In a case that was defendant by Jonathan Robbin at J. Robbin Law, a New York Appeals Court has reversed a lower court’s ruling and granted a defendant’s motion for summary judgment in a Hunstein third-party disclosure case, ruling that the use of a mail vendor to contact a consumer in a legitimate attempt to collect a debt is “not a practice the [FDCPA] was meant to prohibit.”
The background: The plaintiff filed suit in 2022, alleging multiple violations of the Fair Debt Collection Practices Act, New York General Business Law Section 349, and various negligence claims.Two primary claims were at the center of the dispute:
- Mailing Vendor Theory – The plaintiff alleged the defendant unlawfully disclosed private account information to a third-party mailing vendor when sending a debt collection letter.
- Unknown Creditor Theory – The plaintiff claimed the defendant did not own the debt it was attempting to collect.
The lower court denied the defendant’s summary judgment motion as premature, allowing for more discovery.
The ruling: The Appellate Court reversed the ruling, holding that the defendant had shown it was entitled to a judgment and that further discovery was not warranted.
- On the mailing vendor theory, the court joined a growing list of federal and state decisions rejecting Hunstein-based FDCPA claims, stating: “Using a mailing vendor to contact a consumer in a legitimate attempt to collect a debt is not a practice the [FDCPA] was meant to prohibit.”
- The court also found no basis for the plaintiff’s Section 349 or negligence claims, noting that the defendant’s conduct was neither deceptive nor a breach of duty.
- On the unknown creditor theory, the defendant provided affidavits, bills of sale, and assignments showing the debt was validly transferred from the original creditor. The court ruled that electronically signed transfer documents were valid under New York law and that the plaintiff failed to raise any genuine dispute over their authenticity.
