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The Hunstein Effect – What’s Next for Debt Collectors and Their Third-Party Service Providers

  • Written by Steel Rose

The U.S. Court of Appeals for the Eleventh Circuit has delivered a novel and highly consequential interpretation of the Fair Debt Collection Practices Act that is potentially transformative for debt collectors and their third-party service providers.

On April 21, 2021, in Hunstein v. Preferred Collection and Management Services, Inc., -- F.3d – (2021), the U.S. Court of Appeals for the Eleventh Circuit issued a decision on a case of first impression, finding that a debt collector’s transmittal of a consumer’s personal information to its letter vendor constituted a prohibited third-party communication “in connection with the collection of any debt” within the meaning of section 1692c(b) of the Fair Debt Collection Practices Act (“FDCPA”). As discussed below, this ruling has broad ranging ramifications for the accounts receivable management industry and will likely foster a new wave of litigation under the FDCPA.  To read more click here

Going forward, this case will likely lead to a significant increase in FDCPA litigation and cause debt collectors to reexamine their operations to minimize liability in light of this decision. Along these lines, as an interpretative determination of first impression, this holding will likely have implications within the retroactive one-year limitation period for filing suit. What’s more, although the decision is only precedential for the Eleventh Circuit, it may be used elsewhere as persuasive authority. Finally, it should be noted that this decision may apply to a broad range of third-party providers.