An Automated Dialer and Recorded Message Player (“ADRMP”) is a machine which automatically dials a phone number and then plays a pre-recorded message to the individual who answers the phone.[2]  ADRMPs are used by telephone solicitation industries because they lead to a marked increase in efficiency by enabling a computer to dial consecutive phone numbers and subsequently leave messages without human involvement.[3]  For example, some ADRMPs allow a company to dial over 1,000 phone numbers per day.[4]  Although ADRMP technology has been in use since at least the early 1990s, the legality of its use by debt collectors has recently been called into question and, to date, this issue has been addressed by neither the United States Supreme Court nor a federal appellate court.  Specifically, consumers have challenged the use of ADRMPs under the Fair Debt Collection Practices Act (“FDCPA”)[5] and the Telephone Consumer Protection Act (“TCPA”).[6] 

I.          ADRMP Technology & the FDCPA

            One of the first cases to challenge the use of ADRMP technology under the FDCPA was Joseph v. J.J. Mac Intyre Cos., L.L.C. [7]  There, the plaintiff alleged that the defendant debt collector called her approximately seventy-five times and that dozens of these calls were made using an auto-dialer.[8]  The plaintiff argued that the debt collector’s calls violated § 1692d(6) of the FDCPA, which prohibits the placement of telephone calls without meaningful disclosure of the caller’s identity.[9]  In turn, the defendant asserted that this provision of the FDCPA is inapplicable to automated phone calls and that the disclosure requirement only applies to phone calls made by a live person.[10]  The court rejected the defendant’s argument and held that automated telephone calls fall under the purview of § 1692d(6) of the FDCPA because “the language . . . applies to telephone calls; no distinction is made between live phone calls and automated phone calls.”[11] 

            Another United States District Court case, Hosseinzadeh v. M.R.S. Assoc., Inc. [12], expanded Joseph by holding that automated messages constitute “communications” for purposes of the FDCPA.  There, the plaintiff received six automated messages on her answering machine by the defendant debt collector.[13]  Like Joseph, Hosseinzadeh involved § 1692d(6) of the FDCPA, and the court found that the automated messages violated the statute.[14]  The plaintiff in Hosseinzadeh also alleged that the debt collector violated § 1692e(10) of the FDCPA, which prohibits a debt collector from using “any false representation or deceptive means” to collect a debt[15] by using an alias in its pre-recorded messages.[16]  In other words, the debt collector identified in the defendant’s pre-recorded messages was not an actual person who worked for the debt collection agency.  The court, however, did not decide this issue, stating that it was a question of fact for the factfinder.[17]  Furthermore, the plaintiff in Hosseinzadeh asserted that the defendant violated § 1692e(11) of the FDCPA, which requires a debt collector to disclose that the collector is attempting to collect a debt and that any information gathered will be used for that purpose.[18]  While the defendant argued that the automated messages did not constitute “communications” under the FDCPA, the court disagreed and held that the automated messages left on the plaintiff’s answering machine were “communications” under the FDCPA.[19]  Thus, the Hosseinzadeh court went a step further than the Joseph court by expressly holding that an automated message is a “communication” for purposes of the FDCPA.

            Yet another important case involving the use of ADRMP technology by debt collectors was Foti v. NCO Financial Sys., Inc. [20]  There, the plaintiff argued that the defendant debt collector’s uniform, pre-recorded, standardized message violated the FDCPA.[21]  The message stated, “Good day, we are calling from NCO Financial Systems regarding a personal business matter that requires your immediate attention.  Please call back 1-866-701-1275 once again please call back, toll-free, 1-866-701-1275, this is not a solicitation.”[22]  Additionally, the plaintiff alleged that the call was made using an auto-dialer.[23]  Here, like in Hosseinzadeh, the debt collector argued that the pre-recorded message was not a “communication” because it did not “convey any information regarding a debt, but instead simply request[ed] a return call regarding an important business matter.”[24]  However, the Foti court also held that a pre-recorded message is a “communication” within the meaning of the FDCPA.[25]  The court stated, “Given that the obvious purpose of the message was to provide the debtor with enough information to entice a return call, it is difficult to imagine how the voicemail message is not a communication under the FDCPA.”[26]  Importantly, the court also stated that just because a debt collector is entitled to attempt to collect a debt, it is not entitled “to use any means, even if those means are the most economical or efficient.”[27]  Thus, although ADRMP technology may be extremely efficient and cost-effective for debt collection companies does not give debt collectors a “free pass” under the FDCPA.

