On June 12, the U.S. Supreme Court, in a unanimous decision, held that individuals and entities who regularly purchase debts originated by someone else, and then seek to collect those debts for their own accounts, are not “debt collectors” subject to the Fair Debt Collection Practices Act (FDCPA). Henson v. Santander Consumer USA Inc., __ S. Ct. __, 2017 WL 2507342 (June 12, 2017). In doing so, the court resolved a conflict between the United States Court of Appeals for the Fourth and Eleventh Circuits, which held that such purchases of debt are not debt collectors, and the Third and Seventh Circuits, which held that they are.
The court focused on the plain language of the FDCPA, which defined debt collectors to include those who regularly seek to collect debts “owed … another,” stating, “by its plain terms this language seems to focus our attention on third-party collection agents working for a debt owner—not on a debt owner seeking to collect debts for itself. Neither does this language appear to suggest that we should care how a debt owner came to be a debt owner—whether the owner originated the debt or came by it only through a later purchase. All that matters is whether the target of the lawsuit regularly seeks to collect debts for its own account or does so for ‘another.’”
