A District Court judge in Wisconsin has granted a defendant’s motion to dismiss a Hunstein lawsuit, ruling the plaintiff lacked standing to sue because “[a] debt collector that outsources the mechanical tasks of preparing and mailing letters that the debt collector itself is authorized to send does not inflict any concrete injury on the debtor.”
A copy of the ruling in the case of Nabozny v. Optio Solutions can be accessed by clicking here.
The plaintiff sued, alleging the defendant violated the Fair Debt Collection Practices Act by sharing information about the plaintiff’s debt — the existence of a debt, the amount, the name of the creditor, and the plaintiff’s name and address — with a third party that was contracted by the defendant to print and mail its collection letters. Sharing such information with the vendor constituted a violation of Section 1692c(b) of the FDCPA, according to the plaintiff.
The plaintiff alleged that sharing such information with a third party violated her right to privacy, thus conferring standing for her to pursue her lawsuit.
But, as Judge James D. Peterson of the District Court for the Western District of Wisconsin noted, violating the right to privacy involves “private facts” that “become widely known, or at least known by people with a close relationship to the plaintiff.” In this case, the plaintiff did not have a close relationship with the vendor used by the defendant to print and mail its letters so there is no cause for any “embarrassment.”
The plaintiff wanted the judge to follow the Eleventh Circuit’s ruling in Hunstein v. Preferred Collection & Management Services, but Judge Peterson correctly noted that the ruling has been vacated pending the outcome of an en banc rehearing later this month.
“The harm that Nabozny alleges does not harm an interest the FDCPA sought to protect,” Judge Peterson wrote.”The record shows that Congress was concerned with disclosures to people who knew the debtor, not limited disclosures to third-party providers of clerical services.
The inaction of the Consumer Financial Protection Bureau, the agency tasked with promulgating regulations to implement the FDCPA , is further evidence that Congress did not seek to prevent the use of outside vendors to send collection letters. The CFPB is aware that most debt collection agencies use third-party vendors to send written communications. But the CFPB did not address the practice in the newest regulations implementing the FDCPA , despite creating several other rules related to permissible communications.”
