Debt Collector’s Provision of Consumer Information to Mail Service Is Actionable Under FDCPA

Note: on November 17, 2021, the court ordered that this case be reheard en banc.

In Hunstein v. Preferred Collection & Management Services, Inc., 2021 WL 1556069 (11th Cir. Apr. 21, 2021), the Eleventh Circuit held that a consumer had standing to challenge a debt collector’s provision of the consumer’s information to a third-party mail service and that the consumer’s allegations stated a cognizable claim under 15 U.S.C. § 1692c(b) of the Fair Debt Collection Practices Act (“FDCPA”). The decision has garnered a good deal of attention within the industry.

Richard Hunstein incurred a debt for his son’s medical treatment, and the hospital assigned the debt to Preferred for collection. Preferred then sent information about the debt, including Hunstein’s son’s name, the amount of the debt, and the fact that the debt arose from the son’s medical treatment, to Compumail, a commercial mail vendor. Compumail generated a dunning letter and sent it to Hunstein.

Hunstein filed an action against Preferred alleging violations of the FDCPA and the Florida Consumer Collection Practices Act. Hunstein claimed that Preferred’s transmittal of information to Compumail violated § 1692c(b) of the FDCPA, which generally prohibits a debt collector from communicating with anyone except the debtor “in connection with the collection of any debt,” subject to stated exceptions. The district court dismissed the claim, finding that Hunstein had not sufficiently alleged that Preferred’s communication with Compumail was “in connection with the collection of any debt.” Hunstein appealed, and the Eleventh Circuit reversed.

In an opinion written by Judge Newsom and joined by Judges Jordan and Tjoflat, the court first analyzed Hunstein’s Article III standing, in particular whether he had adequately alleged the required “injury in fact.” The court quickly determined that Hunstein had not alleged tangible harm or a “risk of real harm,” and moved to the question whether he had sufficiently established injury by his allegation of a statutory violation. On that point, the court considered “history and the judgment of Congress,” as instructed by Spokeo. The court determined that the harm alleged in Hunstein’s complaint bore a sufficiently close relationship to the common-law tort of invasion of privacy—in particular to the tort of “public disclosure of private facts.” The judgment of Congress, manifest in the FDCPA’s reference to the “invasion of individual privacy” in its “Congressional findings and declaration of purpose” section, also supported the conclusion that Hunstein’s allegations established standing.

Turning to the merits, the court had little trouble concluding that Preferred’s communication to Compumail was “in connection with the collection of any debt” within the meaning of § 1692c(b). Dictionaries define the phrase “in connection with” and the word “connection” broadly, the court noted, and “[i]t 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.” Preferred’s reliance on the court’s interpretation of another FDCPA provision (§ 1692e) was misplaced, the court continued, in light of the linguistic and operational differences between the two provisions. And the court declined to adopt the factor-balancing test adopted in an unpublished Sixth Circuit opinion, Goodson v. Bank of America, N.A., 600 F. App’x 422 (6th Cir. 2015), because that case concerned §1692e, not § 1692c(b), and “we believe that in the context of § 1692c(b), the phrase ‘in connection with the collection of any debt’ has a discernible ordinary meaning that obviates the need for resort to extratextual ‘factors.’”

Finally, the court acknowledged that its holding might have practical ramifications for the apparently widespread use of mail vendors for debt collection, but “[n]eedless 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.”

Posted by Valerie Sanders.

Back to top