Ninth Circuit considers when debt collector enforcing a security interest is subject to FDCPA.

In Mashiri v. Epstein Grinnell & Howell, the Ninth Circuit reversed the district court’s dismissal for failure to state a cause of action under the Fair Debt Collection Practices Act (FDCPA). On appeal, Defendants argued for the first time they were merely enforcing a security interest and subject to only §1692f(6). The court rejected Defendants’ argument that it was enforcing a security interest. The court stated, “Rather than seeking to enforce an existing security interest or lien, the May Notice sought to collect Mashiri’s overdue assessment fee and to make necessary disclosures that would perfect the HOA’s security interest and permit it to record a lien at a later date.” The court also found the defendants’ interpretation of §1692a(6) incorrect. “As we recently observed “[i]f entities that enforce security interests engage in activities that constitute debt collection, they are debt collectors."

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