The US Supreme Court issued an important decision involving creditors and the FDCPA on June 12. In Ricky Henson v Santander Consumer USA, Inc., Justice Gorsuch authored a unanimous ruling to the effect that a creditor that owns and attempts to collect consumer debt is not covered by the FDCPA.
The FDCPA prescribe the conduct of ‘collectors’, which are usually defined as a third party that is collecting a consumer debt for another person or entity. Many courts have broadly construed the law to include debt buyers. In Henson, the U.S. Supreme Court rejected this view.
The Court stated: “A company may collect debts that it purchased for its own account… without triggering the statutory definition…)”. In other words, if a bank (like Santander)/credit union, etc. purchases then attempts to collect consumer debts, it is not a ‘collector’ and therefore not covered by the FDCPA.
If your company is a creditor that either originates consumer debt or acquires debt then attempts to collect it, Henson should provide you with some relief.
If you have any questions or want to make sure your company remains compliant, feel free to contact Hiday & Ricke today at 904-363-2769.