            The Leyse v. Corp. Collection Servs., Inc.[28] court made expressly clear the fact that ADRMP technology does not give debt collectors a “free pass” under the FDCPA.  In that case, the defendant debt collector placed approximately 22,000 phone calls to consumers in New York State, all of which played pre-recorded messages to the recipient.[29]  The calls were made in conjunction with a predictive dialer.[30]  As in Hosseinzadeh and Foti, the court struck down the defendant’s argument that the messages were not “communications” within the meaning of the FDCPA.[31]  However, the defendant in Leyse also argued that its use of pre-recorded messages forced it to “choose between violating § 1692d(6) [of the FDCPA]’s meaningful disclosure requirement by leaving pre-recorded messages that do not clearly identify themselves, and violating § 1692c(b)’s privacy requirement by identifying themselves to third parties.”[32]  The court also rejected this argument, stating that the defendant was not expressly entitled to use pre-recorded messages for debt collection and that it was the defendant’s own fault that it was “cornered between a rock and a hard place” since it chose to use pre-recorded messages in order to collect debts.[33] 

II.        ADRMP Technology & the TCPA

            The use of ADRMP technology by debt collectors has also been challenged under the TCPA.  For example, in Watson v. NCO Group, Inc. [34], the plaintiff challenged a debt collector’s use of ADRMP technology under the TCPA.  The plaintiff received over 200 prerecorded or mechanical phone calls in a five-month period from the defendant debt collector, to which he owed no debt.[35]  Although the court noted that Federal Communications Commission (“FCC”) has not specifically addressed the issue of erroneous debt collection calls, it noted that the FCC has created an exception to the TCPA for parties with whom the caller has an established business relationship.  This exception includes debt collection calls, since debt collection involves a prior or existing business relationship.[36]  However, since an erroneous debt collection call is necessarily made to a non-debtor who does not have an existing business relationship with the debt collector, “it follow[ed] that the purview of the FCC’s exemption does not extent to the type of calls made” to the plaintiff.[37]  This case is illustrative of the fact that calls made using ADRMP technology are also subject to regulation under the TCPA when the recipient of such calls is a non-debtor.

III.             Conclusion

            The several federal district courts that have addressed the issue of the use of ADRMP technology by debt collectors have thus all agreed that the pre-recorded messages left using such technology may violate the FDCPA if not worded properly.  It remains to be seen, however, whether debt collectors will find their way out from in between the “rock and hard place” of meaningful disclosure versus violation of privacy. 

            It also remains to be seen whether the most recent issue concerning the use of ADRMP technology – the use of auto-dialers by debt collectors to place calls to a consumer’s cellular phone in an attempt to collect a debt – will favor the consumer or the debt collector.  Although, as demonstrated in Watson, a debt collector may use ADRMP technology to call a debtor’s home phone as long as the debt is legitimate, it is currently a violation of the TCPA for a debt collector to place an ADRMP call to a cellular phone, even if the debtor and debt collector have an existing relationship.[38]  Several groups are actively pursuing clarification from the FCC regarding this issue.[39]

For additional information, please see the following:

·        Consumers Law:  http://www.consumerslaw.com

·        Consumer Law & Policy Blog:  http://www.pubcit.typepad.com/clpblog

·        ACA International (Association of Credit and Collection Professionals):  http://www.acainternational.org

·        National Association of Retail Collection Attorneys:  http://www.narca.org

·        Debt Collectors Seek to Auto-Dial Cell Phones:  http://blog.washingtonpost.com/thecheckout/ 2006/04/debt_collectors_seek_to_autodi.html

·        Auto-Dialer Telephone Dialer Plans:  http://www.opc-marketing.com/connecticut_collection_agency.html