District Court (Minn.) Finds Skip-Tracer’s “Message Alert” to Debtors to Obtain Telephone Information Rendered it a Debt Collector and Violated the FDCPA

In Thompson v. National Credit Adjusters, LLC, 2012 WL 5372577 (D.Minn. 2012), Judge Nelson found a skip tracer’s letter to consumers to obtain telephone information for the skip tracer’s debt collector clients rendered the skip tracer subject to the FDCPA, too.  The facts were as follows. Plaintiff Lamont A. Thompson incurred a consumer debt with Fast Cash Personal Loan. Plaintiff defaulted on that debt sometime before September 2009 and Defendant National Credit Adjusters, LLC purchased Plaintiff’s debt from Fast Cash Personal Loan. Around September 2009, Plaintiff received a letter titled “Message Alert” It was addressed to Plaintiff and advised him that “an automated voice message has been left for you and needs to be retrieved by phone.” It also provided a toll free phone number for Plaintiff to “access the message and confirm receipt” using a “message ID” number identified in the Letter. The Letter displayed a return address of “PO Box 3023, Hutchinson, KS 67504.” That address belongs to NCA. The Letter did not identify NCA by name or explain that it was a communication by a debt collector.   Synergy Solutions, Inc. provided “skip-tracing” services for NCA from 2001 to July 2010 to obtain valid phone numbers for debtors so NCA could contact them.  Synergy obtained consumers’ phone numbers for NCA by sending consumers “mailers” identical to the Letter that was sent to Plaintiff in this case. Synergy has no record of NCA approving the Letter. NCA claims that it was unaware of how Synergy obtained consumers’ phone numbers. It is not disputed, however, that NCA used Synergy’s services to send the Letter to Plaintiff. The Court held that Synergy’s role in the collection process rendered it a debt collector under the FDCPA.

While Synergy is not a debt collector under the first prong of the FDCPA definition, it is a closer question whether it regularly attempts to collect debts, either directly or indirectly and therefore qualifies as a debt collector under the second prong. In Romine, debt collector DCS gave Western Union the names and addresses of debtors for whom it did not have phone numbers. 155 F.3d at 1143. Western Union then sent each debtor a telegram asking him to call a number and enter his own phone number for identity confirmation. Id. Western Union then gave the confirmed phone numbers to DCS. Id. at 1144. The court found that Western Union qualified as a “debt collector” under the FDCPA. Id. at 1149. Since Western Union obtained telephone numbers through deceptive means, and used a system to “catalyze debt collection,” the court determined that the entity’s activities went “beyond mere information gathering or message delivery” and were “of the type that the FDCPA was designed to deter.” Id. at 1147, 1149. While Western Union argued that the court’s ruling would “bring a host of service providers within the statute’s reach, including mailing services, private investigators, skip tracers, [and] online personal locator services,” the court expressly reiterated its conclusion that such a determination “would depend upon the nature of the activities in the individual case.” Id. at 1149. ¶  The Court determines that Synergy is a “debt collector” as defined under the FDCPA. NCA con-tracted with Synergy to obtain debtors’ telephone numbers. NCA gave Synergy names and addresses of debtors for whom it did not have phone numbers. Synergy sent each debtor a Letter asking him to call a phone number and enter his own identity confirmation. Synergy turned these confirmed phone numbers of debtors back over to NCA. Synergy drafted the Letter on behalf of NCA, mailed the Letter directly to consumers, and provided the confirmed number to NCA. The Court determines that, as in Romine, Synergy went well beyond performing administrative tasks for NCA and is a debt collector for purposes of the FDCPA.

The Court also found Synergy’s skip tracing letter deceptive under the FDCPA.

Both Synergy and NCA testified that the purpose of the Letter was to obtain consumers’ telephone numbers to allow NCA to call them about their debts. (Gylling Depo. 6:25–7:7; Welker Depo. 9:16–24, 13:11–14:1.) The Letter was only sent to consumers for whom NCA had no valid phone number. (Gylling Depo. 8:24–9:8.) Accordingly, because the Letter was sent in an attempt to gain consumers’ telephone numbers, it was a “means” to “obtain information concerning a consumer” under 15 U.S.C. § 1692e(10). ¶ The only remaining issue is whether the “means” Synergy used to “obtain information concerning a consumer” was “deceptive.” Whether a communication is deceptive under the FDCPA is judged from the perspective of an “unsophisticated consumer.” … ¶ . . .The Court determines that the Letter sent by Synergy was deceptive as a matter of law. The Letter did not name the sender or disclose that it was from a debt collector. Rather, the Letter only stated that the consumer had a voice message that “needs to be retrieved by phone.” After calling the number to retrieve the voice message, the consumer did not immediately learn whom he was calling or the purpose of the communication. Rather, the consumer was asked to enter a “message ID” from the Letter. The voice then stated that it was a message from NCA regarding the collection of a debt. By that time, however, the phone system had recorded the debtor’s telephone number and matched it to the consumer’s account using the message ID number. The Court determines that an unsophisticated consumer would not know, upon receiving the Letter, that the purpose of the communication was an attempt to collect a debt. Therefore, the Court determines that the Letter violated § 1692e(10).