Who is a debt collector?
The FDCPA applies only to a "debt collector": a company whose principal business is collecting debts, or anyone who regularly collects debts owed to someone else. Collection agencies and most collection law firms qualify. A bank collecting its own debt in its own name usually does not, unless it pretends to be a third party. Debt buyers depend on their business. When the FDCPA does not apply, the TCPA, the FCRA, Florida's FCCPA or New York's GBL 349 may.
Every FDCPA case starts with the same question: is the company a debt collector? If it is not, the FDCPA does not apply, no matter how badly it behaved. The answer turns on the definition in 15 U.S.C. § 1692a(6), two Supreme Court decisions, and a list of exclusions. This page goes through them in the order a court would.
The definition
A "debt collector" is any person who uses the mail or any instrumentality of interstate commerce in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another (15 U.S.C. § 1692a(6)). That gives two separate tests:
- The principal-purpose test. A business whose main purpose is collecting debts is a debt collector, whoever owns the debts.
- The regularly-collects test. Anyone who regularly collects debts owed to someone else is a debt collector, even if collection is not its main business.
A company that meets either test is covered. The debt must also be a consumer debt, incurred primarily for personal, family or household purposes (§ 1692a(5)).
Creditors, and the false-name exception
A "creditor" is the person who offered or extended the credit, or to whom the debt is owed (§ 1692a(4)). A creditor collecting its own debts is not collecting a debt owed to another, and its employees collecting in the creditor's name are excluded (§ 1692a(6)(A)). There is one important exception in the text: the term includes any creditor who, in collecting its own debts, uses any name other than its own which would indicate that a third person is collecting. A bank that sends letters under an invented "recovery bureau" name to scare you is treated as a debt collector.
The creditor definition also closes a loophole the other way: a company that takes an assignment of a defaulted debt solely to collect it for someone else is not a creditor (§ 1692a(4)).
Debt buyers
A debt buyer is a company that buys accounts, usually after the original creditor has charged them off, and then collects them or has others collect them. In Henson v. Santander Consumer USA Inc., 582 U.S. 79 (2017), the Supreme Court held that a company collecting debts it purchased for its own account does not collect debts "owed another" under the second test. The Court did not decide whether such a company meets the first test. A debt buyer whose principal business is the collection of debts is a debt collector under the principal-purpose test, so in practice the question is what the buyer mainly does.
New York's DFS rule treats debt buyers as covered, alongside third-party collectors, according to the Department (23 NYCRR 1). New York City's rules expressly include "a buyer of debts who seeks to collect on such debts either directly or indirectly" (6 RCNY 5-76, as amended). If a debt buyer has sued you, see sued by a debt collector: do not ignore the papers, because the answer deadline is short.
Collection law firms
In Heintz v. Jenkins, 514 U.S. 291 (1995), the Supreme Court held that the FDCPA applies to attorneys who regularly engage in consumer debt collection, including through litigation. A firm that files collection lawsuits on consumer debts, sends demand letters for banks and debt buyers, or calls consumers about their accounts is usually a debt collector. That matters in court: a false statement in a collection complaint, a suit filed in the wrong county (§ 1692i), or a suit on a time-barred debt (12 C.F.R. § 1006.26(b)) can support FDCPA counterclaims or a separate suit.
Who is excluded
Section 1692a(6) lists people who are not debt collectors, even if they otherwise fit:
| Exclusion | Section |
|---|---|
| A creditor's officers and employees collecting in the creditor's name | § 1692a(6)(A) |
| Affiliated companies collecting only for related companies, if collection is not their principal business | § 1692a(6)(B) |
| Federal and state officers performing official duties | § 1692a(6)(C) |
| Process servers serving legal process | § 1692a(6)(D) |
| Nonprofit credit counseling organizations helping consumers | § 1692a(6)(E) |
| Debts incidental to a fiduciary obligation or escrow; debts the person originated; debts not in default when obtained; secured commercial credit | § 1692a(6)(F) |
The "not in default when obtained" exclusion is the one that most often matters. A loan servicer that took over an account while it was current is usually outside the FDCPA for that account. A company that acquired it after default is not excluded on that ground.
When the FDCPA does not apply
A company outside the FDCPA can still be liable under other laws:
- The TCPA. Applies to anyone who calls your cell phone with a prerecorded voice or autodialer without consent, creditors included (47 U.S.C. § 227(b)(1)(A)(iii)). See the TCPA.
- The FCRA. Applies to any furnisher, including the original creditor, that fails to investigate a dispute forwarded by a credit bureau (15 U.S.C. § 1681s-2(b)). See the FCRA.
- Florida's FCCPA. Its prohibited practices apply to "a person" collecting a consumer debt, which includes the original creditor (Fla. Stat. § 559.72). See Florida.
- New York law. GBL § 349 reaches deceptive practices by any business; GBL § 601 applies to principal creditors and their agents, though it is enforced by the Attorney General and district attorneys. See New York.
In New Jersey, consumers rely mainly on the federal laws; see New Jersey. Merchant cash advances and other business debts are outside the FDCPA; our firm handles those at mcabulldog.com.
Common questions
The company says it bought my debt. Is it a debt collector?
It depends on its business. Under Henson v. Santander, buying a debt and collecting it for yourself does not make you a debt collector under the 'owed to another' part of the definition. But a company whose principal business is the collection of debts is a debt collector under the other part, whether it owns the debts or not. What the buyer mainly does decides it.
Is a law firm that sued me a debt collector?
It can be. The Supreme Court held in Heintz v. Jenkins that the FDCPA applies to lawyers who regularly collect consumer debts, including through litigation. A firm whose practice is filing collection suits on consumer debts will usually qualify.
My bank's collection department calls me. Does the FDCPA apply?
Usually not, because a creditor collecting its own debt in its own name is excluded. It does apply if the bank uses a name that suggests a third party is collecting. And other laws may apply to the bank directly: the TCPA for robocalls, Florida's FCCPA, and New York's GBL 349.
Does the FDCPA apply to a mortgage servicer?
The definition excludes a person collecting a debt that was not in default when the person obtained it. A servicer that took over the loan before default is usually outside the FDCPA for that loan; one that took it over after default may be covered. The facts of the transfer decide it.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.