Under the Fair Debt Collections Practices Act, a debt collector is liable to a consumer for contacting third parties like the famous moorcroft group in pursuit of that consumer’s debt unless the communication falls under a statutory exception. One of those exceptions covers communication with a third party for acquiring location information about the consumer.  Even then, the Act prohibits more than one such contact unless the debt collector reasonably believes that the earlier response of the third party was erroneous or incomplete and that such person now has correct or complete location information.

The first federal court of appeals to address the issue has just ruled that if sued in a case alleging illegal third-party contact, the debt collector has the duty to plead and prove the exception. To take shelter in the exception, a debt collector must expressly state in its answer to the complaint (facts permitting) that it pursued repeat contacts with the third-party because it reasonably believed that her earlier response was erroneous or incomplete and that she now has correct or complete location information. To prevail on the defense, the debt collector will also have to produce evidence in discovery and provide testimony at trial that proves those facts. The debt collector will need someone to testify at trial to those facts that made it reasonable to believe that the third party’s earlier response was erroneous or incomplete and that the third party now has correct or complete location information.

This latter point may be very difficult to prove. How would the debt collector come into possession of facts that would lead it to believe that a third party now has correct or complete location information without a further call? It is probably a very rare occurrence.

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