Appeals Court Rules Third-Party Disclosure Violations Only Apply to Consumers

The Eighth Circuit Court of Appeals has upheld a lower court’s ruling in favor of a defendant that was sued by an attorney for violating the Fair Debt Collection Practices Act because he was sent a letter identifying him as the attorney for a consumer named in the letter, when, in fact, he was not representing the consumer.

Backstory: The plaintiff spent “valuable time and resources” searching his files to come to the conclusion that he had never represented the individual named in the letter. That led him to sue the agency that sent the letter for violating Section 1692c(b) of the FDCPA because it disclosed the existence of a debt to an unauthorized third party. A District Court judge ruled that only consumers can claim a 1692c(b) violation against a collector, and since the attorney was not a consumer, he did not have standing to sue.

The Bad News: The Appeals Court agreed with the District Court judge that the defendant did violate the FDCPA when it sent the letter to the attorney.

The Good News: The Appeals Court agreed with other circuit courts that non-consumers cannot bring 1692c(b) claims.

More Good News: The Appeals Court also rejected an argument by the plaintiff that the proper course of action was to remand the case back to state court, where it was originally filed. While the underlying issue related to the plaintiff’s standing to sue, the decision was based on the merits of his claim, the Appeals Court wrote.

The Last Word: “Because the purpose of § 1692c(b) is to protect consumers alone, we conclude that Magdy falls outside § 1692c(b)’s “zone of interests” and thus cannot invoke the protection afforded by it,” the Appeals Court wrote.

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