Eleventh Circuit dismisses debt collection letter case for lack of quality – Financial Services

On September 8, the United States Court of Appeals for the Eleventh Circuit issued an order in Hunstein v. Preferred Collection and Management Services, Inc. dismissing the case after determining that the plaintiff did not allege concrete harm and therefore lacked standing to sue the debt collector for its use of a third-party mail provider in connection with its debt collection activities receivables (we discussed this matter in a previous blog post here).

The Eleventh Circuit previously ruled that the debt collector of
hunstein violated the FDCPA by using a third-party commercial mail provider to write, print, and send debt repayment letters on the grounds that it was a transmission of a consumer’s private data in connection with a debt under of the FDCPA. To overturn this earlier decision, the Eleventh Circuit relied heavily on the United States Supreme Court’s decision in
TransUnion v. Ramirez in its analysis of whether the plaintiff has sufficiently alleged the type of concrete harm necessary to confer standing under Article III – in particular, the instruction to draw an analogy with common torts law. Citing Trans Unionthe
hunstein The tribunal explains that when considering whether an alleged non-material harm is concrete for the purposes of standing under Article III, courts “will consider whether it corresponds to harm ‘traditionally recognized as the basis for suits in American courts'” – in other words, “to see if a new evil is similar to an old evil.” By applying this standard, the hunstein The court found that the harm alleged by the plaintiff in this case—disclosure to a private party—was not akin to the common law tort of disclosure to the public, which requires publicity. Without publicity, the court found no invasion of privacy, and therefore no real harm.

In the dissenting opinion, Circuit Judge Newsom, joined by four other circuit judges, explained that the court should not consider whether the plaintiff has sufficiently argued a common law tort action, instead arguing for an approach ” compare the harms”, that is, to compare the harm that the FDCPA was intended to remedy against the harm that the common law tort was intended to remedy, and determine whether those harms have a “sufficiently close relationship”.

Put into practice : This decision is, at least for now, a victory for debt collectors, especially for actions considered by many to be harmless and industry-standard practices of using third-party vendors to send reimbursement communications. to consumers. Of course, other appeals are possible in this case, and there remains some lack of clarity about the scope of the FDCPA and the use of third-party vendors.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.