In Echlin v. PeaceHealth, 2018 WL 1801582, at *5–6 (C.A.9 (Wash.), 2018), the Court of Appeals for the Ninth Circuit held that a debt collector who engaged meaningfully in the debt collection process did not engage in “flat rating”.
Echlin primarily argues that CCI did not meaningfully participate in the attempts to collect her debts because CCI did not engage in many of the hallmark activities of debt collection. . . .We are not persuaded that CCI must engage in such more central debt-collection activities in order to participate meaningfully in that process. Meaningful participation in the debt-collection process may take a variety of forms. In similar cases, for example, lower courts have applied a litany of factors related to an entity’s participation in the debt-collection process, including the amount of control the entity exercises over the collection letters it sends, the amount of contact the entity has with debtors, whether the entity invites and responds to debtor inquiries, whether the entity may receive or negotiate payments, whether the entity receives or retains full debtor files, and whether the entity is involved in further collection activities if the debts remain unpaid. See, e.g., Hartley v. Suburban Radiologic Consultants, Ltd., 295 F.R.D. 357, 371–72 (D. Minn. 2013); Mazzei v. Money Store, 349 F.Supp.2d 651, 659–60 n.6 (S.D.N.Y. 2004); Sokolski v. Trans Union Corp., 53 F.Supp.2d 307, 313 (E.D.N.Y. 1999). Such considerations are surely not exhaustive of the ways in which one might meaningfully participate in the collection process, but we agree that activities of such sorts may evidence genuine involvement in the collection process and that our inspection of an entity’s collection efforts must be holistic. The key is whether, in consideration of all that an entity does in the collection process, it genuinely contributes to an effort to collect another’s debt, or instead does little more than act as a mailing service for the creditor. See, e.g., Vincent, 736 F.3d at 103 (“[T]he appropriate inquiry is whether the third party … merely operat[es] as a conduit for a collection process that the creditor controls.” (internal quotation marks omitted) ); Hartley, 295 F.R.D. at 371 (flat-rater does “little more than coordinate the mailing of letters and forward responses to the creditor”); Peters v. AT&T Corp., 43 F.Supp.2d 926, 929 (N.D. Ill. 1999) (“[C]ourts have focused on whether the collection agency was hired only as a mailing service ….”); see also S. Rep. No. 95-382 (1977) (“[T]he flat-rater is not in the business of debt collection, but merely sells dunning letters.”). Although CCI could not negotiate, process, or seek to compel repayments, it participated in the attempts to collect debts owed to PeaceHealth in a variety of other ways. Undisputed evidence in the record shows that: (1) CCI independently screened accounts for barriers to collection; (2) CCI alone drafted and mailed the collection letters, without input from PeaceHealth; (3) the letters invited debtors to contact CCI by mail or phone and CCI trained its personnel to handle such inquiries; (4) CCI in fact received approximately 500 calls a week from debtors of its various clients and received several hundred pieces of mail from PeaceHealth debtors; (5) in their conversations with debtors, CCI staff provided a variety of information about their debts and how to repay them; (6) CCI maintained a website where PeaceHealth debtors could access individualized information about their debts and submit documents to CCI; and (7) CCI sometimes received and forwarded to PeaceHealth payments it received from debtors. Certainly, CCI could have been more directly interested in the outcome of PeaceHealth’s attempts to collect on patients’ debts. Nonetheless, CCI’s assistance in facilitating those efforts went beyond acting simply as a mailing house for PeaceHealth. We are persuaded that CCI’s efforts were enough to have participated meaningfully in the attempts to collect debts like Echlin’s.