Supreme Court Says, Banks Not Considered Debt Collector Under the FDCPA

bank as debt collector FDCPAThe Supreme Court has issued a long-awaited opinion addressing what type of company qualifies as a “debt collector” under the Fair Debt Collection Practices Act (FDCPA). The high court held that a bank who collects debts that it owns, even though the bank purchased the debts after they went into default, does not qualify as a debt collector.

The case, Henson v. Santander Bank, was filed by a consumer against Santander Bank after it allegedly failed to comply with the requirements of the FDCPA.

But the Supreme Court accepted Santander’s argument that because it was a creditor who purchased the account, it therefore did not qualify as a debt collector. Debt collectors are generally considered companies who purchase defaulted debts in order to collect on them.

But the court left open the issue of whether a so-called debt buyer qualifies as a debt collector. Unlike banks such as Santander who also engage in other business like lending and handling bank accounts, debt buyers are a type of debt collector whose primary business is collection of defaulted debts.

Thus, although the decision is likely to be litigated, debt buyers like Midland Funding, LVNV Funding, Unifund, CACH, and Cavalry SPV, are likely to continue to be considered “debt buyers” under the FDCPA.

The case is here: Henson v. Santander

Culik Law is a Massachusetts consumer protection law firm. Our attorneys handle cases for consumers against debt collectors and debt buyers, as well as debt-collection lawsuits they file against consumers. If you think you might have a legal issue with a debt collector, contact us to see if we can help.



CULIK LAW represents consumers dealing with debt, debt collectors, debt collection lawsuits, credit card debt, harassing debt collection calls, credit reporting errors related to debt, violations of the Fair Debt Collection Practices Act, and protections under Massachusetts laws. We offer a debt consultation so you can tell us about your debt, your concerns, and your goals. We can offer strategies and options that will best fit your needs and to manage or eliminate your debt.