No, Sending Information to Your Mail Vendor is Not Third-Party Disclosure, Says M.D. Fla.

If there's a constant in this industry, it is that debt collectors will see some of the oddest, craftiest claims from consumers alleging violations of the Fair Debt Collection Practices Act (FDCPA). Just when you think you've seen it all, something new pops up—like a recent claim brought in the Middle District of Florida.

In Hunstein v. Preferred Collection & Mgmt. Servs., No. 8:19-cv-983 (M.D. Fla. Oct. 29, 2019), plaintiff alleged that a debt collection agency's action of sending debt information to its mail vendor—so that the mail vendor could prepare and mail the collection letter received by plaintiff—was unauthorized third-party disclosure of the existence of a debt. 

Plaintiff cast his fishing line, but the court didn't bite. Instead, the court granted the debt collector's motion to dismiss the claim based on whether or not the communication was "in connection with the collection of a debt." In order to meet this criterion, the communication would need to include an express or implied demand for payment, according to precedent set by the Eleventh Circuit Court of Appeals and other decisions in this jurisdiction.

The court found that plaintiff conflated two different communications: the transmission of information to the mail vendor and the actual debt collection letter sent to plaintiff. While the latter was clearly a communication in connection with the collection of a debt, the former was not. The court stated:

After careful review, the Court finds that Hunstein does not and cannot allege that Preferred attempted to collect Hunstein’s debt from CompuMail. . .The fact that the debt collection letter that CompuMail generated and sent would be considered a “communication in connection with the collection of a debt” does not make the transfer of information to CompuMail a communication in connection with the collection of a debt. 

(Internal citation omitted.)

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insideARM Perspective

There are so many larger issues associated with third-party disclosure in debt collection, especially as communication channels continue to evolve. Not only is call labeling a very real thing right now—where the debt collector itself has little to no influence on how its calls are labeled—enhanced caller ID is also a wave hitting mobile communications. It seems a little silly that amid these significant third-party disclosure hurdles, plaintiffs are taking potshots at a debt collector's use of a mail vendor to send collection letter. 

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