Under the Fair Debt Collection Practices Act, debt collectors may be limited in what they can say or do to collect their debt. However, a new opinion recently issued by the U.S. Court of Appeals for the 11th Circuit may provide more guidance into what a debt collector actually is. In the case involving Capital One Bank, the plaintiff asked that Capital One be considered a debt collector as it had purchased $1 billion in credit card debt that was in default from HSBC.
However, the court agreed with a state court's finding that Capital One could not be considered a debt collector merely because it engaged in collection activities. This is because the law says that the difference between a debt collector and a creditor depends on a company's principal business activity. In this case, debt collecting was only a part of as opposed to the principal activity of the bank.
The court also ruled that Capital One could not be labeled as a debt collector because it was not pursuing debts owed to another party. This ruling differs from other recent rulings regarding the FDCPA by the 6th and 7th Circuits. Legal scholars believe it may provide insight into future cases involving debt collection practices.
Those who are facing overwhelming debt may be getting harassing calls from debt collectors. Debtors who are subjected to potentially illegal activity may wish to talk to an attorney. It may be possible to take legal action against the debt collector, which may result in a debtor winning financial compensation. Another option may be to file for bankruptcy, which would result in an automatic stay from creditor contact. This stay may be provided whether an individual files for Chapter 7 or Chapter 13 bankruptcy.
Source: National Law Review, "Eleventh Circuit Examines 'Debt Collector" Under the FDCPA", Jennifer Collins, Aug. 28, 2015