Udis v. Universal Communications Co., 01CA0758.

• Decision Date: 11 April 2002
• Docket Number: No. 01CA0758.,01CA0758.
• Citation: 56 P.3d 1177
• Parties: Laura E. UDIS, Executive Director, Colorado Collection Agency Board, Plaintiff-Appellant, v. UNIVERSAL COMMUNICATIONS COMPANY, Defendant-Appellee.
• Court: Colorado Court of Appeals

56 P.3d 1177

Laura E. UDIS, Executive Director, Colorado Collection Agency Board, Plaintiff-Appellant, v. UNIVERSAL COMMUNICATIONS COMPANY, Defendant-Appellee.

No. 01CA0758.

Colorado Court of Appeals, Div. V.

April 11, 2002.

Certiorari Denied November 4, 2002.

Ken Salazar, Attorney General, Paul Chessin, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellant.

Hale, Hackstaff, Tymkovich & ErkenBrack, L.L.P., Richard W. Daily, Timothy M. Tymkovich, Denver, Colorado, for Defendant-Appellee.

Opinion by Judge DAVIDSON.

In this action for injunctive relief for violations of the Colorado Fair Debt Collection Practices Act (Act), § 12-14-101, et seq., C.R.S.2001, plaintiff, Laura E. Udis as administrator of the Colorado Collection Agency Board, appeals from the judgment determining that defendant, Universal Communications Company, is not a "collection agency" for purposes of the Act. We reverse and remand.

The following facts are undisputed. Defendant's business offers a "Telegram Notification" service, by which it delivers messages to individuals targeted by its subscribers. Defendant mails the individual a notice, which is "uniquely designed" to obtain a high response rate, informing the individual that there is a voice telegram waiting for him or her. To retrieve the recorded message, the individual is directed to call a toll-free number and to enter an identification code, which is supplied by the subscriber and printed on the notice. Each of defendant's subscribers is assigned a different toll-free number, and when the individual calls the number and enters the identification code, he or she receives a recorded message, usually directing the individual to contact the subscriber directly. While defendant may provide sample messages to its subscribers, the written messages in the notification and the recorded messages are authored or approved by the subscribers.

In addition to delivering the notice and recorded message, defendant's business offers a "Tel-Scan" service by which it "captures" the individual's telephone number when the individual makes the toll-free call. The individual is not informed that the telephone number is being recorded, and the individual cannot block transmission of the telephone number. Defendant then provides the individual's telephone number, matched to the individual's identification code, to its subscriber. The combined service is marketed as a tool for debt collectors, law enforcement personnel, and others to contact hard-to-reach people, for example, those with unlisted, private, or nonpublished telephone numbers.

Plaintiff's complaint alleged that defendant's services violated the Act, and she sought injunctive relief. The parties filed a statement of stipulated facts, and plaintiff then filed a motion for judgment on the pleadings or, alternatively, summary judgment. Relying on Romine v. Diversified Collection Services, Inc., 155 F.3d 1142 (9th Cir.1998), which held that similar services constituted "debt collection" under the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. (2001), plaintiff argued that she was entitled to judgment because the Act's definition of a "collection agency" is identical to the definition of a "debt collector" under the FDCPA. The court, citing the dissent in Romine, determined that defendant was not a "collection agency" and denied plaintiff's motion. It then entered judgment in favor of defendant, dismissing the case with prejudice. Plaintiff appeals.

I.

In Romine, supra, 155 F.3d at 1143, the Ninth Circuit determined that a service by which the defendant "obtains debtors' telephone numbers by eliciting responses to personal delivery telegrams, then disseminates the unlisted numbers to creditors and collection agencies" constituted the indirect attempt to collect a debt under the FDCPA. In its analysis, the Romine court noted that similar conduct, indistinguishable from defendant's here, was characterized as the indirect attempt to collect a debt by the Federal Trade Commission (FTC), the administrative agency charged with enforcement of the FDCPA.

Plaintiff contends that defendant's service is no different from that in Romine and that in light of the purposes of the Act and plaintiff's interpretation of it, the trial court erred when it determined that defendant is not a "collection agency" under the Act. Defendant argues that Romine is distinguishable and that Colorado should follow the view expressed in the dissent that similar conduct is merely a messenger service rather than the "indirect" collection of a debt. See Romine, supra, 155 F.3d at 1150 (Fernandez, J., dissenting)

(at most defendant used "a devious means to collect the debtor's telephone number, but telephone number collection is not debt collection" under the FDCPA). We agree with plaintiff.

