In the United States, if a debtor is in default, is it considered libel if the creditor publishes the fact that the debtor is delinquent?

My understanding is that normally truth is a perfect defense to a charge of libel in the United States, but I wondering if this is still true if a creditor sets out to deliberately damage the reputation of a debtor over an unpaid debt.

For example, let's imagine person A borrows $50,000 from person B and agrees to pay it back with interest in 1 years time. The year elapses without the debt being paid. Can person B publish these facts in a newspaper ad without being guilty of libel?

  • Even if it's not libel, it could still be a violation of some privacy law. – Nate Eldredge Sep 14 '18 at 0:20
  • If this were done on a massive scale for many different creditors by a third party, the person doing it would still be acting lawfully but would be subject to credit reporting agency regulations. Otherwise, as the answers point out, it is perfectly legal. – ohwilleke Sep 14 '18 at 6:43

B would not commit libel by publishing that ad.

Throughout the United States, truth is at the least a defense to libel. If the statement in question is false, the speaker's intent is relevant. If the statement in question is true, the speaker's intent is not relevant.

Nor would the statement constitute a privacy violation. The relevant tort would be public disclosure of private facts, but that deals with information whose disclosure would be "highly offensive to the reasonable person." So unless the creditor also disclosed that the debt was for something incredibly private ("A owes me $50,000 for" HIV treatment, fetish fulfillment, etc.), I can't see any way to hold him liable.

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    If B is a bank or similar financial institution, there could be privacy regulations that forbid them from publishing this info, and they could be fined by the government. – Nate Eldredge Sep 14 '18 at 0:51
  • That's definitely an issue on the creditor's side. GLB is probably the operative law, but I don't think it provides remedies the consumer a cause of action, at least not when the information is accurate. – bdb484 Sep 14 '18 at 0:58

Is publication of an unpaid debt considered to be libelous? Can person B publish these facts in a newspaper ad without being guilty of libel?

The disclosure of person A's delinquency is indistinguishable from a disclosure that a party has breached a contract of which the underlying good (or service) provided is different than money (or the lending thereof).

As long as the disclosure by person B is truthful and not prohibited by contract between the parties, the publication is not actionable.

Moreover, person B could argue a social or moral obligation to alert others about person A's insolvency or evasion.

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Truth is a defense but a person does not owe money where they have disputed the debt - saying they do would not be true.

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