Supreme Court rules on legal definition of debt collectors

Supreme Court rules on legal definition of debt collectors

The US Supreme Court [official website] ruled unanimously [opinion, PDF] in Monday Henson v. Santander Consumer USA, Inc [docket] that a company may collect debts that it purchased for its own account without triggering the statutory definition of “debt collector” provided under the Fair Debt Collection Practices Act (FDCPA) [text]. The FDCPA defines debt collectors as “any person who regularly collects … debts owed or due … another.” Petitioners argued that if Congress intended to exempt debt owners such as Santander it would have used the present partciple “owing.” Justice Neil Gorsuch [official profile], writing his first opinion for the court, opined that this argument “does not follow as a matter of good grammar, let alone ordinary meaning.” Relying on Justice Antonin Scalia [official profile], he also disagreed with petitioner’s policy arguments stating, “it is not this court’s role to rewrite a constitutionally valid statutory text based on speculation about how Congress might have intended to address the … purchasing [of] defaulted debt.” In its ruling, Santander Consumer USA, and toher companies, are free to employ their own tactics to collect on debts bought.

The US Supreme Court granted certiorari [JURIST report] in the case in mid-January. In this case the company [JURIST report] was not providing a collection services to lenders, but collecting on debts they purchased. The case was appealed from a decision [opinion, PDF] by the US Court of Appeals for the Fourth Circuit [official website].