ATLANTA—A court has ruled in favor of a rehearing in a case involving the electronic transmission of debtor information.
The case involves the original panel of judges in the 11th Circuit Court of Appeals, which voted in favor of rehearing the case Hunstein v. Preferred Collection and Management Services, Inc. As a result, the previous panel’s opinion from Oct. 28 has been vacated, NAFCU said.
The previous panel’s opinion from October confirmed the holding of the previous decision that sharing debtor information with a third-party is actionable and a violation of the Fair Debt Collection Practices Act (FDCPA), NAFCU explained.
In this specific case the court held that an electronic transmission of information from a debt collector to a third-party vendor – which included the consumer’s name, outstanding balance, to whom the debt was owed, and the circumstances surrounding the debt – was in violation of the FDCPA, as the FDCPA prohibits debt collectors from communicating personal information to third parties, NAFCU explained.
“The case presents significant impacts for financial institutions subject to the 11th Circuit’s jurisdiction and could have broader impacts on interpretation of the FDCPA – especially for credit unions where a state law requires creditors to follow the FDCPA,” NAFCU said in its analysis.