Judge Approves Arrow Settlement of Wiretap Suit
The Daily Record, November 2004

By Alisa Bralove

A nationwide debt collection agency with a call center in Gaithersburg has agreed to pay $9 million to settle a class action lawsuit that alleges the company violated Maryland’s wiretap statute by recording collection calls without customer permission.

According to the terms of the settlement, given final approval yesterday by Montgomery County Circuit Judge John W. Debelius III, Arrow Financial Services LLC will give a $100 credit to as many as 900,000 consumers who had calls taped without their consent.

Under Maryland’s Wiretapping and Electronic Surveillances Act, it is unlawful to record a conversation in Maryland without notifying the other party.

“These consumers have been subject to this collection company using illegal means to take advantage of them,” said Steven VanGrack, a Rockville attorney representing the class. “Basically, I’d argue that this is a major victory for consumers.”

Gregory L. VanGeison, a lawyer for Arrow in Baltimore, could not be reached for comment yesterday but in the defendant’s motion in support of final approval for the settlement, denied any wrongdoing by his company.

“Here, the named plaintiff and many class members gave consent to have their communications monitored or recorded,” VanGeison wrote.

“Indeed the majority of debtors’ cardholder agreements contain language notifying the cardholders that calls concerning their accounts may be monitored and/or recorded.”

VnnGeison also argued that Maryland’s wiretap law does not apply to calls made to people outside of the state, such as Travis Trombley, the named plaintiff in the Maryland case.

“(I)t is clear that in order to have a claim under the Maryland Act a person must sustain injury within the state,” he wrote.

The Maryland settlement follows another agreement reached with Niles, III based Arrow in the U. S. District Court for the Southern District of California. The California case was brought under the federal Fair Debt Collections Practices Act and California’s Invasion of Privacy Act. The proposed settlement is subject to final approval next month.

Trombley, the class representative in the Maryland case, originally was a named plaintiff in the California action but left that case when the federal court in California declined to extend its supplemental jurisdiction to the Maryland wiretap law.

A 24 year old college student, Trombley filed a separate suit in Montgomery County in June 2003. Under the terms of the settlement, he will receive $2,500 as an incentive payment for his role as the class representative.

Trombley’s motion for summary judgment alleges that Arrow recorded at least four phone calls to him, using a computer software system called Voice Trak.

In the motion for class certification filed in May, lawyers for the class described Arrow’s operation as a “Rambostyle” collection agency.

“Arrow plays by its own rules, ignoring restrictions imposed by the Fair Debt Collections Practices Act and running roughshod over state laws enacted to protect consumer privacy,” the motions states.

Arrow filed an opposition to that motion for class certification.

The parties reached an agreement before hearings on the two motions and submitted the proposed settlement to the court on Sept. 14. Lawyers for the class notified all class members of the settlement either by mail and an advertisement appearing in USA Today, Trombley’s request for final approval states.

No class members have objected to the proposed settlement and just 27 have opted out.

Van Grack’s firm and the San Diego law firm of Majors & Fox will receive $580,000 in attorney’s fees, per the agreement.

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