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Financial Services Law Insights and Observations

Special Alert: Supreme Court Holds that a Person May Collect Defaulted Debts Purchased for Its Own Account Without Triggering the FDCPA

Courts Special Alerts FDCPA Debt Collection


On June 12, the United States Supreme Court issued a ruling in Henson v. Santander Consumer USA Inc., affirming the Fourth Circuit’s holding that the Fair Debt Collection Practices Act’s (“FDCPA” or the “Act”) definition of the term “debt collector” does not necessarily apply to a company collecting debts in default that it purchased for its own account.

The Henson Case
The FDCPA defines the term “debt collector” as those who regularly seek to collect debts “owed…another.” Like the Fourth Circuit, the Supreme Court reasoned that the FDCPA’s definition focuses attention on “third party collection agents working for a debt owner — not on a debt owner seeking to collect debts for itself” and thus, in the context of the facts presented, the purchaser of the debts at issue did not qualify as a debt collector under the FDCPA.

Click here to read full special alert.

If you have questions about the ruling or other related issues, visit our Debt Collection & Buying practice page for more information, or contact a Buckley Sandler attorney with whom you have worked in the past.