On Jan. 19, a federal court in Pennsylvania dismissed a complaint against a debt buyer which alleged violations of the federal Fair Debt Collection Practices Act stemming from an alleged failure to be licensed under the Pennsylvania Consumer Discount Company Act.
The decision found that “purchasing a debt” of the kind and type at issue here (a Capital One credit card account) does fall within the purview of the CDCA.
However, although the debt buyer did not have a CDCA license, it did hold a license issued by the Pennsylvania Department of Banking to collect interest on motor vehicle loans. That license is all it took to escape the CDCA because, according to the decision, a section of the CDCA explicitly exempts entities that hold licenses issued by the Department of Banking.
The decision highlights the difficulties asset purchasers face in determining whether licensure is needed to collect purchased debt in a particular state. There are some steps your company can take to address these licensing issues. On Monday, Jan. 25, join me and my partner, Eric Rosenkoetter, during an ACA International webinar as we discuss this decision and others like it and provide strategies for tackling licensing today. Click here to register.