The Massachusetts Supreme Court has ruled that a creditor is not exempt from rules limiting contact with consumers who owe them money. The court rejected the defendant’s argument that because they used an automatic dialer to contact the consumer – and because they never left a message -- the company never actually “initiated” communications.

The case is Armata v. Target Corporation (Target). A copy of the decision can be found here.


The consumer, Debra Armata, applied for a Target-branded debit card in May 2013. She incurred a debt, and became more than 30 days past due, at which point Target began contacting her to collect. The company called Armata using a predictive dialer, which – 95 percent of the time -- transfers cardholders who answer the phone to a live representative. The other five percent of calls receive a recorded message which requests that the consumer contact Target. The record does not mention how often Armata heard the recorded message; she never connected with a live person. Internal Target policy was to not leave voicemail messages, so no messages were left.

Massachusetts debt collection regulations limit how often a creditor may attempt to contact a debtor via telephone in order to collect a debt. The limit is two communications per seven day period. Guidance issued by the Attorney General in 2013 states (emphasis added),

“According to the Regulations, creditors may not initiate a communication with a debtor via telephone more than two times in a seven day period to a debtor’s home, cell, or personal telephone number. The goal of this provision is to not only limit the number of times a creditor can communicate with a debtor via telephone to try to collect a debt, but to also limit the fees that a creditor can impose on a debtor (thereby limiting voicemails and text messages to twice in a seven day period). Accordingly, unsuccessful attempts by a creditor to reach a debtor via telephone may not constitute initiation of communication if the creditor is truly unable to reach the debtor or to leave a message for the debtor. Notwithstanding this interpretation, the Office of the Attorney General may still consider enforcement action against any conduct, including initiation of communication via telephone, the natural consequence of which is to harass, oppress, or abuse a debtor.”

A Superior Court judge originally granted Target’s motion for summary judgment. Armata appealed, and requested that the case be heard by the state’s Supreme Court.

Target’s Argument

Target did not dispute the fact that it phoned the plaintiff more than twice in a seven-day period in order to collect a debt. The company asserted that it did not initiate communications as defined by the regulation because it used an automatic dialer, their system plays a prerecorded message only after a call is answered, most of its calls to Armata went unanswered, no voicemails were left, and therefore no information was conveyed. Target also argued that it was exempt from the regulation because it would be in violation of state and federal law if it left a voicemail message.

[Editor’s note: This September 2017 insideARM article, covering the case of Hart v. Credit Control, LLC, illustrates the years-long struggle over voicemail messages and third party disclosure under the FDCPA.]

The Court didn’t buy Target’s argument.

“Target's reading would create a loophole so large as to swallow the rule, such that nearly every creditor would be able to evade the limits imposed by the regulation simply by changing its dialing technology.”

The court said further, “We construe the Attorney General’s guidance to mean that attempts by a creditor to reach a debtor via telephone do constitute initiation of communication if the creditor is able to reach the debtor or leave a voicemail message for the debtor” (emphasis added).

Considering the definition of “truly unable to reach a debtor,” the court opined that this might mean, for instance, if the individual never answered a call and their voicemail was not set up, was full, or the phone had been disconnected. In Armata, however, it was clear that Target had the correct number and the consumer did answer the phone on occasion, so in this case Target was not “truly unable to reach” the consumer.

In the end, the court determined that the Massachusetts regulation does apply to creditors who use automatic dialers or voluntarily decide not to leave voicemail messages.

As to the argument that none of its calls actually conveyed information, the court also rejected this, saying that “the regulation does not limit ‘communication[s], but rather the initiation of communications…Under Target’s reading, a creditor would be permitted to telephone a debtor unremittingly so long as it chose not to leave voicemail messages. In such a scheme, a ‘communication’ would occur only if the debtor answered the call.”

Finally, the court dismissed Target’s “catch 22” argument that although it was able to leave a voicemail message, doing so would risk violating other Massachusetts debt collection regulations and the FDCPA. The court said, “This argument is unpersuasive, both because the Massachusetts regulations are not as restrictive as Target contends, and because Target does not fall within the purview of the FDCPA.” Further, “We do not interpret the regulatory scheme as prohibiting Target from leaving a voicemail message that simply states the caller's name, that the call was on behalf of Target, and that the recipient should return the call, so long as the message does not mention or in any way imply that the call concerns the collection of a debt.” And, in any event, “Target was calling Armata to collect a debt on its own behalf, which exempts it from the FDCPA.”

insideARM Perspective

This case is another excellent illustration of the need for a standard, safe harbor voicemail message that can be left by debt collectors without risk of violating the law.

The FDCPA contains conflicting requirements in that a debt collector must disclose his or her identity to a consumer in every communication and that a collector must refrain from communicating about a consumer’s debt to a third party. Congress did not anticipate the challenges created by the wording of the FDCPA in the context of today’s modern communications.

For example, current interpretations of the FDCPA provide that leaving a voicemail message, no matter how terse, is considered a “communication” under the FDCPA, thus triggering both the mini-Miranda debt collector disclosure requirement (which might be heard by, e.g., a roommate) and the third-party disclosure prohibition.

The combination of these outdated rules and the inability to use current communication channels threatens to leave this one industry in the last century, while the rest of the world moves ahead. Given that an estimated 77 million Americans have a debt in collections, this is an issue that will only cause more and more consumer frustration as today’s younger – digital only – consumers age.

We recommend regulators declare that a limited content message, delivered via any medium other than by letter (such as voicemail, email or text), is not a communication subject to the “debt collector” disclosure requirements. This message could be used, for instance, in cases where the right party contact information has not yet been confirmed.

A limited content message might sound something like this:

This is <name of person> seeking to communicate with <name of debtor> about an important matter. Please contact me at <123-456-7890> and reference account <account number>. Thank you.

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