No. 14-14200 

______________________________________________ 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT 

______________________________________________ 

Keith Davidson, 

Plaintiff-Appellant, 

v. 

Capital One Bank (USA), N.A., 

Defendant-Appellee, 

______________________________________________ 

On Appeal from the United States District Court 

For the Northern District of Georgia 

No. 1:13-cv-2307 

Hon. William S. Duffy, Jr. 

______________________________________________ 

Amicus Brief of the Federal Trade Commission 

Supporting Rehearing En Banc 

______________________________________________ 

 JONATHAN E. NUECHTERLEIN

 General Counsel 

JOEL MARCUS

 Director of Litigation 

THEODORE (JACK) METZLER

 Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 
No. 14-14200 Davidson v. Capital One Bank (USA), N.A. (11th Cir.) 

- C1 of 1 - 

Eleventh Circuit Rule 26.1 Certificate of Interested Persons 

Burr & Forman LLP 

Capital One Bank (USA), N.A. (COF) 

Charpie, Catherine C., Counsel for Davidson 

Combs, Cathleen M., Counsel for Davidson 

Davidson, Keith, Appellant 

Duffey, Jr., Hon. William S., U.S. District Judge, N.D. Ga. 

Edelman, Combs, Latturner & Goodwin, LLC 

Edelman, Daniel A., Counsel for Davidson 

Federal Trade Commission 

Grey, E. Talley, Counsel for Davidson 

Marcus, Joel, FTC Attorney 

Metzler, Theodore (Jack), FTC Attorney 

Nuechterlein, Jonathan, FTC General Counsel 

Scofield, III, Hon. E. Clayton, U.S. Magistrate Judge, N.D. Ga. 

Threadcraft, Joshua H., Counsel for Capital One 

Ziemann, Jennifer E., Counsel for Capital One 
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Eleventh Circuit Rule 35-5(C) Statement 

I express a belief, based on a reasoned and studied professional judgment, that 

this appeal involves the following question of exceptional importance: 

Whether the panel correctly held, in conflict with every other court of appeals 

that has considered the issue, that a person who regularly acquires debts that 

are in default and attempts to collect on them does not qualify as a “debt 

collector” within the meaning of the Fair Debt Collection Practices Act. 

s/ Theodore (Jack) Metzler 

Theodore(Jack) Metzler 

Attorney of record for the 

 Federal Trade Commission 
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TABLE OF CONTENTS 

Page 

11th Cir. Rule 35-5(c) Statement .............................................................................................. i

Table of Contents ...................................................................................................................... ii

Table of Authorities ................................................................................................................. iii

Statement of Issue Meriting En Banc Consideration .......................................................... v

Interest of Amicus Curiae ........................................................................................................ 1

Statement of the Case ............................................................................................................... 2

A. Statutory Background.................................................................................................... 2

B. Facts & Procedural History .......................................................................................... 4

Reasons for Granting Rehearing En Banc ............................................................................ 5

I.    The Panel Decision Directly Conflicts With The Decisions Of Four 

Other Courts Of Appeals. .............................................................................................. 6

II.    The Panel Misinterpreted The Statute. ......................................................................... 9

III. This Case Presents Issues Of Exceptional Importance Because The 

Panel’s Misinterpretation Will Impair Enforcement Of The FDCPA. ................. 13

Conclusion ................................................................................................................................ 15

Statutory Appendix ................................................................................................................. 1a
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TABLE OF AUTHORITIES 

Cases Page(s)

Bailey v. Sec. Nat’l Servicing Corp., 154 F.3d 384 (7th Cir. 1998) ............................................ 6 

Bridge v. Ocwen Fed. Bank, 681 F.3d 355 (6th Cir. 2012) .................................................. 1, 8 

FTC v. Check Investors, Inc., 502 F.3d 159 (3d Cir. 2007) ................................................. 7, 8 

Hibbs v. Winn, 542 U.S. 88 (2004).......................................................................................... 11 

King v. St. Vincent’s Hospital, 502 U.S. 215, 112 S. Ct. 570 (1991) ..................................... 10 

McKinney v. Cadleway Properties, Inc., 548 F.3d 496 (7th Cir. 2008) .................................. 6, 7 

McMahon v. LVNV Funding, LLC, 744 F.3d 1010 (7th Cir. 2014) .................................... 1 

