Lenders and their attorneys generally recognize that lenders who are engaged in collecting their own loans are not “debt collectors” under the Federal Debt Collection Practices Act (“FDCPA”). Debtors and their attorneys sometimes wish it were otherwise, and will sometimes attempt to achieve their wishes through litigation. The federal 11th Circuit Court of Appeals recently shut down another such attempt in Davidson v. Capital One Bank (USA), N.A.. In that case, Capitol One had purchased a large credit card portfolio, which included some accounts (like Davidson’s) which were already delinquent. When Capitol One then attempted to collect on Davidson’s delinquent account in state court, Davidson sued in federal court in an attempted class action claiming that, despite FDCPA’s contrary language, Capitol One was a “debt collector” under the statute and had violated the statute’s debtor protections in its collection efforts. Davidson’s theory was that, since the account was not originated by Capitol One and was delinquent when it was purchased, Capitol One should be subjected to the statute’s requirements. Noting that the statutory text “is entirely transparent,” the court rejected this argument and held that when FDCPA limits the definition of “debt collector” to those persons who regularly collect debts due “another,” it means what it says. The fact that Capitol One did not originate the debt and the fact that the account was in default when purchased do not have any bearing on the analysis.
