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Attorney General Maura Healey joined a multistate amicus brief arguing that debt buyers must also obey the federal fair debt collection law.
“Debt buyers purchasing defaulted consumer debt for pennies on the dollar, only to turn around and pursue consumers using unlawful and harassing collection tactics should be subject not only to state law, but also federal law,” Healey said in a statement. “It is vital that states have all the resources at their disposal to protect consumers from unscrupulous debt collectors.”
The amicus brief, led by the Oregon Attorney General’s Office, supports the petitioners in Henson v. Santander Consumer USA Inc. The brief argues that a company that regularly purchases and collects delinquent debts is a “debt collector” subject to the Fair Debt Collection Practices Act (FDCPA).
The petitioners in that case obtained car loans from CitiFinancial Auto, which repossessed and sold them when they were unable to make payments. CitiFinancial told the petitioners they owed a balance to cover the difference between the agreed purchase price and the amount of money for which CitiFinancial sold the defaulted loans to Santander Consumer.
The petitioners filed a putative class action suit against Santander in November 2012, alleging Santander violated the FDCPA. Santander argued that it was not a debt collector under the law because it bought the debt and did not originate it, and a district court agreed.
According to the amicus brief, debt buyers who purchase defaulted consumer debt are, from a consumer’s perspective, no different from debt collectors who do not own the debt. While debt buyers can and should be able to pursue lawful means of debt collection, the law should protect consumers from abuse and deception by such companies.
Attorneys general involved in today’s amicus brief include Oregon, Alaska, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Minnesota, Montana, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, Vermont, Washington and the District of Columbia.
