Bank Not a Debt Collector Under the FDCPA, Says Supreme Court

Banks not Debt Collector under FDCPAThe Supreme Court has issued a long-awaited opinion addressing what type of company qualifies as a “debt collector” under the Fair Debt Collection Practices Act (FDCPA). The high court held that a bank who collects debts that it owns, even though the bank purchased the debts after they went into default, does not qualify as a debt collector.

The case, Henson v. Santander Bank, was filed by a consumer against Santander Bank after it allegedly failed to comply with the requirements of the FDCPA.

But the Supreme Court accepted Santander’s argument that because it was a creditor who purchased the account, it therefore did not qualify as a debt collector. Debt collectors are generally considered companies who purchase defaulted debts in order to collect on them.

But the court left open the issue of whether a so-called debt buyer qualifies as a debt collector. Unlike banks such as Santander who also engage in other business like lending and handling bank accounts, debt buyers are a type of debt collector whose primary business is collection of defaulted debts.

Thus, although the decision is likely to be litigated, debt buyers like Midland Funding, LVNV Funding, Unifund, CACH, and Cavalry SPV, are likely to continue to be considered “debt buyers” under the FDCPA.

The case is here: Henson v. Santander

Culik Law is a Massachusetts consumer protection law firm. Our attorneys handle cases for consumers against debt collectors and debt buyers, as well as debt-collection lawsuits they file against consumers. If you think you might have a legal issue with a debt collector, contact us to see if we can help.

Josef Culik

Josef Culik

Attorney Joe Culik has built his reputation on helping people and has dedicated his practice in Boston, Massachusetts to consumer protection, employee rights, and individual personal injury.

He has advocated for individuals against some of the largest companies in America and has a passion for helping people uphold their rights against impossible odds. He has filed both individual and class-action lawsuits against most of the major banks, against some of the biggest debt collectors and credit reporting agencies, as well as insurance companies and corporate employers. Contact Joe