Hiring Third Party Collectors Provides No Insulation
A debtor filed a putative class action against a company that buys overdue debt and outsources its debt collection. The lead plaintiff was called at her home by a company that did not identify itself as a debt collector and sent a collection letter without properly describing her rights to dispute the debt, both Fair Debt Collection Practices Act (FDCPA) violations. The Third Circuit held the debt buyer is covered by the FDCPA because debt collection is the principal purpose of its business regardless of who actually does the collections. The plaintiffs successfully argued if free from FDCPA application, debt buyers could hire the most unscrupulous and aggressive debt collectors they could find without any repercussions.