The third-party collections industry celebrated on Friday, September 8, 2022 when the Eleventh Circuit dismissed Hunstein vs. Preferred Collection & Mgmt. Servs, Inc., a controversial case which threatened to stop third-parties from using letter vendors to create and mail letters to consumers. But the celebration may have been a bit premature.
Why? For one, the dismissal doesn’t actually resolve anything. The case was dismissed because Mr. Hunstein lacked the standing to bring it, and the dismissal says nothing of the merit behind the initial complaint. It also does nothing to prevent or dissuade Plaintiff attorneys from copycat cases in state courts. In fact, the Court explained specifically that their ruling was related only to this plaintiff in this action. Mr. Hunstein could also refile or appeal the ruling, as it was dismissed without prejudice.
Hunstein doesn’t directly impact outsourcing by collections & recovery departments at lenders and originators, but it does affect your vendors and it may not be going away.
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