QUESTION:
With all the news about debt collection practices, it would be good to know just what a debt collector does. So, what is a “debt collector?”
ANSWER:
The term “debt collector” largely defines what types of entities are subject to the provisions of the Fair Debt Collection Practices Act (FDCPA). The definition of “debt collector” includes two general parts: 1) affirmative inclusions of persons covered by the definition and 2) the express exclusions of persons from the definition. This can be somewhat confusing, so let’s clarify further.
The following outline provides the affirmative inclusions of persons in the definition of “debt collector,” given three basic prongs of the definition. In this answer, I am only going to treat the inclusions, not the exclusions.
As defined under the FDCPA, the term “debt collector” is:
- Any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts;
- Any person who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another; or
- Notwithstanding the exclusion provided in the FDCPA § 1692a(6)(F) (viz., which is the section that excludes from being a “debt collector” any persons collecting on an obligation they originated or obtained while not in default), any creditors who, in the process of collecting their own debts, uses any name other than their own that would indicate that a third person is collecting or attempting to collect such debts.[15 USC § 1692A(6)]
The section I have referred to above - 15 USC § 1692A(6) – also includes a special definition of “debt collector” solely for the purpose of the section in the FDCPA that involves unfair practices [(§ 1692f(6)]. This special definition covers “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.”
Jonathan Foxx
Managing Director
Lenders Compliance Group
