Everyone in the debt collection industry is familiar with the Fair Debt Collections Practices Act (FDCPA). Reputable collections agencies willingly follow these rules and treat patients with compassion and respect. We previously wrote about the recent changes from the FDCPA regarding contacting a person via email and text messages.
Now the FDCPA is in the news again.
A case was brought in front of the Eleventh Circuit. Here’s a review of that case, Hunstein v. Preferred Collection and Management Services, Inc. and what it could mean for the debt collection industry.
Background on This Case
The debt collection company electronically sent the following information to its third-party vendor:
- The consumer’s name and address
- Balance owned
- Name of the creditor
- The debt concerned his son’s medical treatment
- The name of his son
The consumer sued the debt collector, saying the transmittal of that information was a communication in connection with the collection of debt and that it violated 15 U.S.C. §1692c(b).
The District Court dismissed the complaint. They ruled that the transmittal of information did not qualify as a communication “in connection with the collection of a[ny] debt.”
The consumer appealed, the case went to the Eleventh Circuit and they reversed the decision.
Will This Result in Immediate Changes?
Absolutely not. The debt collector is petitioning for en banc review. If granted, this means the case goes before the full court of appeals judges and there is the chance to change the Court’s mind. In addition, industry and trade associations plan to file friend of the court briefs in support of the collection agency’s position.
It’s important to note that this is only binding in the Eleventh Circuit and the consumer is not entitled to a judgment for damages.
The Consumer Financial Protection Bureau And Third-Party Vendors
One of the main purposes of the CFPB is to stop unfair, deceptive, or abusive acts by debt collectors. The CFPB never said it wanted to stop collections agencies from performing their jobs.
The CFPB’s exact words are: “... supervised banks and non-banks to oversee their business relationships with service providers in a manner that assures compliance with Federal financial consumer law.”So, using service providers is an accepted practice.
Importance of a Vendor’s Reputation
This case illustrates why it’s essential that the firm you hire to help with your debt collection needs is up-to-date on all regulatory requirements. There are a lot of regulations in this industry and we always stay up-to-date on all changes.
We also go one step further by providing a client view portal. This enables you to access all of your accounts whenever you want. This transparency, combined with strictly complying with all regulations, are two reasons many of our clients have been with us for over 20 years.
Contact Us For Your Debt Collection Needs
To learn more about Credit Management Company and how we can help you understand these recent changes, contact us.