The opinion of the court was delivered by: ARTHUR D. SPATT
This is an action by a consumer against a corporate debt collection agency, its employees, and their principal, Citibank, N.A. under the Federal Fair Debt Collection Practice Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p.
The plaintiff RAY TENG ("plaintiff" or "Teng") came to the United States in 1980 from Beijing, China. He is a lawful permanent resident of the United States. In the early 1980s the plaintiff opened three accounts, including a "checking plus" account at Citibank N.A. ("Citibank"). He also received a personal loan from Citibank. The plaintiff made payments to Citibank on his various obligations, including covered overdrafts, until 1989. In that year, the plaintiff lost his full-time job and fell behind in his payments to Citibank. At one time he was living with his mother.
Teng testified that he first received a communication from the defendant Metropolitan Retail Recovery Inc. ("Met Retail") "some time in the late fall of 1991" when he was in his mother's home in Flushing, New York. At that time he owed Citibank approximately $ 5000. Teng testified that a man identified himself as "Willie Davis of the City Marshal's office." This person told him that there was a judgment against him and that he was ready to "pop a lock" on his mother's apartment, remove all the household furniture, put it in storage for thirty days and "auction it off." Teng then testified that he was given the 212 telephone number of Met Retail. When Teng called the number he was told that there was a judgment against him and that he had better make the payments due.
Teng then made an arrangement to repay the debt. He paid $ 1500 on January 16, 1992 and $ 1100 on March 12, 1992, leaving a balance at that time of $ 3251.75 as indicated on a Met Retail payment card (Plaintiff's Exh. 3). Teng made two additional payments of $ 100.00 each on April 15, 1992 and May 23, 1992 and then he stopped making any payments. If the Met Retail payment card is accurate, there would have been a balance of $ 3051.75 due as of May 23, 1992, together with any interest due and owing, with no payments made by Teng after that date.
JIMMY CHENG is the owner of the New Hunan Taste Chinese Restaurant in Valley Stream, New York. On Thursday, September 10, 1992, the plaintiff Ray Teng was an employee at the restaurant but did not work that day. On that date, September 10, 1992, at approximately 5:30 p.m., Cheng received a phone call from someone who asked if Mr. Teng was there. Cheng responded that this was his day off. The caller asked for the plaintiff's home telephone number. The caller further said that he was calling from a telegram company in Maryland and "Mr. Teng had a family crisis overseas." Hearing this dire news, Cheng gave the caller the plaintiff's home telephone number. When Cheng asked the caller for the name of the telegram company, he said "That's not important." Cheng hung up, called Mr. Teng and left a message on his answering device that it "was very important, call me back."
Apparently an earlier call had been made by a representative of the defendant to the restaurant at 2:22 p.m. The times of this and other telephone calls are set forth in a record of telephone calls made from the defendant Met Retail's office that day (Plaintiff's Exh. 1). The call referred to above was actually the second call made to the New Hunan Taste Restaurant, which was recorded as being made at 5:34 p.m. and having a duration of four minutes.
On the same date at 5:46 pm., Cheng received a second phone call from the same person. The caller said that he would like to call Mr. Teng himself and that there is "really an emergency -- a family crisis."
On that same date, Thursday, September 10, 1992, Teng resided at 287 West Merrick Road in Valley Stream, New York. He testified that he lived at that address since May 1992 and had a listed telephone number. He did not work that day. He returned to his home at 6:00 p.m. and found a message on his answering machine from his employer Cheng saying that there was an "emergency and it was urgent to call him." He called Cheng who told him that "there was an emergency telegram; the telephone company from Maryland was looking for him; there was a family crisis in Beijing." Hearing this news, the plaintiff thought the call was related to his father-in-law who he knew was in a hospital in Beijing at that time, apparently suffering from a serious illness. He told this news about her father to his wife who began to cry. Teng did not know what to do. He and his wife waited for another phone call that never came. Finally at about 6:30 p.m., Teng called the hospital in Beijing where his father-in-law was a patient. He spoke to a nurse who did not know his father-in-law's condition. He made two calls to Beijing, at 6:37 p.m. and 6:46 p.m. (see Plaintiff's Exh. 5). Finally, his mother-in-law called him from China between 9:00 p.m. and 10:00 p.m. that evening. She told him that his father-in-law was fine and stable, even though he was still very sick and in the hospital.
Teng further testified that, that same evening, September 10, 1992, at about 7:00 p.m., he got a phone call from a man who identified himself as Willie Davis from the City Marshal's office. This man told him that there was a judgment against him and he was going to "pop a lock" on his apartment and take away his furniture. The man told him to call Met Retail at a 212 telephone number.
Teng then called Met Retail and spoke to a John Sierra who told him there was a judgment against him and that he would have to come up with payment in full or the next day the marshal would "pop a lock" and take his furniture. This call was listed in Plaintiff's Exh. 1 at page 5, as having been made at 6:55 p.m.
