A New Jersey Appeals Court on Friday issued rulings in four separate cases affirming dismissals of lower court rulings in Fair Debt Collection Practices Act class-action cases that all had the same backstory – Hunstein cases – in which the plaintiffs accused the defendants of violating the statute by using a third-party to print and mail collection letters.
The background: The cases in question stemmed from allegations made by plaintiffs who had incurred debts and had their information shared with third-party letter vendors by debt collectors. These plaintiffs filed suit, claiming that the use of a third-party vendor to draft, print, and send collection letters violated the FDCPA, specifically provisions regarding communication with third parties — a complaint that was popular a few years ago in the wake of a ruling in the case of Hunstein v. Preferred Management and Collection Services.
- The plaintiffs alleged that such actions violated the FDCPA’s prohibition on disclosing information about a debt to third parties without the consumer’s consent, and raised claims under New Jersey’s Consumer Fraud Act (CFA), negligence, and invasion of privacy.
- In all four cases, the court dismissed the claims, siding with the defendants.
The rulings: The appeals court reasoned that the FDCPA’s restrictions on communication with third parties were intended to protect consumers from abusive practices such as disclosing debt information to family members, friends, or others who might cause embarrassment. The court found that simply sharing the debt information with a third-party vendor for administrative purposes like letter creation did not fall within the scope of practices Congress sought to prevent when it enacted the FDCPA.
- In one ruling, the court stated, “To say that it does creates an uncritical literalism, which is not appropriate,” emphasizing that the purpose of the statute was not violated by such routine administrative tasks.
- The court also noted that there was no evidence that the information shared with the vendor had been misused or disclosed to others in an inappropriate manner. Furthermore, the plaintiffs could not demonstrate harm or damages from the disclosure of their debt information for the purpose of letter generation.
- The court also dismissed the plaintiffs’ claims under the CFA, stating that the transmission of debt information to a vendor was not unconscionable, fraudulent, or deceptive under New Jersey law.
- In the negligence and invasion of privacy claims, the court ruled that the plaintiffs failed to show that the defendants had a duty to prevent the sharing of information with the vendor or that the disclosure caused harm or violated privacy rights.
Read the rulings here, here, here, and here