Perry v. Stewart Title Co., 756 F.2d 1197 (5th Cir. 1985) ........................................................ 8 

Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000) ............................................. 7 

Ruth v. Triumph Partnerships, 577 F.3d 790 (7th Cir. 2009) .............................................. 6, 7 

Schlegel v. Wells Fargo Bank, 720 F.3d 1204 (9th Cir. 2013) .................................................. 6 

Schlosser v. Fairbanks Capital Corp., 323 F.3d 534 (7th Cir. 2003) ........................................ 6 

Wadlington v. Credit Acceptance Corp., 76 F.3d 103 (6th Cir. 1996) ...................................... 11 

Statutes

15 U.S.C. § 1692 ............................................................................................................... 1, 2, 3 

15 U.S.C. § 1692a......................................................................................... 3, 4, 5, 6, 7, 10, 15 

15 U.S.C. § 1692e ...................................................................................................................... 4 

15 U.S.C. § 1692l ....................................................................................................................... 1 

Fed. R. App. P. 35 ................................................................................................................... 13 
- iv - 

Other Authorities

FTC, Collecting Consumer Debts: The Challenges of Change (Feb. 2009) .................... 1 

FTC, Consumer Sentinel Network Databook (Feb. 2015) ............................................... 13 

FTC, FTC Returns Almost $4 Million to Consumers in Debt Collection Scam 

(June 30, 2015) ................................................................................................................... 15 

FTC, Repairing a Broken System: Protecting Consumers in 

Debt Collection Litigation and Arbitration (July 2010) ............................................ 1, 9 

FTC, Report to Consumer Financial Protection Bureau (Feb. 2015) ...................... 13, 15 

FTC, The Structure and Practices of the Debt Buying Industry (Jan. 2013) .............. 1, 9 

Wikipedia, U.S. Courts of Appeals, Circuit Population ...................................................... 13 

 
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STATEMENT OF ISSUE MERITING EN BANC CONSIDERATION 

Whether the panel correctly held, in conflict with every other court of appeals 

that has considered the issue, that a person who regularly acquires debts that are in 

default and attempts to collect on them does not qualify as a “debt collector” within 

the meaning of the Fair Debt Collection Practices Act.
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INTEREST OF AMICUS CURIAE 

The Federal Trade Commission, an agency of the United States, files this brief 

pursuant to Eleventh Circuit Rule 35-6 to urge the Court to review en banc the panel 

decision in this case, which restricts the scope of the Fair Debt Collection Practices 

Act (FDCPA), 15 U.S.C. §§ 1692 et seq. 

Congress has directed the FTC to protect the rights of consumers under the 

FDCPA. 15 U.S.C. § 1692l(a). An FDCPA violation is “deemed an unfair or 

deceptive act or practice in violation of [the FTC] Act,” and the FTC may proceed 

against an FDCPA violator as though it had broken “a Federal Trade Commission 

trade regulation rule.” Id. 

Abusive debt collection practices are a primary focus of the Commission’s 

consumer-protection efforts. The agency has brought many cases enforcing the 

FDCPA and has published several reports on problems in the debt collection 

industry, in particular those associated with debts that are sold to others.1

 Courts 

have relied on the Commission’s perspective on and experience with the FDCPA. 

E.g., Bridge v. Ocwen Fed. Bank, 681 F.3d 355, 361 (6th Cir. 2012); McMahon v. LVNV 

Funding, LLC, 744 F.3d 1010, 1020 (7th Cir. 2014). The Commission is concerned 

that the panel’s decision will remove important protections for consumers in the 

 

1

 See FTC, Repairing a Broken System: Protecting Consumers in Debt Collection 

Litigation and Arbitration (July 2010), http://1.usa.gov/buF50z (“Broken System”); 

FTC, The Structure and Practices of the Debt Buying Industry (Jan. 2013), 

http://1.usa.gov/Z0EjxZ (“Structure & Practices”); FTC, Collecting Consumer 

Debts: The Challenges of Change (Feb. 2009), http://1.usa.gov/3ZLwb. 
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states of this Circuit and may hamper both government and private efforts to combat 

abusive debt-collection practices. 

STATEMENT OF THE CASE 

This case concerns who qualifies as a “debt collector” subject to FDCPA 

requirements vital to protecting consumers from abuse. If a person collecting a debt 

is not a “debt collector,” he is not subject to the statute. The panel held that a company that buys debts that are already in default is not a debt collector. That decision 

squarely conflicts with (and does not acknowledge) the decisions of four other courts 

of appeals—the Third, Fifth, Sixth, and Seventh Circuits—that have directly addressed the same question. No court of appeals before now has reached the panel’s 

conclusion. 

