Monday, February 25, 2019

debt collection - "debt collector" includes entity that hires another to do the collecting

Barbato v. Greystone Alliance LLC – 3d Cir. – February 22, 2019

The Fair Debt Collection Practices Act protects consumers from abusive, deceptive, or otherwise unfair debt collection practices. 15 U.S.C. § 1692(a).   It applies to “debt collectors,” defined alternatively as those engaged “in any business the principal purpose of which is the collection of any debts” and those “who regularly collect[]” debts “owed or due another.” Id. § 1692a(6).   

Held:  The term “debt collector” includes an entity that acquires a debt for the “purpose of . . . collection” but outsources the actual collection activity qualifies as a “debt collector.”   An entity that otherwise meets the “principal purpose” definition cannot avoid the dictates of the FDCPA merely by hiring a third party to do its collecting.