Outsourcing Demand Letters Can Flout Federal Debt-Collection Law

A debt collector’s practice of sending consumer information to a commercial mail vendor to generate demand letters could violate federal debt-collection law, because it is considered transmitting private data “in connection with the collection” of a debt, the Eleventh Circuit ruled Wednesday.

Richard Hunstein sued Preferred Collection and Management Services Inc. under the Fair Debt Collection Practices Act after the company hired Compumail to produce a demand letter, commonly called a dunning letter, in the course of collecting Hunstein’s medical debt, which he had incurred to Johns Hopkins All Children’s Hospital for his son’s medical treatment.

Preferred allegedly sent the ...