Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

New Interpretation of the Fair Debt Collection Practices Act Rocks the Industry

Client Alert

"It’s not lost on us that our interpretation of § 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry."

This quote from the Eleventh Circuit Court of Appeal in its April 21, 2021 opinion from the case of Hunstein v. Preferred Collection and Management Services, Inc. is possibly the biggest understatement in the history of the Fair Debt Collection Practices Act. At a minimum, the Eleventh Circuit’s opinion has sent shockwaves and fear throughout multiple sectors of the financial services industry.

At issue is the Eleventh Circuit’s interpretation of Section 1692c(b) of the Fair Debt Collection Practices Act which states:

Except as provided in section 1692b of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post-judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

By way of background, this lawsuit originated from unpaid bills for medical treatment. The hospital assigned the unpaid bills to Preferred Collection and Management Services, Inc. (“Preferred”) which operates as a debt collector.  Preferred, like the vast majority of large financial institutions and debt collectors, contracts with a third-party vendor to physically print and mail the collection letters that Preferred sends to various individuals. In conformity with this policy, Preferred sent to its vendor certain information about the Plaintiff including, (1) his status as a debtor, (2) the exact balance of his debt, and (3) the entity to which he owed the debt. The third-party vendor then printed and mailed a dunning letter to the Plaintiff.

Most importantly, no claim was ever made that Preferred sent incorrect information or that the debt was not actually owed.

Despite the benign circumstances, the Eleventh Circuit held that Preferred’s act of communicating the Plaintiff’s information to its own agent violated Section 1692c(b) since it constituted a communication “in connection with the debt.”

The effect of the Eleventh Circuit’s decision will have a national impact on all businesses and individuals operating as a “debt collector” who are now prohibited from communicating a debtor’s information to third-party service providers and vendors (such as mail processors). Although the Eleventh Circuit recognizes the impact of its holding, it has greatly underestimated that impact. There is simply no way for any business to internalize these processes overnight. For a large number of businesses, the Eleventh Circuit’s decision will require new people be hired and trained in addition the purchasing of new equipment; all in the wake of a global pandemic.

Already, the National Creditors Bar Association, the Florida Creditors Bar Association (where the case originated), and other trade associations, have set out to file Amicus Briefs in support of Preferred’s anticipated Petition for Rehearing En Banc. These organizations fear that the Eleventh Circuit’s holding will be weaponized and used to create a new flood of litigation.

In the interim, all businesses and individuals that collect debts as part of their business must immediately review and potentially reevaluate their use of all third-party services; not just mail vendors. 

For additional questions, please contact Litigation Attorney Edward J. Brown at ejbrown@bmdpl.com.


CMS Rescinds EMTALA Guidance for Emergency Abortions

On June 3, 2025, CMS withdrew its 2022 guidance on emergency abortion care under EMTALA, eliminating federal protection for providers in states with abortion restrictions. This policy change could significantly impact how hospitals handle emergency care involving pregnancy complications.

Supreme Court Eliminates Higher Burden for Majority-Group Plaintiffs in Title VII Claims

In Ames v. Ohio Department of Youth Services, the U.S. Supreme Court unanimously ruled that all Title VII plaintiffs, whether from majority or minority groups, must meet the same evidentiary standard. The decision eliminates the “background circumstances rule” and reinforces equal treatment in workplace discrimination claims.

Understanding Reasonable Fear vs. Credible Fear Interviews: A Critical Guide for Immigrants Facing Removal

In his latest article, Immigration Attorney and former Immigration Judge Rob Ratliff offers a clear breakdown of Reasonable Fear vs. Credible Fear Interviews—key procedures for noncitizens seeking protection from persecution or torture. Citing Judge Brian Murphy’s recent ruling on unlawful deportations to South Sudan, Ratliff connects these critical legal standards to current judicial developments. Read the full article at www.removal-defense.com.

House Republicans Propose Cuts to Medicaid to Finance Savings

House Republicans have introduced legislative language that proposes substantial cuts to the Medicaid entitlement program, aiming to achieve significant budget savings through policy changes. The proposed measures include stricter eligibility verification, work requirements for certain adults, and federal funding cuts to states providing coverage to undocumented residents. The Congressional Budget Office (CBO) estimates that the proposed healthcare provisions would reduce spending by $715 billion and could result in 8.6 million fewer people having health insurance by 2034.

Protecting Your Image in the Age of AI-Generated “Deepfakes”

The rapid evolution of artificial intelligence (AI) has transformed how we create and consume digital content, but it also poses significant risks. Among the most troubling developments in AI is the proliferation of AI-generated fraudulent content, often called “deepfakes”.