The US Supreme Court has unanimously ruled that any entity that purchases a defaulted loan is not considered a debt collector and thereby is not subject to the rules and regulations set in place by the Fair Debt Collection Practices Act.
In the case Henson et al. v. Santander Consumer USA Inc., the petitioners claimed that Santander, who had bought a number of defaulted car loans from CitiFinancial Auto, had to abide by the rules and regulations set out by the FDCPA as debt collectors, not loan originators who were trying to collect a debt for themselves. The petitioners brought their case in front of the Supreme Court in an appeal of the 4th Circuit Court ruling that, ultimately, the Act defines debt collectors as a person or entity that “regularly seek[s] to collect debts ‘owed … to another.’” The court found that, since Santander was seeking to collect the debt they themselves were owed, they were not collecting on behalf of another person or entity.
Thanks to Carolyn Horvath for alerting us to this story.