The TPPPA Files Amicus Brief in Hunstein Case Supporting Rehearing

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The Third Party Payment Processors Association (TPPPA) filed an amicus brief on Tuesday in support of the rehearing by Eleventh Circuit Court of Appeals in the Hunstein case.

"The TPPPA feels that the court did not fully grasp the far-reaching and disastrous implications of this ruling," said Marsha Jones, TPPPA President. "Third-party service providers are critical to the entire financial services industry generally, and electronic payment processing specifically."

On June 1, 2021 the TPPPA filed an amicus brief at the United States Court of Appeals for the Eleventh Circuit in Hunstein v. Preferred Collection and Management Services, Inc. (USCA11 Case 19-14434)

The decision relates to the Fair Debt Collection Practices Act (FDCPA) and the use of a third-party service provider, specifically a letter vendor. The Eleventh Circuit held that the plaintiff stated a claim under the FDCPA, stating that the debt collectors's use of this third-party service provider violated the consumer's privacy under the FDCPA. The Eleventh Circuit represents the states of Alabama, Florida and Georgia, but this decision had far-reaching implications across the country, and beyond the collections industry, as FDCPA lawsuits against companies utilizing third-party service providers have increased.

"The TPPPA membership feels that the court did not fully grasp the far-reaching and disastrous implications of this ruling," said Marsha Jones, TPPPA President. "Third-party service providers are critical to the entire financial services industry generally, and electronic payment processing specifically."

The TPPPA made the following points in the amicus brief:

  • The panel's decision is of particular interest to the TPPPA because payment processors are third-party service providers in every industry, including debt collection, and this decision threatens to undermine the ability of debt collectors to leverage the technology and expertise of payment processors to facilitate compliant, efficient and secure electronic payments. The panel's focus on sharing private information with third-party service providers cuts at the heart of the services that payment processors provide for all industries;
  • Debt collectors may be unable to utilize payment processors thereby denying consumers the choice of paying their debts online or over the telephone which provides the consumer the ability to schedule payments and to know when the funds will be withdrawn from their bank accounts.
  • Payment processors are essential in the payments ecosphere because most merchants, including debt collectors, lack the technology and payments compliance expertise to transmit electronic payments to banks for settlement; and
  • The CFPB, whom Congress gave authority to regulate, enforce and interpret the FDCPA, expressly permits the use of third-party service providers by covered persons like debt collectors.

A decision on whether the court will rehear this case is expected within 90 days.

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