The Eastern District of Pennsylvania (E.D. Pa.) recently reviewed a case regarding local number outpulsing, where a company places calls from a phone number in the consumer’s area code even if the company is not located there. In Bermudez v. Diversified Consultants Inc., No. 18-cv-2004 (E.D. Pa. Feb. 1, 2019), the court found that the practice was not deceptive or misleading as alleged by the consumer.

Factual and Procedural Background

Defendant debt collector placed a call to plaintiff’s daughter using three phone numbers from the daughter’s area code in Pennsylvania. Defendant is located in Jacksonville, Florida, and does not have a place of business in Pennsylvania.

Plaintiff filed a Fair Debt Collection Practices Act (FDCPA) lawsuit against defendant, alleging that using a local area code was deceptive and misleading because the local phone number gives consumers a false impression that the call is locally originated in order to entice the consumer to answer. In response, defendant filed a motion to dismiss, which the court granted.

The Court’s Decision

Unlike the plaintiff, the court did not take issue with the practice of local number outpulsing. In determining whether the practice was deceptive or misleading, the court looked directly to section 1692e of the FDCPA. The court stated:

Section 1692e’s list of prohibited conduct generally characterizes three categories of harmful practice, to wit: misleading consumers about the debt collector’s identity, about the character of the debt itself, and about the consequences of a consumer’s decision about the debt.

Noting that the representation about the identity of the debt collector is about who the debt collector is – not merely where the debt collector is calling from – the court found that the practice was not prohibited conduct under 1692e.

Additionally, the court found that the practice is not material in how a debtor addresses debts, which what Congress sought to protect. Therefore, the court found that:

The use of a particular phone number, by a Defendant whose business location is covered by a different area code, is not materially misleading information or prohibited conduct under the FDCPA.


insideARM Perspective

Recently, insideARM wrote about the ARM industry’s dilemma when dealing with FDCPA litigation. One reason for this dilemma is the constant stream of lawsuits even when the courts have already resolved the issue at hand. Inconsistent court decisions light a fire under this problem. This inconsistency leads to the belief that even if a claim failed in one jurisdiction, it doesn’t mean that it will fail in another -- even though it relates to the same provision of the FDCPA. What is the result? Duplicative lawsuits in multiple jurisdictions addressing the same issue.

This is currently highlighted within the Third Circuit on the issue of whether validation notice language that tracks the FDCPA is or is not confusing to consumers regarding dispute procedures. In that situation, the reason for confusion is clear -- district courts within the same circuit are coming out with conflicting decisions.

The situation illustrated by the decision outlined in this article shows the other face of this problem: even when courts are ruling consistently, it does not stop duplicative lawsuits on the issue. A footnote in this case references that several other district courts found no FDCPA violation in a similar set of circumstances. Yet, because courts are ruling inconsistently, suits like this continue to get filed because there could be a chance of success in other jurisdictions and the volume and cost of litigation are so high that debt collectors are almost strong-armed into settlements.

The big picture here is this: all of this relates to the same statute. The FDCPA is a federal statute, which means its requirements should be uniform throughout the country. That is not what is happening in reality, and that is a problem.