ATLANTA— An appeals court has upheld an opinion that sharing debtor information with a third-party is actionable and a violation of the Fair Debt Collection Practices Act (FDCPA).
The ruling came from the original panel of 11th Circuit Court of Appeals judges that decided the Hunstein v. Preferred Collection and Management Services, Inc. case in April, which has now vacated its opinion and issued a substitute opinion upholding the original ruling.
Hunstein v. Preferred Collection and Management Services involves a defendant debt collector electronically transmitting the plaintiff debtor’s name, outstanding balance, to whom the debt was owed, and the circumstances surrounding the debt to a third-party mailing services vendor; The panel held that this act was in violation of the FDCPA, as the FDCPA prohibits debt collectors from communicating personal information to third parties, NAFCU explained in its analysis.
“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 stated.