New Decision in the Hunstein Case: Our Work Continues
On October 28, 2021, we received a new decision in the Hunstein case. Unfortunately, the decision portends more work ahead for industry.
As a brief recap, the Hunstein case involves an individual claim against a debt collector. The allegation is that the debt collector violated the Fair Debt Collection Practices Act (FDCPA) by sending specific information about the debt to a third-party. In this case, the third party was a print vendor, which is a company engaged to prepare mail for the debt collector to send at the debt collector’s direction.
The case has caused a great deal of concern in the financial services sector, as financial institutions have historically used print vendors and other third parties without being held to violate the FDCPA.
The most recent decision by a three-judge panel of the Eleventh Circuit Court of Appeals replaces a prior decisionby the same panel. While the current decision is primarily about whether the plaintiff had standing to sue the debt collector, the court discussed the operative section of the FDCPA, which provides:
a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
The court considered whether, based on the language of the statute, the communication by the debt collector of information regarding the plaintiff was a communication in connection with the collection of a debt. In short, the court found that the communication to the third party was prohibited under the statute, regardless of the longstanding practice of using such vendors. The defendant specifically attempted to sway the court with evidence of the widespread industry practice of using print vendors, but the court was not persuaded. The opinion recognizes that this decision will be disruptive to the debt collection industry, but that the court acted based on its understanding of the statute. The court correctly observed that Congress can readily change the law to better reflect the desired outcome.
There are additional appeal opportunities for this decision, and AFSA will continue to monitor the issue and coordinate with other interested parties.
October 28th, 2021 by Dan Bucherer