Calls from debt collectors are stressful. One Maryland man – contacted about a debt that belonged to his sister-in-law – decided to take matters into his own hands and sue the debt collector that called him about the matter. Michael C. Worsham took Accounts Receivable Management, Inc. (ARM) to court alleging violations of several state and federal debt collection laws. ARM is a debt collection company.
ARM was trying to locate a debtor, Martha Bucheli, who is Worsham’s sister-in-law. During ARM’s efforts to locate Bucheli, it discovered Worsham’s phone number as a possible contact for Bucheli. ARM called Worsham’s phone number about 10 times in May 2010. Worsham answered two of those phone calls. During the calls, he heard a prerecorded message telling him to press “1” if he were Martha and “2” if he was not Martha. On one of the calls, Worsham pressed “2” and upon hearing more prompts and options, he hung up. Worsham did not, however, speak to a live representative of ARM during either of the two calls that he answered.
Because of the calls, Worsham filed a lawsuit in state court against ARM, alleging violations of the Fair Debt Collection Practices Act (FDCPA), the federal Telephone Consumer Protection Act (TCPA) and the Maryland Telephone Consumer Protection Act (MTCPA) as well as a state law invasion of seclusion claim. ARM asked that the case be moved to federal court and then asked the court to throw out the lawsuit. The federal trial court agreed with ARM and granted ARM summary judgment. Worsham appealed the claims for violations of the FDCPA and the MTCPA to the United States Court of Appeals for the Fourth Circuit.
The federal appellate court agreed with the trial court. Although third parties may find debt collection calls bothersome or inconvenient, Congress has allowed debt collectors to call third parties on multiple occasions in certain instances, the court explained. For example, when communicating with a third party, a debt collector can not communicate with the third party more than one time, unless the debt collector reasonably believes that the earlier response of the person was incomplete and that the person has complete location information.
The use of the word “reasonably” indicates that this is an objective standard that the debt collector must meet to avoid liability under the FDCPA, the court observed. Relying on a legal treatise, the court explained that the “reasonable man” standard in tort law negligence is an “objective and external one, rather than that of the individual judgment, good or bad, of the particular individual.” In this instance, Worsham’s complaint alleged that he heard “more prompts and options” after he pressed “2” to indicate that he was not Bucheli. Based on this fact, a reasonable person would believe that Worsham’s response to the call was incomplete, the court observed. In addition, the court continued, a reasonable person could believe that Worsham would have knowledge of Bucheli’s location at the time of a later call based on his number appearing as a possible contact for Bucheli. Therefore, under federal law, ARM was allowed to continue calling Worsham until the debt collector reasonably believed that it had received a complete response, the court said.
The appeals court then turned to Worsham’s claim under the MTCPA. The federal appellate court noted that Worsham had unsuccessfully made the same claim in an earlier lawsuit in Maryland state court. In that instance, Maryland’s Court of Special Appeals had held there was no violation of the MTCPA.
Accordingly, the federal appellate court upheld the lower court’s decision to do what ARM asked and throw the case out of court.
Michael C. Worsham v. Accounts Receivable Management, Inc. was released November 14, 2012.
It is worth noting that creditor actions – phone calls, collections, etc. – are “stayed” or placed on hold in either a Chapter 7 or Chapter 13 bankruptcy.
Belsky, Weinberg & Horowitz has represented consumers in mortgage, bankruptcy and debt collection cases for many years. Call our bankruptcy attorneys at 410-234-0100 or email us for a free consultation and let us help you to resolve your credit and debt problems through prompt and professional action that will make what otherwise would appear to be an impossible situation a very manageable one for you and your family!