The 11th Circuit Court of Appeals issued an opinion in Hunstein v. Preferred Collection and Management Services, Inc. It immediately raised major concerns for the debt collection industry. The plaintiff alleges that a debt collector violated the FDCPA by electronically transmitting information concerning a consumer's debt to its mail vendor for the purpose of sending a dunning letter. It was agreed upon that using mail vendors has been common in the collection industry, and the plaintiff did not allege a substantial harm arising from the alleged statutory violation. The court held that the transmission of data constituted an unlawful communication in connection with the collection of a debt.
This decision has disrupted the collections industry and might increase costs to those who use vendors to communicate with debtors. There has been a quick response from debt collectors and the defendant will pursue en banc from the 11th Circuit, where industry groups will submit amicus briefs.