The panel misinterpreted the statute, resulting in a construction of the FDCPA 

that is both under- and overinclusive. It created an irrational loophole in the FDCPA 

that enables unscrupulous debt collectors to avoid its requirements. And it removed 

an important exception to the statute, which ironically extends the FDCPA’s strictures 

to companies that Congress did not intend the statute to cover. 

A. Statutory Background 

The FDCPA is a consumer protection statute passed against the backdrop of 

“abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.” 15 U.S.C. § 1692(a). Congress enacted the FDCPA to 
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(among other things) “eliminate abusive debt collection practices by debt collectors.” 

15 U.S.C. § 1692(e). 

The statute’s definitional section creates two complementary, mutually exclusive 

categories of debt holders: “creditors” and “debt collectors.” Creditors are not 

regulated by the statute, whereas debt collectors are subject to regulation and to both 

private and government lawsuits for violations. Congress defined a “creditor” as “any 

person who offers or extends credit creating a debt or to whom a debt is owed.” 15 

U.S.C. § 1692a(4). It defined a “debt collector” as “any person . . . 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.” 15 U.S.C. § 1692a(6). 

Congress recognized that debts can be bought and sold in the marketplace and 

anticipated that some of those debts might be in default at the time of assignment and 

transfer. It took such transactions into account in defining creditors and debt collectors. Thus, the meaning of “creditor” “does not include any person to the extent that 

he receives an assignment or transfer of a debt in default solely for the purpose of 

facilitating collection of such debt for another.” 15 U.S.C. § 1692a(4). Correspondingly, the meaning of “debt collector” does not include “any person collecting or 

attempting to collect any debt owed or due or asserted to be owed or due another to 

the extent such activity . . . concerns a debt which was not in default at the time it was 

obtained by such person.” 15 U.S.C. § 1692a(6)(F)(iii). As explained below, until the 
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panel decision here, courts have uniformly determined that, with respect to acquired 

debts, those definitions distinguish between creditors and debt collectors based on 

whether the relevant debt was in default when it was transferred. 

B. Facts & Procedural History 

Plaintiff Keith Davidson had a credit card account with HSBC bank. When he 

defaulted on payment, HSBC sued Davidson, and the parties settled the case for $500. 

Slip op. 3. Capital One later acquired Davidson’s account from HSBC and then sued 

Davidson to collect the same account, but this time for $1,114.96 rather than the $500 

Davidson owed under the earlier judgment. Id. at 4. Davidson alleges that Capital 

One violated the FDCPA by (among other things) falsely representing “the character, 

amount, or legal status of any debt.” 15 U.S.C. § 1692e(2)(A). 

The district court dismissed the claim, holding that Capital One is not a “debt 

collector” within the meaning of the FDCPA because it collected only debts owed to 

itself, not “debts owed or due or asserted to be owed or due another” at the time 

Capital One attempted to collect them. Slip op. 5; 15 U.S.C. § 1692a(6). Davidson 

argued on appeal that because Capital One acquired his debt when it was already in 

default, Capital One was a debt collector and not a creditor when it attempted to 

collect the account. 

The panel rejected Davidson’s argument. It examined the definition of “debt 

collector,” with particular emphasis on the phrase that refers to debts “owed or due 

another.” Without addressing the contrary holdings of four other courts of appeals, 
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the panel held that, under this language, “a person must regularly collect or attempt to 

collect debts for others in order to qualify” as a debt collector. Slip op. 13. But because 

“Capital One’s collection efforts in this case relate only to debts owed to it—and not 

to ‘another,’ ” Capital One did not fall within the panel’s interpretation of “debt collector.” Id. at 17. And the panel rejected Davidson’s reliance on 15 U.S.C. 

§ 1692a(6)(F)(iii), which, as noted, exempts persons from the definition of “debt 

collector” to the extent they acquire debts that are not in default at the time of 

acquisition. The exception, the panel held, “cannot . . . bring entities that do not 

otherwise meet the definition of ‘debt collector’ within the ambit of the FDCPA.” 

Slip op. 11-12. 

