Henson v. Santander Consumer USA, Inc.

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Questions

1. Is a company that regularly attempts to collect debts it purchased after the debts had fallen into default is a “debt collector” subject to the Fair Debt Collection Practices Act?

Conclusions

1. A party that purchases a debt and attempts to collect the debt for its own account is not a “debt collector” subject to the Fair Debt Collection Practices Act (FDCPA). Justice Neil Gorsuch delivered the opinion for the unanimous Court, which held that the plain text of the FDCPA defined debt collectors as those who collected debts owed to another and therefore focused on debt collection agents collecting on behalf of a debt owner. A debt owner who was collecting debts for his own profit was not subject to the FDCPA. Although the petitioners tried to argue that the statute’s use of the past tense “owed” covered those who were collecting debts that had been previously owned by someone else, as Santander Consumer USA, Inc. (Santander) did, that reading does not comport with the text of the statute. The Court held that it was clear that Congress intended to use “owed” in the present tense in the relevant part of the statute, because elsewhere Congress clearly distinguished between original and current creditors. Because the meaning of the text was plain and there was no evidence that Congress intended an alternate, broader reading, purchasers of debt who collect for their own accounts are not subject to the FDCPA.