Where was this ruling three years ago? A New Jersey Appeals Court has affirmed the dismissal of a Fair Debt Collection Practices Act case, ruling that the defendant’s use of a vendor to print and mail letters is not a violation of the statute, because sending the plaintiff’s information to the vendor to print and mail a letter was not an attempt to collect on the debt.
The background: The case stemmed from a collection letter sent to a consumer. The defendant hired a third-party letter vendor to prepare and mail the collection notice, which included the consumer’s name, address, account number, and balance due. These suits became all the rage a few years back when a case initially ruled that the use of a letter vendor was a communication in an attempt to collect a debt. Known by the plaintiff’s name — Hunstein — this case ultimately ended up being dismissed on the grounds that the plaintiff did not suffer a concrete injury and thus did not have standing to sue. This suit was one of thousands of cases that were filed nationwide against collection operations that used letter vendors.
- The consumer in this case filed a class action, arguing that by sharing his information with the vendor, the agency had communicated with a third party in violation of Section 1692c(b) of the FDCPA, which prohibits debt collectors from communicating “in connection with the collection of any debt” with anyone other than the consumer, their attorney, or other specifically authorized entities.
- The complaint also included claims for negligence, invasion of privacy, and violations of the New Jersey Consumer Fraud Act, though those claims were later dismissed or withdrawn.
- The trial court ultimately dismissed the FDCPA count for failure to state a claim, and the plaintiff appealed.
The ruling: The Appeals Court upheld the lower court’s decision, concluding that transmitting a consumer’s information to a letter vendor is not a communication “in connection with the collection of any debt.” Rather, the court described it as “an internal step to facilitate mailing the collection letter,” not an effort to induce payment.
- “Only communications whose primary purpose is to induce payment violate the FDCPA’s third-party communication restrictions,” the opinion stated. The judges further noted that “the FDCPA does not apply to every communication made to a third party,” and that the plaintiff’s interpretation of the statute was “too literal.”
- The court declined to consider federal appellate decisions from other jurisdictions interpreting similar issues, reminding that “decisions of the federal courts of appeals are not binding on this court.”
- Ultimately, the appellate panel affirmed that using a third-party vendor to print and mail letters does not violate the FDCPA — the kind of ruling on the merits that the industry has been seeking.