REASONS FOR GRANTING REHEARING EN BANC 

The question presented here is exceptionally important, and the panel incorrectly decided it in conflict with the decisions of four other courts of appeals. The 

panel’s decision both eliminates critical consumer protection features of the FDCPA 

and, by nullifying a key statutory exception, unwittingly extends the FDCPA’s requirements to businesses that Congress meant to exclude. And the panel decision creates 

these anomalies in a region of the country—the territory covered by this Circuit—that 

is disproportionately subject to abusive debt-collection practices. This case thus 

warrants rehearing en banc. 
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I. THE PANEL DECISION DIRECTLY CONFLICTS WITH THE DECISIONS OF 

FOUR OTHER COURTS OF APPEALS. 

The FDCPA establishes complementary and mutually exclusive definitions of 

“creditor” (15 U.S.C. § 1692a(4)) and “debt collector” (15 U.S.C. § 1692a(6)). All 

courts of appeals that have previously addressed these definitions—the Third, Fifth, 

Sixth, and Seventh Circuits—have held that, with respect to debts transferred from 

one person to another, the acquirer is a “creditor” if the debt is not in default at the 

time of transfer and a “debt collector” if the debt is in default. No other court of 

appeals that has directly addressed the issue has come to a different conclusion.2

For example, the Seventh Circuit has rejected the argument—identical to the 

panel’s holding here—that a party is “a creditor and not a debt collector [if] it 

purchases delinquent debt thereby becoming one ‘to whom a debt is owed.’ ” Ruth v. 

Triumph Partnerships, 577 F.3d 790, 796 (7th Cir. 2009). The court held instead that 

when “the party seeking to collect a debt did not originate it but instead acquired it 

from another party . . . the party’s status [as a debt collector] under the FDCPA turns 

on whether the debt was in default at the time it was acquired.” Id.; accord McKinney v. 

Cadleway Properties, Inc., 548 F.3d 496, 501 (7th Cir. 2008); Schlosser v. Fairbanks Capital 

Corp., 323 F.3d 534, 536 (7th Cir. 2003); Bailey v. Sec. Nat’l Servicing Corp., 154 F.3d 384, 

387 (7th Cir. 1998). Directly contrary to the panel here, the Seventh Circuit ruled that 

 

2

 Davidson’s petition suggests that the Ninth Circuit’s decision in Schlegel v. Wells Fargo 

Bank, 720 F.3d 1204 (9th Cir. 2013), is consistent with the panel holding, but that case 

did not address the question presented here because it did not involve loans that were 

in default at the time they were acquired. 
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“a party that seeks to collect on a debt that was in default when acquired is a debt 

collector under the FDCPA, ‘even though it owns the debt and is collecting for itself.’ ” Ruth, 

577 F.3d at 797, quoting McKinney, 548 F.3d at 501 (emphasis added). The court 

explained that the statute “excludes from its definition of ‘creditor’ those who acquire 

and seek to collect a ‘debt in default,’ and excludes from its definition of ‘debt 

collector’ those who seek to collect a debt ‘which was not in default at the time it was 

obtained.’ ” Ruth, 377 F.3d at 797, quoting 15 U.S.C. §§ 1692a(4) & 1692a(6)(F) 

(internal citations omitted). Thus, “one who acquires a ‘debt in default’ is 

categorically not a creditor; one who acquires a ‘debt not in default’ is categorically not 

a debt collector.” McKinney, 548 F.3d at 501. 

The Third Circuit likewise differentiates debt collectors from creditors on the 

basis of whether a debt was in default at the time of its transfer. In Pollice v. Nat’l Tax 

Funding, L.P., 225 F.3d 379 (3d Cir. 2000), the Third Circuit held that a company 

became a debt collector when it bought a portfolio of overdue utility bills. The court 

reasoned: “an assignee of an obligation is not a ‘debt collector’ if the obligation is not 

in default at the time of the assignment; conversely, an assignee may be deemed a 

‘debt collector’ if the obligation is already in default when it is assigned.” Id. at 403. 

That determination cannot be squared with the panel’s statutory interpretation. 