Teng then consulted attorney Shirley Gajewski. It was ascertained by her office that no judgment was ever rendered against him by Citibank. This was corroborated by the investigatory work of Joseph Chiofalo, a legal assistant for Ms. Gajewski. Chiofalo called Met Retail and spoke to a John Allen who told him the information with regard to the alleged "judgment" against Teng "was not available." Allen allegedly also referred to a City Marshal picking up Teng's furniture. Chiofalo then called Citibank, and was referred to its Pelham, New York office and to a "Mrs. Harry" who advised him that there was no judgment filed against him. Chiofalo testified that Citibank fully cooperated with him and assisted in his investigation.
CARLOS ZAPATA, the President and sole owner of the defendant Metropolitan Retail Recovery, Inc. testified that his company was a third debt collection agency. That meant that his agency was retained only after two prior debt collection agencies were unsuccessful in obtaining payment from the debtor. He and his debt collectors commonly use aliases when communicating with debtors. He himself spot checked his collectors' calls. Zapata also did some collection work himself and used the alias "John Sierra." His manager is Alexander Soto who used the alias "John Allen."
Zapata testified that he never heard anyone in his office use the alias of Willie Davis.
Citibank is the major client of Met Retail. There is a written agreement between Citibank and Met Retail, dated March 14, 1991 (Defendants' Exh. A). With regard to the relationship between Met Retail and Citibank, Zapata testified that "no one from Citibank gets involved in what Met Retail does" and that "we are completely independent of Citibank."
Zapata is familiar with the Teng account. Introduced in evidence is the original ledger card for the Teng account (Defendant's Exh. B). The date of referral, typed or computer generated on the ledger card, was December 23, 1991. The date of the first payment collected was January 16, 1992.
As further evidence of the date the defendant Met Retail first received the plaintiff's account, the defendant introduced its "collection history" sheets (Defendants' Exh. C). The first entry on these sheets is December 27, 1991. Also in evidence are the records from the prior collection agency which seems to indicate that the plaintiff's account was referred to defendant Met Retail by Citibank on December 23, 1991. Further, there is a Trans Union Consumer Credit Report in evidence (Defendants' Exh. E), dated January 2, 1992. All of this documentary evidence supports the defendant Met Retail's contention that it was retained for the first time by Citibank to collect the plaintiff's loan on or after December 23, 1991 and that the first collection work done by defendant Met Retail was on December 27, 1991.
Zapata conceded that the FDCPA restricts collection telephone calls to two a day. Yet the defendant's telephone invoice (Plaintiff's Exh. 1) shows that five calls were made from Met Retail on September 10, 1992. The Court does not credit Zapata's explanation that five calls had to be made because of "communication problems," especially with regard to a Chinese Restaurant which probably has a "take-out" business.
ALEXANDER SOTO has been employed by defendant Met Retail for four years. He is the defendant's manager and supervises all collectors. Soto uses the alias "John Allen." He is familiar with all the defendant's employees and testified that the name "WILLIE DAVIS" is unknown to him.
Soto works on some accounts himself and testified that on September 10, 1992 he called the plaintiff at his place of business at a Chinese Restaurant. He made two or three calls to the restaurant that day. Soto testified that he spoke to an unknown man at the restaurant each time who hung up. Soto also conceded that a total of five phone calls were made to the plaintiff's place of business and residence that day. Soto also stated that there was a requirement that written notice must be sent to a debtor within five days of a telephone call. He testified that he did send such notice but has no copies.
Soto testified that he spoke to hundreds and maybe thousands of debtors since September 10, 1992, and it was obvious to the Court that he remembered very little about this account.
The FDCPA was enacted "to protect consumers from unscrupulous debt collection practices . . . without imposing unnecessary restrictions on ethical debt collectors." S.Rep. No. 882, 95th Cong., 1st Sess. 1-2, reprinted in 1977 U.S.Code Cong. & Admin. News 1695, 1696.
The FDCPA establishes a general prohibition against the use of "false, deceptive, or misleading representation or means in connection with the collection of any debt," 15 U.S.C. § 1692e. Among the sixteen subsections of § 1692e, which is a non-exhaustive list of violative practices, are the following:
"(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
(11) Except as otherwise provided for communications to acquire location information under section 1692b of this title, the failure to disclose clearly in all communications made to collect a debt or to obtain information about a consumer, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose."
A single violation of section 1692e is sufficient to establish liability under the FDCPA. A false, deceptive or misleading representation in a telephone call by a debt collector is actionable. Austin v. Great Lakes Collection Bureau, Inc., 834 F. Supp. 557 (D.Conn. 1993). The test for determining whether a communication violates section 1692e is an objective standard based on the "least sophisticated consumer." Bentley v. Great Lakes Collection Bureau, 6 F.3d 60 (2d Cir. 1993; Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993). This standard both protects even the naive and trusting consumer and protects debt collectors from bizarre interpretation of collection communications. Clomon, supra, at 1320.
It has been held that the use of any false, deceptive or misleading representation in a collection telephone call violates section 1692e, regardless of whether the representation in question violates a particular subsection of the provision. Thus, there is a "general ban" of any false, deceptive or misleading representations. Clomon, supra, at 1320.
I. The Liability of Defendant Citibank
Liability under the FDCPA is on the "debt collector." A debt collector is defined in the statute in ...