Getting payment on an overdue debt is rarely an easy task. Rather than trying to hide, they may argue that the collection violates various laws and regulations. One such example was the Hunstein v. Preferred Collection and Management Services, Inc. While our firm was not involved in this case, it illustrates how a debtor may try to fight back and avoid paying their debt.
A Recent Example
The U.S. Court of Appeals for the Eleventh Circuit case involves the debtor claiming that a hospital should not have transferred a sizeable medical bill debt collection to a commercial mail vendor. The company reached out to the patient, so the patient answered by claiming that disclosing information to a third party violated the Fair Debt Collection Practices Act (FDCPA). The plaintiff went further, claiming there was actual harm, citing U.S. Supreme ruling on TransUnion that a statutory ruling should be “real” to move forward.
The debtor argued that the public disclosure of private facts, adding that the FDCPA violation involved using the wording “in connection with the collection of any debt,” required a demand for payment from the consumer. The debtor argued that the act of sharing private information caused real and actual harm. The Circuit Court disagreed, pointing out that the disclosure and communication did not cause real harm comparable to a tort claim involving the public disclosure of private fact. Since the court ruled there was no public revelation, it dismissed the case. In short, the debtor lost their fight.
What This Means For You
Businesses and creditors should note this decision. Since the vendor was acting as an agent for the defendant, there was an agreement between the two parties. A creditor can legally hire a third-party representative and share private information the third party can use to act on the creditor’s behalf without causing harm that violates the FDCPA.