The Third Circuit’s separate decision in FTC v. Check Investors, Inc., 502 F.3d 

159, 162-64 (3d Cir. 2007), likewise rested on a rationale directly contrary to the 

panel’s holding. There, the defendant purchased bounced checks and attempted to 
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collect them using means prohibited by the FDCPA. It argued that, having bought 

the bad checks, it collected debts for itself and not for another. The court held that 

even though a debt collector may “actually be owed the debt,” the status of the debt 

at the time of acquisition was dispositive. Id. at 173. The alternative reading (the one 

adopted by the panel here) “would elevate form over substance and weave a technical 

loophole into the fabric of the FDCPA big enough to devour all of the protections 

Congress intended in enacting that legislation.” Id. 

The Sixth Circuit has similarly held that “[t]he distinction between a creditor 

and a debt collector lies precisely in the language of § 1692a(6)(F)(iii).” Bridge, 681 

F.3d at 359. Contrary to the panel’s holding here, the court ruled that “an entity that 

did not originate the debt in question but acquired it and attempts to collect on it . . . 

is either a creditor or a debt collector depending on the default status of the debt at 

the time it was acquired.” Id. at 359. 

Finally, the Fifth Circuit has likewise held that the “assignee of a debt” is not a 

debt collector “as long as the debt was not in default at the time it was assigned.” 

Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985). Like the courts discussed 

above, the court classified a person acquiring a debt as a debt collector or creditor 

depending on whether the debt was in default when assigned, and not (as under the 
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panel decision here) whether the defendant was collecting debts “for” another rather 

than itself (slip op. 13).3

 

II. THE PANEL MISINTERPRETED THE STATUTE. 

The other four circuits correctly decided the issue in this case. A company that 

regularly buys debts owed to others and collects them is a “debt collector” under the 

FDCPA for debts that were in default at the time it acquired those debts, even 

though, in acquiring them outright, the company was collecting them on its own 

behalf rather than “for” another entity with a continuing ownership interest in them. 

In concluding otherwise, the panel erred in three distinct but interrelated ways. 

First, the panel erred in construing the phrase “owed or due another” to mean, 

in effect, “currently owed or due another.” The debts at issue were obviously “owed or 

due another” (the assignor) when they were incurred. Only by implicitly injecting the 

word “currently” into the statute could the panel interpret the phrase “owed or due 

another” to refer to debt collection undertaken “for another.” See slip op. 13. But 

Congress did not include the word “currently” in the definition of debt collector. As 

the panel observed, Congress did not include the word “originally” either, see slip op. 

12-13. But that observation—coupled with the panel’s implicit need to insert its 

 

3

 The FTC also has consistently interpreted the FDCPA to mean that those who 

regularly collect debts that they obtain after the debts are in default are “debt 

collectors” and not “creditors.” Structure & Practices, supra note 1, at 3-4 & nn. 13-14; 

Broken System, supra note 1 at 6 n.15. 
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own temporal adverb —simply shows that the statutory phrase is susceptible to more 

than one interpretation. 

The statutory structure resolves that ambiguity in favor of the majority rule 

adopted by four circuits and against the panel’s interpretation. First, the definition of 

“debt collector” must be read in tandem with the complementary definition of 

“creditor.” King v. St. Vincent’s Hosp., 502 U.S. 215, 221, 112 S. Ct. 570 (1991) (noting 

“the cardinal rule that a statute is to be read as a whole”). As described above, 

“creditor” means a person to whom a debt is owed, but does not mean one who 

acquired a defaulted debt “solely for the purpose of facilitating collection of such debt 

for another.” 15 U.S.C. § 1692a(4). Similarly, “debt collector” means a person who 

collects debts owed or due another, but does not mean a person who collects acquired 

debts that are not in default. The two definitions work together to create complementary and mutually exclusive categories that differ on the basis of the default status 

of a transferred debt. The panel’s reading upends that structure. 

Second, the panel’s interpretation unnecessarily—and thus impermissibly—

drains a portion of the statutory definition of any meaning: the statutory exception 

for debts not in default when acquired. Subparagraph (F)(iii) excepts from the 

definition of “debt collector” any person “[1] attempting to collect any debt owed or 

due or asserted to be owed or due another [2] to the extent such activity . . . concerns 

a debt which was not in default at the time it was obtained by such person.” 15 

U.S.C. § 1692a(6)(F)(iii). The first half of the quoted language exactly replicates the 
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language that appears earlier in the definition of “debt collector.” As noted, the panel 

construed that language to mean attempting “to collect any debt for [i.e., on behalf of] 

others.” See slip op. 13. If that interpretation were correct, subparagraph (F)(iii) 

logically would never apply: a person who has “obtained” a debt and seeks to collect 

on it for itself is by definition not collecting it on behalf of another. The panel’s 

contrary interpretation thus violates the “basic interpretive canon” that “[a] statute 

should be construed so that effect is given to all its provisions, so that no part will be 

inoperative or superfluous, void or insignificant.” Hibbs v. Winn, 542 U.S. 88, 101, 124 