A.

The issue here is a question of law and review is de novo. See Vail/Arrowhead, Inc. v. Dist. Court, 954 P.2d 608 (Colo.1998)

.

When analyzing a state statute, interpretation of an analogous federal statute is persuasive. See Furlong v. Gardner, 956 P.2d 545 (Colo.1998)

. The interpretation of the statute given by administrative officials charged with its enforcement is entitled to deference. Section 2-4-203(1)(f), C.R.S.2001; Bluewater Ins., Ltd. v. Balzano, 823 P.2d 1365 (Colo.1992).

Under the Act, a "collection agency" is required to obtain a license and is subject to regulation. The Act's definition of a "collection agency" includes "any ... [p]erson who engages in a business the principal purpose of which is the collection of debts; or ... [r]egularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." Section 12-14-103(2)(a), C.R.S.2001.

The Act is patterned on the FDCPA. See Commercial Serv. of Perry, Inc. v. Fitzgerald, 856 P.2d 58 (Colo.App.1993)

. The FDCPA contains language nearly identical to that in the Colorado statute, but uses the term "debt collector" rather than "collection agency." It defines a "debt collector" as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6) (2001). To the extent that a state statute provides less protection than the FDCPA, the federal statute preempts it. 15 U.S.C. § 1692n (2001).

Like its federal counterpart, the Act is a remedial consumer protection scheme that is designed to protect consumers from various abusive practices engaged in by "those in the business of collecting stale debts who are likely to have no further contact with the consumer and often are unconcerned with the consumer's rights or needs." Commercial Serv. of Perry, Inc. v. Fitzgerald, supra.

Statutes that are remedial in purpose should be construed liberally. See Shapiro & Meinhold v. Zartman, 823 P.2d 120 (Colo.1992).

The definition of a "collection agency" contained in § 12-14-103(2)(a)(II)(A), C.R.S.2001, includes one who "[r]egularly collects or attempts to collect, directly or indirectly, debts owed or due ... another." It is not necessary that one "gain possession of a debt, or personally benefit financially from the satisfaction of a debt" to be considered a "collection agency" under the Act. See Romine, supra, 155 F.3d at 1146

. When determining whether a defendant is a "collection agency," the defendant's activity, rather than its formal status as a collection agency, is dispositive. See Trull v. Lason Sys., Inc., 982 F.Supp. 600 (N.D.Ill.1997).

Under the Act, the collection of personal information for use in the attempt to collect a debt is considered a part of the debt collection process. See § 12-14-107(1)(k), C.R.S. 2001 (prohibiting "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer"). When communicating with a consumer in writing, even for the limited purpose of collecting a telephone number, a "collection agency" must disclose that it is attempting to collect a debt. See § 12-14-107(1)(l), C.R.S.2001 (prohibiting the "failure to disclose clearly, in the initial written communication made to collect a debt or obtain information about a consumer, that the debt collector or collection agency is attempting to collect a debt and that any information obtained will be used for that purpose"). Any communication with a consumer made by telephone in connection with the collection of a debt requires "meaningful disclosure of the caller's identity within the first sixty seconds after the other party to the call is identified as the debtor." Section 12-14-106(1)(f), C.R.S.2001.

B.

Defendant argues that, by delivering messages from its subscribers to targeted individuals and gathering electronic information related to the telephones used by the targets to respond to the messages, it is only a "messenger service" for its collection agency subscribers. We do not agree.

As did the majority in Romine, we conclude that defendant's actions—marketing to collection agencies a service by which it gathers from consumers and identifies otherwise unknown telephone numbers to be used by the collection agency for purposes of debt collection—bring it sufficiently close to the transaction to be "indirectly" attempting to collect a debt. Cf. People v. Blair, 195 Colo. 462, 579 P.2d 1133 (1978)

(defining "indirectly" for purposes of securities law).

Here, it is undisputed that defendant mails notices that are designed to look like telegrams to hard-to-reach debtors, urging them to call a toll-free number. It is further undisputed that when the debtors do so, their previously unavailable telephone numbers are captured, matched to the specific debtor, and provided to defendant's subscribers. This service constitutes seventy...