The National Consumer Law Center (NCLC) has a useful discussion here on the implications of this week's Supreme Court decision in Henson v. Santander Consumer USA. NCLC's principal point is that Santander leaves open the possibility of proving that a debt buyer is a debt collector under the FDCPA's alternative definition, under which the term includes anyone whose principal business is collection of any debt, regardless of whether the debt is "owed or due another." The Court's decision in Santander was limited to the proposition that a debt buyer is not a debt collector under the prong of the definition applicable to someone who "regularly" collects debts "owed or due another"—because, according to the Court, debt buyers collect debts owed or due themselves.
I would add that Santander would appear to imply that if a debt buyer is a debt collector under the "principal purpose" definition, its collection activities are covered regardless of whether the debts were in default when it bought them. The reason for this conclusion is that the "exception" to the definitions under which it matters whether a debt was in default when it was "obtained" only applies to someone who is attempting to collect a debt that is "owed or due another." Santander's holding is that a debt buyer does not collect debts "owed or due another." Thus, if a person or company qualifies as a debt collector under the principal purpose definition (which doesn't depend on whom a debt is owed or due to), it will never fall within the exception for debts obtained before they went into default when it collects debts it bought, because such collection is of a debt owed or due itself.
Got that? If not, sit down with a copy of Santander, 15 U.S.C. § 1692a(6), and a good, stiff drink. The bottom line is that a lot now rides on whether a debt buyer's principal business is collecting debts.
