The judgment of the Court of Appeal of the eleventh district in Richard Hunstein v. Preferred Collection and Management Services, Inc. raises significant concerns with debt collection agencies using providers for shipping and other types of services that require the exchange of information related to consumer debt. By ruling that such agreements may violate the prohibition on disclosing consumer debt information to third parties under Section 1692c (b) of the Fair Debt Collection Practices Act (“FDCPA”), the panel’s decision has forced many debt collection agencies to reconsider existing business practices . To make matters worse, the Eleventh Circuit has decided that such violations can be enforced even without specific economic damage, which ignites the specter of legal disputes that are subject to legal fees over seller relationships that are not related to a specific consumer harm.
Fortunately, the debt collector is in Hunstein has now moved to rehearse en banc the panel’s decision on the grounds that it contradicted the judgment of the United States Supreme Court in Spokeo, Inc. v Robins and previous Eleventh Circle interpretations of the FDCPA.
The Spokeo The decision examined the concept of Article III in the context of the Fair Credit Reporting Act (“FCRA”) and found that a purely technical breach of consumer protection law is not actionable without a specific breach caused by the breach. in the Hunstein, did not analyze the committee decision as to whether Hunstein’s violation was specific or specific. Indeed, the panel’s decision alludes to the fact that the breach was in Hunstein did not cause such injury. However, the Eleventh Circle believed so Hunstein Lawsuit could be sustained because the alleged breach violates a general right to privacy that underpins the FDCPA’s prohibition on most third party disclosures by debt collection agencies.
The debt collector in Hunstein also argues that the panel’s decision ignores the fact that the third party disclosure in question is in the Hunstein Case is not the type of disclosure that either Congress or the Eleventh Circle have historically viewed as prohibited by the FDCPA. In particular, the debt collector in Hunstein argues that submitting consumer information to a private computer server maintained by a mailing provider is little different from using telegram services, which the FDCPA specifically contemplates, and other types of benign communication services. The debt collector argues that such services do not imply the type of fraudulent public or third party disclosure that the FDCPA was created to prevent – such as advising a consumer’s family and friends about not paying a debt to shame the consumer or humiliate.
It remains to be seen whether the Eleventh Circle will rehearse them Hunstein Case – and whether such repetition can change the outcome of the appeal. While the retrial application is pending, the court’s original ruling dated April 26, 2021 remains in effect. The decision has the potential to force companies that are (or may be) construed as collections to reconsider the use of mailing providers and other types of outsourcing that involve sharing information about consumer debt.