Judge Rules for Defendant in Third-Party Disclosure Case

It might not be a Hunstein case, but a District Court judge in Missouri has granted a defendant’s motion for judgment on the pleadings after it was sued for allegedly violating the Fair Debt Collection Practices Act by disclosing the existence of a debt to a third party — in this case a bankruptcy attorney who received a letter from the defendant in regards to a debt for a consumer he was not representing.

A copy of the ruling in the case of Magdy v. I.C. System can be accessed by clicking here.

The plaintiff received a letter from the defendant, seeking to confirm he was representing a consumer. The plaintiff had been identified as an attorney representing the consumer and the defendant asked the plaintiff to make contact regarding the representation.

The plaintiff did not recognize the name of the consumer as a current or former client and was “forced to engage in an exhaustive search” to make sure the consumer was not, nor had ever been a client. This was the defendant’s strategy all along, according to the plaintiff. The letter “was sent precisely to harass and annoy Plaintiff and was done so with malicious intent” because the plaintiff had helped discharge many debts that were owed to the defendant, according to the complaint.

The plaintiff filed suit, alleging the letter violated Section 1692c(b) of the FDCPA by disclosing the existence of a debt to a third party. But, as Judge Henry Edward Autrey of the District Court for the Eastern District of Missouri noted, only consumers have standing to bring a 1692c(b) claim against a collector. Because the plaintiff was not a consumer, as far as the FDCPA is concerned, he had no standing to bring this cause of action.

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