Initial Communication Under the FDCPA

Your initial communication with a consumer should not be a voicemail. You may be caught between a rock and a hard place if you do.

Hart v. Credit Control (11th circuit- September 2017) ruled that a Zortman-type voicemail falls within the FDCPA’s definition of a “communication.” That, in turn, triggers the mini-miranda requirement. A voicemail that includes the shortened mini-miranda allowed for subsequent communications is not Zortman compliant.

Under this line of reasoning, a debt collector’s initial communication with a consumer should not be a voicemail (Zortman compliant or otherwise). It creates an unsolvable dilemma between 1692d(6) (third party disclosure) and 1692e(11) (initial communication must have the full mini-miranda). In this ‘initial communication is a voicemail’ scenario, if you comply with 1692d(6), then you arguably violate 1692e(11) and vice versa.

Hart was out of the 11th circuit and every circuit is different, but our overall advice is to make sure the 1692g notice is mailed (and received in a perfect world) before starting calls or, at the very least, before leaving voicemail messages.


Indemnification sounds complicated, but has a simple definition—to hold harmless. Issues surrounding indemnification arise frequently in the collection industry due to the relationships among companies that service consumer accounts, their creditor clients, forwarding law firms that eventually file suit to recover the obligation, and industry vendors. Creditors, debt buyers, collection agencies, law firms, and vendors are all valuable components of the collection process. All generally work together toward a common goal, but consumer complaints occasionally create a conflict of interest among companies. Most typically, indemnification arises through the contract for services entered between parties wherein a party accepts the contractual obligation to indemnify the other party under certain circumstances. The indemnification provision is important and should be reviewed carefully before entering into any agreement.

When your company and a company with which you have a business relationship are individually or collectively the target of a consumer demand or complaint, your company should immediately take the following steps:

1. Consult the service agreement between your company and any other entity that may have caused or contributed to the underlying issue which generated the threat or lawsuit;

2. Consider if allegations in the threat or lawsuit read in concert with each party’s contractual obligations warrants discussing whether someone may be contractually responsible for the defense of the threat or lawsuit; and

3. Notify your general counsel, compliance department, or attorney of any questions and/or decisions regarding indemnification.

Companies can save money, time, and business relationships by; (1) carefully reviewing indemnification provisions at the outset of the business relationship, and (2) immediately considering the benefits and risks triggering the indemnification provision upon receipt of a consumer demand or lawsuit. Early indemnification decisions can mitigate damages, assist with strategy, and provide business partners clarification of their respective responsibilities. Contact our firm for advice about how to manage the up front contract negotiations and/or the back end implications when indemnification becomes and issue in a threat or lawsuit.

Good Folks of York County 2017 Luncheon

The Echols Firm, LLC is a proud sponser of Good Folks of York County and the recipients they support.

Since 1991, The Good Folks of York County consists of York County citizens and businesses which join together annually to raise funds with the ambition of making a significant difference for local nonprofit organization serving residents in need in our community. The Echols Firm, LLC (pictured above) was in attendance for the 2017 Good Folks of York County Luncheon which helped raise funds for commendable charities that benefit our community.

The recipients of the 2017 donations include The Salvation Army, Safe Passage, and Palmetto Women’s Center. Contributions donated from the luncheon will help support these charitable organizations and provide much needed improvements for the lives of the people in the charities’ care. The Echols Firm, LLC will continue to support causes which strengthen our local community and offer help to those in need.

Chad at Western Student Financial Services Conference in Portland, Oregon

Chad was invited to speak at the Western Student Financial Services Conference at Portland State University on July 28th, 2014.  The subject of his first session was bankruptcy and the analysis on whether or not certain debts on campus qualify as “student loans” pursuant to the United States Bankruptcy Code, and steps schools can take to better protect their debts from discharge.  His other session focused on legal hot topics, including a discussion focusing on the current legal issues facing the collection industry and the impact those issues have on the higher education community.

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