What Are The Different Types Of Debt Collectors Under FDCPA?
What Are The Different Types Of Debt Collectors Under FDCPA?
When you’re dealing with debt collectors, the question does cross our minds about who qualifies as a debt collector under the FDCPA.
Let’s talk about this.
What is a debt collector?
The term “Debt Collector” under the Fair Debt Collection Practices Act (FDCPA) means a company that received a debt after the debt was in default.
Let’s talk a little bit about this and give some examples.
A company receives a debt when it buys the debt or is assigned the debt and the debt was in default.
Default is key in figuring out who a debt collector is
What we are looking at is whether the debt was in “default” at the time the company received the debt.
So, what does default mean?
The simple answer is in a consumer does not pay the debt on time, the debt is in default.
The more precise answer is you have to look at the contract.
Most, if not all, contracts spell out in detail what is considered to be a “default” by the borrower.
Normally this includes failing to make a payment on time.
It may also include not keeping insurance on your house or car.
It may include moving without telling the creditor.
There are many possibilities but the point is to look at the contract.
In the final analysis, we simply look at see if one of those conditions of default was met before the new company received the debt.
If so, then the new company is very likely a debt collector.
Examples of different types of debt collectors
A collection lawyer receives a past due account from Capital One.
The collection lawyer is a debt collector as this is the business the lawyer is in and the debt is in default.
A collection agency, say AmSher in Birmingham, Alabama, receives an account from a local bank.
The account is 4 months past due. AmSher is a debt collector as this is its business and the account is in default.
How about a debt buyer — such as Midland Funding — that buys up old credit card debt?
The business is collecting past due debts and it buys up old debts. So Midland Funding is a debt collector.
Final example is of a mortgage company.
Say Nationstar gets your account and you are supposedly 7 days past due on your bill — its due on the 1st and Nationstar gets the account on the 8th.
Nationstar is certainly in the business of collecting on debt and the account is past due.
That means, per the terms of most mortgage notes, that the account is in default.
So Nationstar is a debt collector.
If you have questions feel free to contact us and we’ll help you sort this out
If you have questions and you live in Alabama, feel free to call us at 205-879-2447, fill out our contact form.
We can help you figure out if you are dealing with a debt collector — and if you are, we can help you figure out if that debt collector is breaking the law.
Talk soon!
John,
It was great talking to you last week. You were a tremendous help and have a phenomenal understanding of the law. Thanks, again.
Tom
You too Tom — I’ve been buried in federal court this past week but in the office Monday as my court cases got settled. Let’s talk tomorrow and I’ll get you those samples — sorry for the delay!
John Watts