Volume 25

An Argument for Regulating Debt Buyers Under the Fair Debt Collection Practices Act

by Rachel Deitch

This Note builds upon existing literature describing the debt buying industry1 by discussing the Supreme Court’s Henson decision, and advocating for legislation that will require debt buyers to comply with the FDCPA. Part I discusses Congress’ goals in passing the FDCPA and provides an overview of the statute’s provisions. Part II looks at the emergence of debt buying after the passage of the FDCPA. This section includes a description of the debt buying industry, and an overview of a typical debt sale. Part III describes the Supreme Court’s Henson decision, which held that the debt buyer Santander was not subject to the restrictions in the statute. Part IV argues that Congress should amend the FDCPA to cover debt buyers in order to protect consumers. Part V analyzes why Congressional action to amend the FDCPA is beneficial. Specifically, class action lawsuits brought under the FDCPA could help deter unethical behavior across the debt buying industry. Part VI provides proposed language that Congress could use when amending the statute. Part VII describes why alternatives to amending the FDCPA are inadequate to protect consumers. Alternatives include litigation under common law, lawsuits alleging violations of state statutes, industry self-regulation, and federal agency enforcement under unfair and deceptive practices statutes. These alternatives do not provide the same protections as the FDCPA and have either limited remedies or limited resources for enforcement.

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1. See e.g. FED. TRADE COMMN, THE STRUCTURE AND PRACTICES OF THE DEBT BUYING INDUSTRY i (2013); Dalié Jiménez, Dirty Debts Sold Dirt Cheap, 52 HARV. J. ON LEGIS. 41, 42 (2015).