USFN Associate Member iMailTracking has been closely following Hunstein and the practical effects of its litigation. USFN asked Holly Baya of iMailTracking a few questions regarding Hunstein, its subsequent copycat cases, and its impact on their business and the industry.

Q: What was your initial reaction to the Hunstein case?

A: In late April 2021, I was gearing up to attend my first NCBA Conference, excited to expand my knowledge about collections, then Hunstein came along and ruined my day. We were about a year removed from the COVID-related impacts on mail, and while we felt that pain along with most of our clients, we were adjusting. This was another hit that no one needed.

Q: How did the Hunstein case initially affect your business?

A: We saw clients in the 11^th Circuit reluctantly bringing mail back in house with others outside the circuit following suit in an abundance of caution. We looked to Obduskey, and other decisions like it, taking the position that non-judicial foreclosures do not fall under the FDCPA. Further, that judicial foreclosures do not fall under the FDCPA if the law firm is not seeking a deficiency judgment. Additionally, it was our stance that any other mail that is not a “communication in connection with the attempt to collect a debt,” such as bankruptcy and litigation mail, most association mail, and even debt collector mail that does NOT ask the debtor to pay, could still be processed through a mail vendor.

That said, we are in the business of mail, not legal advice, and every firm had to take a hard look at the way they did business and determine what was best for them. We respected those decisions and learned from every conversation we had on the matter.

Q: How have you adapted?

A: We have taken the intervening time to try to come up with creative solutions to counter the arguments that were the basis of the case. This was especially important considering the surge of copycat cases that began popping up across the country, though most, thankfully, failed to gain traction. These included considerations of modified contractual language and agency arrangements. There is no one-size-fits-all solution, at least not to date, but we remain open to all ideas.

Q: How have you seen the mortgage default servicing industry react and adapt?

A: As we dug in, it became apparent this case had implications far beyond mail vendors. Any firm communication to a third-party service provider could potentially be considered an FDCPA violation. We were heartened when the appeal was filed, and more so seeing all the amicus briefs filed in support by heavy hitters across varied industries, including banking and healthcare.

Q: As you mentioned there have been several copycat cases with varied outcomes and rulings (we feature two examples in this edition). What are your solutions and ideas for moving forward?

A: The recent case out of the Eastern District of Pennsylvania highlights the need for the modernization of the FDCPA, to account for the advances in technology and best practices that have been established since its inception that serve to benefit the law firms, servicers, and ultimately the consumer. We realize it could be years before the Supreme Court would take this up, if ever, and the same goes for a congressional amendment. If the language is left open to interpretation, as it is, the ripples of the Hunstein case could be felt long after it has reached its specific resolution.

@Copyright 2022

USFN Report - Spring 2022