March 3, 2015

Tenth Circuit: Attorney Not “Debt Collector” Under Fair Debt Collection Practices Act

The Tenth Circuit Court of Appeals published its opinion in James v. Wadas on Wednesday, July 31, 2013.

George James filed this action against Cheryl Wadas and Wadas Law Office (“Wadas”) and Abby Shadakofsky, d/b/a Personal Collection Service (“Shadakofsky”), asserting violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p. James appealed from the district court’s order granting summary judgment in favor of Wadas on the basis that she is not a “debt collector” within the meaning of the FDCPA.

At issue was the district court’s interpretation of the term “debt collector” under the FDCPA, and its conclusion that Wadas was not a “debt collector” because she did not engage in debt collection “regularly.”

Congress enacted the FDCPA with the express purpose to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). A defendant can be held liable for violating the FDCPA only if she is a “debt collector” within the meaning of the FDCPA. The FDCPA defines the term “debt collector” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” In Heintz v. Jenkins, the Supreme Court determined that attorneys may qualify as “debt collectors” under the FDCPA, holding that the Act applies to “attorneys who ‘regularly’ engage in consumer-debt collection activity, even when that activity consists of litigation.” 514 U.S. 291, 292, 299 (1995).

Based on the evidence, the district court determined that there were “no indicia” that debt collection was either a principal purpose of Wadas’s law practice or that Wadas “regularly” engaged in debt collection. Nor were there any discernible patterns, either through debt collection or litigation, that would support a finding that Wadas engaged in debt collection regularly. The court agreed with the district court’s analysis. The record did not demonstrate that Wadas engaged in debt collection with any sort of regularity.

The Tenth Circuit AFFIRMED.

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