On June 12, 2017, the Supreme Court found in Henson et al. v. Santander Consumer USA Inc. that the provisions of the Fair Debt Collection Practices Act (FDCPA)—an Act that protects consumers by requiring debt collectors to observe certain collection rules—doesn’t apply to the actions of a debt owner.
The Court explained that the FDCPA defines a “debt collector” as an entity that collects debt on behalf of a third-party debt owner. A debt collector doesn’t collect debts that it owns itself.
By contrast, the litigant was a debt buyer who had purchased the debt in question before engaging in collection efforts (and arguably ran afoul of the FDCPA while doing so). The Court found that because the debt buyer litigant owned the debt, the FDCPA didn’t apply.
Readers should note that it might be premature to conclude that the FDCPA will never apply to a debt buyer in any circumstance. It would be prudent for a debt buyer in need of collection guidance to consult with a knowledgeable attorney.
For more details, read Supreme Court Finds the Fair Debt Collection Practices Act Doesn’t Apply to a Debt Owner.
Effective date: June 12, 2017