Over the last week the United States Supreme Court tackled critical issues dividing our Courts of Appeal over the meaning and scope of the Fair Debt Collection Practices Act (“FDCPA”).
On January 13, the Court granted certiorari in a case out of the 4th Circuit Court of Appeals that dismissed a case against Santander. Santander was sued for a violation of the FDCPA in connection with the bank’s efforts to collect car loan deficiency claims (based upon notes) that Santander purchased from another lender. The 4th Circuit ruled that the claims at issue were Santander’s claims since the claims were bought by Santander and, therefore, Santander was not a “debt collector” under the FDCPA which regulates the debt collection industry when a debt collector seeks to collect a debt from a consumer owed to third party. On January 17, the Supreme Court heard oral argument in another FDCPA case involving the question of whether a creditor could be sued under the FDCPA for filing a time-barred claim (after the statute of limitations expired) against a consumer. The decision of the Court on both of these cases will undoubtedly serve as a framework for future claims under the FDCPA.