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Though the volume of Hunstein cases has slowed significantly, cases are continuing to be brought. Surprisingly, the newer cases these days have largely been in just a few states like Florida, New York and Illinois. 

The West Coast has seen little activity in comparison, but that is likely to change after a new opinion from a federal court in Washington. In Jackin v. Enhanced Recovery Company, a consumer filed a putative class action alleging that the debt collector defendant violated the FDCPA simply because a print vendor was used to print and mail a debt collection letter, allegedly resulting in a third party disclosure. The defendant moved to dismiss the case, and the court was called upon to decide whether the use of a printer plausibly states a claim under the FDCPA.

The court followed Hunstein with a strict reading of the FDCPA and concluded there was a claim.  

The court reasoned as follows: 

(1) the FDCPA broadly prohibits any communication with a third party regarding a debt, subject to some exceptions that do not include a printer;

(2) that the transmission of the data to the printer was a “communication” under the FDCPA; and,

(3) that a vendor is a “person” to whom the debt was disclosed, rejecting the argument that the printer is not a person but a “medium” through which the debt collector communicates with the consumer. 

The court also rejected an argument that the “communication” with the printer was permitted because the vendor is an agent of the debt collector, finding that argument was premature and required further discovery on the exact nature of the relationship between debt collector and printer. More troubling though, the judge said even if the printer was an agent of the debt collector, that did not necessarily make the communication permitted, as the FDCPA does not include a general exception for third party disclosures to all agents.  

Last, the court was not persuaded that prior regulatory guidance and lack of enforcement actions from the CFPB and FTC means that the regulators condone the use of printers, and found that the debt collector had no First Amendment free speech rights implicated by a finding that debt collectors cannot communicate with vendors. 

Concluding that the plaintiff’s claim had merit, the court “recognized the economic burden that its holding may have on Defendant, as Defendant can no longer legally outsource its collection efforts to commercial mail vendors in the same manner. But the Court must take Congress at its word, which here bars Defendant’s outsourcing practice. The statute explicitly provides for several disclosure exceptions, but mail vendors are not included on these exemptions.”

The take-away – the Hunstein contagion is likely to spread based on this case. We have some ideas on how to vaccinate yourself from this spread- we are here to help!