On Monday, June 12, 2017, the U.S. Supreme Court ruled in a unanimous decision to affirm the Fourth Circuit’s ruling in favor of Santander Consumer USA Inc., holding that a company that has purchased debts and then attempts to collect on those debts for its own account is not a “debt collector” subject to the Fair Debt Collection Practices Act (FDCPA).
At issue in the case was whether the FDCPA, a 1977 law that is the main federal vehicle for regulating the debt collection industry, applies to companies that purchase consumer debt, a practice that grew in popularity only after the FDCPA was enacted. Those companies, like Santander, then attempt to collect on the purchased debt for their own account. The Supreme Court held that such companies are not “debt collectors” regulated by the relevant provision of the FDCPA, which was enacted largely to regulate third-party debt collectors.
Writing for the unanimous Court in his first Supreme Court opinion, Justice Neil Gorsuch concluded that, under the “plain terms” of the statutory text, a debt owner seeking to collect debts for itself is not seeking to collect debts “owed . . . another,” as is necessary to qualify as a “debt collector” under the relevant statutory definition.
The team representing Santander included Kannon Shanmugam, Allison Jones Rushing, Masha Hansford, and Meng Jia Yang.
Please click here to read a copy of the decision.