks of third-party disclosure when leaving voicemails intended to be limited-content messages.”
Consider the Costs and Benefits
One question many debt collectors may have is this: Will the LCM benefit my bottom line? Once aspect of LCMs that will come into play here will be the fact a LCM must include a business name for the debt collector “that does not indicate that the debt collector is in the debt collection business.” See Section 1006.2(j)(1(i). If a collection agency’s name includes terminology that could indicate its status as a debt collector, then that name cannot be used in the LCM.
Agencies that find themselves in this unenviable position will likely want to consider adopting or using a trade name that does not indicate a relationship to the debt collection business. The legally conservative approach to this tactic would be to register an appropriate trade name in each jurisdiction in which the collection agency intends to leave LCMs.
Note that some licensing bodies may require a trade name (registered or unregistered) to be included on the agency’s collection license, which would require some additional time and expense to set up. ACA International will be publishing an article with consolidated guidance on FDCPA issues surrounding using an unregistered trade name in jurisdictions that do not require a d/b/a name to appear on the agency’s license. In the meantime, for help in those jurisdictions that require trade names to appear on an agency’s license, contact the licensing team at Collectors Insurance Agency via their website.
The question is whether the effort to set up a trade name to be used for LCMs will be counterbalanced against the efficacy that LCMs prove to have (or not) in real-world cases. Given that a LCM does not permit the debt collector to leave the consumer’s name (first or last) as part of the voicemail message, some members have expressed skepticism about this tool, while others remain optimistic that it will prove to be a safe, inexpensive way to engage with a consumer.
Conclusion
Despite the limitations discussed above, the limited content message remains a positive feature of the final rule because it provides a clear safe harbor for voicemail messages that should obviate the risks of third-party disclosure for consumers and debt collectors.
One final note: Many ACA members have expressed a desire to begin using LCMs immediately, but it may make sense to wait until Regulation F takes effect on Nov. 30, 2021. Until then, the final rule lacks the force of law, so even if a court might countenance the effort, leaving a LCM before the regulation takes effect would pose some risk considering existing common law. Members should consult with their own legal counsel about how best to proceed with implementation.
Finally, members wishing to learn more about the leaving voicemail messages should review recently revised ACA SearchPoint #1146, Leaving Messages for Consumers.
Andrew Pavlik is ACA International's compliance analyst.