A collector's routine use of a letter vendor, without any public disclosure, is unlikely to support an FDCPA lawsuit in federal court.
A consumer whose debt information was sent by a collector to a commercial mail vendor lacked Article III standing, because the alleged harm lacked the publicity element essential to the comparator tort of public disclosure of private facts; the case was dismissed without prejudice.
- Case
- Hunstein v. Preferred Collection & Management Services, Inc.
- Citation
- No. 19-14434 (11th Cir. Sept. 8, 2022) (en banc)
- Court or agency
- U.S. Court of Appeals for the Eleventh Circuit (en banc)
- Date
- September 8, 2022
- Precedential
- Yes (published)
- Law
- FDCPA
Summary
A collection agency sent a father's name, his son's name, the balance, and the fact that the debt was for the son's medical care to a mail vendor that printed the dunning letter. A panel twice found standing under § 1692c(b). The full Eleventh Circuit, 8-4, held there was no concrete injury and ordered the case dismissed.
Background
Richard Hunstein did not pay a hospital bill for his son’s treatment. The collector, Preferred Collection and Management Services, hired a commercial mail vendor to send him a dunning letter. To do that, it sent the vendor his name, his son’s name, the amount owed, and the fact that the debt was for his son’s medical treatment. Hunstein sued, alleging this was a prohibited communication with a third party “in connection with the collection of any debt” under 15 U.S.C. § 1692c(b).
The district court dismissed on the merits. In 2021, an Eleventh Circuit panel reversed (994 F.3d 1341), finding standing and a plausible violation. Because letter vendors are widely used in the collection industry, that decision prompted a wave of similar suits. After TransUnion v. Ramirez, the panel vacated and reissued its opinion, again finding standing, over a dissent. The full court then granted rehearing en banc.
What the court held
The en banc court, 8-4, vacated and remanded with instructions to dismiss without prejudice. Judge Grant wrote for the majority; Chief Judge William Pryor concurred, and Judge Newsom wrote the principal dissent, joined by three judges.
Hunstein’s only theory of concrete harm was that the transfer resembled the tort of public disclosure of private facts. Under TransUnion, a new statutory harm need not be an exact duplicate of a traditional one, but it cannot be missing an element “essential to liability.” Public disclosure requires publicity, and Hunstein alleged none. As the court explained, “Without publicity, a disclosure cannot possibly cause the sort of reputational harm remediated at the common law.”
The court added that Hunstein was “simply no worse off” because a vendor filled in a form letter, and that the public was not aware of his debt. Quoting TransUnion, it concluded: “No concrete harm, no standing.”
Our take
Hunstein is not a Fifth Circuit decision, but it shaped FDCPA litigation nationwide, including in Texas, where many vendor-based suits were filed while the panel decision stood. The en banc ruling decided only standing. It did not decide whether sending data to a vendor violates § 1692c(b), and the dismissal was without prejudice.
The lesson for consumers is that third-party disclosure claims are strongest when real people in your life, such as family members, coworkers, or neighbors, actually learned about your debt.
What it means if you’re sued in Texas
If you believe a collector disclosed your debt to someone it should not have, focus on who learned about it and what harm followed. Keep any messages, voicemails, or names of people who were contacted. A free case review is available if a collector has exposed your debt to others.
Takeaway
Courts look for real exposure or harm, not technical data transfers. Privacy claims are strongest when your debt was actually revealed to people in your life.
Sources
Primary authority
Secondary sources
This summary and analysis are general information, not legal advice. Later decisions, amendments or agency actions may change the law; check the current status before relying on it.