In Tepper v. Amos Financial, LLC, No. 17-2851 (3d Cir. August 7, 2018), the court distinguished the Supreme Court’s restrictive decision in Henson v. Santander Consumer USA, Inc., and held that the defendant, a company whose principal business is the acquisition and collection of debts is a “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”), even though the debt it was collecting was its own, i.e. not collected for the benefit of a third party.
In Henson, the court had focused on the FDCPA’s third-party debt collection language to hold that the defendant was not a “debt collector” even though it purchased the debt it was collecting after it went into default, as Santander indisputably was not principally in the business of collecting debts.
Amos is a scratch and dent mortgage buyer; the decision applies squarely to similarly situated companies and to entities like Midland Funding, LVNV Funding, Portfolio Management and other mainstream debt buyers as well.
The Second Circuit has not yet addressed whether the FDCPA applies to debt buyers.