U.S. Supreme Court to Hear Santander Debt Collection Case

As many consumers in the Oak Park area know, the Fair Debt Collection Practices Act (FDCPA) is designed to protect debtors against unfair, abusive, and fraudulent debt collection practices. When debt collectors violate the law, consumers who have been harmed may be able to file a claim against the debt collection company. As a recent article in Reuters points out, companies that buy old debt, typically for “pennies on the dollar,” often attempt to collect those debts from consumers even if the statute of limitations has run out. Now, as the article points out, a proposed class action lawsuit against Santander Consumer USA, Inc. will now be heard by the U.S. Supreme Court.
The case asks the question of when a debt buyer will be considered a debt collector for the purposes of federal law.
Are Debt Buyers Considered to be “Debt Collectors” Under the Fair Debt Collection Practices Act?
The case, Henson v. Santander Consumer USA, Inc., addresses the issue of “whether a company that regularly attempts to collect debts it purchased after the debts had fallen into default is a ‘debt collector’ subject to the Fair Debt Collection Practices Act,” according to ScotusBlog.com.
What are the facts of the case? Four residents of Maryland defaulted on their car loans. Those unpaid debts eventually were sold to Santander Consumer USA, Inc. As the Reuters article clarifies, Santander is a “Dallas-based vehicle-financing and lending company.” The Dallas-based company is a subsidiary of Banco Santander. After Santander Consumer USA, Inc. acquired the debts, it attempted to collect on the defaulted car loans. In 2012, the Maryland residents filed a lawsuit against Santander, arguing that the company’s attempts to collect on the unpaid car loans violated the FDCPA.
The plaintiffs contended that Santander is a “debt collector,” and thus should be subject to the FDCPA. However, the U.S. Court of Appeals for the 4th Circuit did not agree. Once the case reached the appeals court last March, the court ruled that the FDCPA is only applicable to debt collectors, and when Santander bought the debt, the court determined that Santander actually had become a “creditor.” Creditors, unlike debt collectors, are not subject to the FDCPA. The plaintiffs appealed, and the U.S. Supreme Court has agreed to hear the case.
Supreme Court’s Decision Could Significantly Impact Debtors Across the Country
The Supreme Court’s decision will be a significant one, the article emphasizes, since courts across the nation currently are divided on the issue of whether debt buyers are defined as “debt collectors” or “creditors.” Santander argues that it should be considered a creditor since it is a full-service consumer bank, which is “less likely to commit abuses than debt collection companies because of their standing in the community.”
The Supreme Court’s decision, whether it finds Santander and other full-service banks that buy debt to be considered “debt collectors” or “creditors,” will be binding upon courts in Illinois and across the country. As such, consumer protection attorneys are keeping a close watch on this case.
Contact a Consumer Protection Lawyer in Oak Park
If you have questions about a debt collector’s practices, or if you believe a debt collector may have violated the FDCPA, an experienced Oak Park consumer protection attorney can assist you. Contact the Emerson Law Firm today for more information.
See Related Blog Posts:
Renewed Look Into Student Loans and Personal Bankruptcy

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