“Affirmed – Defaulted Debt Buyer Not Subject to FDCPA”
In his first opinion, Justice Gorsuch yesterday delivered the Supreme Court’s unanimous decision in Henson v. Santander Consumer USA Inc., No. 16-349. Resolving a circuit split, the Supreme Court ruled that the purchaser of a portfolio of consumer debts, including accounts in default, which thereafter engages in collection activity on the delinquent accounts, is not a “debt collector” as defined by the Fair Debt Collection Practices Act (the “FDCPA”).
This Stroock Special Bulletin provides a brief overview of the Supreme Court’s opinion in Henson, in which Santander purchased a portfolio of automobile loans from CitiFinancial Auto, which included defaulted loans. Santander thereafter began to collect on the loans. Henson, along with three other consumers who also had defaulted on their loans prior to Santander’s purchase, sued Santander for alleged violations of the FDCPA.