At Holland Law Group we monitor changes and developments from all levels of courts across the state of Florida so that we can have the most thorough understanding of the law as the judges are applying it. Whether it's an opinion from a trial court in Sarasota county, Orange county, or any other county across the state, or a ruling from a district court of appeal, we are always on the lookout for new issues we can raise in defense of our clients.
We also keep an eye on developments at the Federal level as well. A recent opinion from the 11th Circuit Court of Appeals, which covers Florida, may force debt collectors to change their practices as it relates to outsourcing tasks to third-party vendors.
In Richard Hunstein v. Preferred Collection and Management Services, Inc., the Plaintiff, Richard Hunstein, incurred a debt to Johns Hopkins All Children's Hospital for medical treatment provided to his son. The hospital assigned the debt to Preferred Collection and Management Services, Inc. (“PCMS”), a debt collector. PCMS then hired a company called Compumail to handle the collection.
PCMS transmitted to Compumail various details including Hunstein's status as a debtor, the amount of his debt, the entity to which the debt was owed, and the fact that the debt was related to his son's medical treatment. Compumail then used this information to generate a “dunning” letter, which is notification sent to customers stating they are overdue in paying an account receivable to the sender.
Hunstein filed a lawsuit against PCMS for violating 15 U.S.C. § 1692c(b) which prohibits, with some limited exceptions, debt collectors from communicating with third parties “in connection with the collection of any debt.” The Court found the result “inescapable” in concluding that the PCMS' communication to Compumail was “in connection with the collection of any debt” under the plain meaning of that phrase.
In making its decision on April 21, 2021, the Court acknowledged that the ruling “runs the risk of upsetting the status quo in the debt-collection industry” as the Court presumes it is the ordinary course of business for debt collectors to share information with third-party vendors. The Court noted that debt collectors may incur “great cost” handling matters internally that were previously outsourced.
Many debt collectors and collection associations have joined PCMS in petitioning the 11th Circuit for a rehearing and have submitted their own separate briefs. The entire industry is anxiously awaiting the results. There are a long list of creditors that use third parties for various parts of their debt collection activities and that applies to cases from Hillsborough county to Miami-Dade county and all other counties from Key West to the panhandle of Florida. If you have been sued by a debt collector, contact us today for a free consultation to see what we can do to help you with your case.