The U.S. District Court for the Eastern District of Pennsylvania on Feb. 7 handed down a decision finding that the mere use of a letter vendor is sufficient to allege a violation of 15 U.S.C. § 1692c(b) of the Fair Debt Collection Practices Act by transmitting information to the letter vendor.
A copy of the decision in Khimmat v. Weltman, Weinberg and Reis Co., LPA can be found here: Link to Opinion.
The Court determined that the transmission of information to a letter vendor is a “communication,” and that the communication is “in connection with the collection of any debt” within the meaning of § 1692c(b).
In denying the defendant’s motion for judgment on the pleadings, the Court rejected an argument that the letter vendor was exempt from § 1692c(b)’s coverage because it served as the defendant’s “agent.”
First, the Court noted that Congress did not exempt any agents other than those specifically listed in § 1692c(b). Next, the Court explained that even if agents were exempt, there was no evidence showing that the defendant directed or had control over the vendor’s printing or mailing activities, an essential element of an agency relationship.
The Court also rejected an argument grounded in the First Amendment, finding that the government had a substantial interest in limiting disclosure of a consumer’s status as a debtor and that it proportionally advanced that interest through § 1692c(b).
Similarly, the Court was not persuaded by the apparent approval of the use of letter vendors by the CFPB and the FTC. Instead, the Court explained that the CFPB and the FTC “have not addressed the use of letter vendors in any legally significant way.”
The Court did, however, note that the parties can address the issue of standing if it turns out that the letter vendor merely processed, and did not read, consumer information; but at the pleadings stage the Court inferred from the complaint that the vendor read the plaintiff’s information.