The Eleventh Circuit Court of Appeals has overturned a lower court’s ruling that a debt collector did not violate the Fair Debt Collection Practices Act when it sent an individual’s personal information to a letter vendor to have a collection letter sent to that person. The Appeals Court ruled that transmitting that information constituted a violation of Section 1692c(b) of the FDCPA by communicating information about a debt with a third party and that such a violation is a concrete injury.
A copy of the ruling in the case of Hunstein v. Preferred Collection and Management Services, Inc., can be accessed by clicking here.
The plaintiff’s incurred a medical debt that was placed with the defendant for collection. The defendant electronically transmitted information about the plaintiff, including his status as a debtor, the exact balance of the debt, the entity to whom the debt was owed, that the debt concerned his son’s medical treatment, and his son’s name. That information was added to a collection letter and sent to the plaintiff.
The plaintiff sued, alleging that the disclosure of the information to the letter vendor violated the third-party disclosure provisions of the FDCPA. A District Court judge disagreed and dismissed the suit, which was appealed to the Eleventh Circuit.
Even though he did not allege a tangible harm, just that a debtor may be harmed by the spread of the information, which is akin to emotional harm. But a statutory violation can confer standing, and such a disclosure as one made in this case was enough for the Appeals Court to rule the plaintiff had standing.
“It seems to us inescapable that Preferred’s communication to Compumail at least ‘concerned,’ was ‘with reference to,’ and bore a ‘relationship [or] association’ to its collection of Hunstein’s debt,” the Appeals Court wrote. “We thus hold that Hunstein has alleged a communication ‘in connection with the collection of any debt’ as that phrase is commonly understood.”
The defendant attempted to argue that the phrase “in connection with the collection of any debt” means something more than a mere demand for payment, and that the standard industry practice of using letter vendors has never been considered a third-party disclosure violation ever before. The Appeals Court makes it clear it understands the impact of its ruling, but said it was bound to follow the law as written.
“It’s not lost on us that our interpretation of§ 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry,” the Appeals Court wrote. “We presume that, in the ordinary course of business, debt collectors share information about consumers not only with dunning vendors like Compumail, but also with other third-party entities. Our reading of § 1692c(b) may well require debt collectors (at least in the short term) to in-source many of the services that they had previously outsourced, potentially at great cost. We recognize, as well, that those costs may not purchase much in the way of ‘real’ consumer privacy, as we doubt that the Compumails of the world routinely read, care about, or abuse the information that debt collectors transmit to them. Even so, our obligation is to interpret the law as written, whether or not we think the resulting consequences are particularly sensible or desirable. Needless to say, if Congress thinks that we’ve misread § 1692c(b)—or even that we’ve properly read it but that it should be amended — it can say so.”