Collectors Can't Disclose Debts to Third Parties, But Governments Can?

It is commonly accepted in the debt collection industry that a collector cannot, under any circumstances, disclose a debt to a third party. But for government entities, that restriction is not followed. A recent case in Pennsylvania highlighted the pass some groups are given on disclosure.

A newspaper in Harrisburg, Pa., The Patriot-News, requested a list of delinquent sewage accounts from Lemoyne Borough, a small town near Harrisburg. The intent was to publish the list.

Attorneys for the borough pushed back on the request, going so far as to note that third party disclosure is forbidden under the FDCPA. But the paper argued that the list was public record and that it had a right to access the names under the state’s Right to Know Law.

Pennsylvania’s Office of Open Records sided with the paper late last week and ordered the borough to release the list. Lemoyne Borough could still appeal the decision to a county court.

Public shaming is a common practice among state and local governments. Many produce and publish lists of those that owe for services or fees and fines. But this case is one of the few that actually points out the discrepancy between behavior allowed by governments and private businesses, namely debt collection agencies.

So absolute is the third party disclosure provision of the FDCPA, it has given rise to Foti issues, where the requirement to identify as a collector collides with prohibitions on third party disclosure.

It will be interesting to see if the borough appeals and what a judge has to say on the matter. For the time being, the town has 30 days to comply with the order to release the list.