S. Ct. 2276 (2004) (citation omitted). 

Third, for the same reason, the panel’s construction anomalously extends the 

statutory restrictions on “debt collectors” to entities and activities that Congress did 

not wish those restrictions to cover. See slip op. 15 n.8. Congress included the 

subparagraph (F)(iii) exception (which would be nullified by the panel’s approach) 

because it wished to exempt from the statutory requirements those who obtain debts 

that are not in default, such as loan servicers. The exception applies both to persons 

who otherwise qualify as a debt collector under the first statutory definition (for 

companies whose “principal purpose” is debt collection) or the second (the definition 

at issue here, involving those who regularly collect debts “owed or due another”). See 

Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 106-07 (6th Cir. 1996). Because the 

panel’s reading reduces this subparagraph (F)(iii) exception to a nullity, the exception 

can no longer play its designated role. As discussed below, that is a particular 
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problem for companies meeting the first definition: in the Eleventh Circuit such 

companies are now apparently subject to FDCPA restrictions whenever they seek to 

collect “[a]ny debts,” slip op. 15 n.8, even those that were not in default at the time 

they acquired them. That result flouts congressional intent. 

Finally, the panel had no persuasive response to Davidson’s observation that its 

opinion was greatly underinclusive as well, opening a loophole in the statutory 

scheme. Davidson had explained that, under the interpretation adopted by the panel, 

a company could avoid the FDCPA’s debt-collection restrictions simply by 

restructuring its agreements with primary creditors. Specifically, instead of acting as a 

paid collection agent for such creditors, a company could simply buy the same debt 

portfolios outright at risk-adjusted prices. Because such a company will always be 

collecting debts on its own behalf rather than “for” another, such a company is 

automatically and anomalously exempt from “debt collector” status under the second 

(“regularly collects”) definition of debt collector at issue in this case. The panel 

acknowledged that point but stated that such a company might nonetheless be subject 

to regulation under the first (“principal purpose”) definition of “debt collector.” Slip 

op. 15 n.8. But that answer to Davidson’s “loophole” argument is unpersuasive 

because the company in this scenario could escape regulation even under the first 

definition if it runs—or, in light of the panel’s opinion, strategically creates—a 

diversified business that includes commercial activities unrelated to debt collection. 

That outcome would make nonsense of this statutory scheme. 
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III. THIS CASE PRESENTS ISSUES OF EXCEPTIONAL IMPORTANCE BECAUSE 

THE PANEL’S MISINTERPRETATION WILL IMPAIR ENFORCEMENT OF THE 

FDCPA. 

The question presented here is exceptionally important because the panel’s 

decision creates a direct circuit split with four other courts of appeals, see Fed. R. App. 

P. 35(b)(1)(B), because it will deprive consumers of important protections against 

abusive debt collection practices, and because it could hamper the FTC’s efforts to 

enforce the FDCPA. It also sweeps entities that Congress did not intend to be 

considered debt collectors into the statute’s restrictions. 

Debt collection abuse is a serious and growing consumer-protection problem. 

Since January 1, 2010, the FTC has sued more than 180 companies and individuals 

engaged in unlawful collection practices, securing over $220 million in consumer 

redress. FTC, Report to Consumer Financial Protection Bureau at 2 n.3, 

http://1.usa.gov/1QmPjQp (Feb. 2015) (2015 Report). In 2014 alone, the agency 

received more than 280,000 consumer complaints about debt collection—more than 

any other category of fraud and 35 percent more than it received the year before. 

See FTC, Consumer Sentinel Network Databook at 6, 79, http://1.usa.gov/1CrevD9

(Feb. 2015). The problem appears disproportionately acute in the states of this 

Circuit: more than 20 percent of those complaints were received from Alabama, 

Florida, and Georgia even though only 10 percent of the U.S. population lives in those 

states. See id. at 22, 31, 32; Wikipedia, U.S. Courts of Appeals, Circuit Population, 

http://bit.ly/1M99DGI. 
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If permitted to stand, the panel’s decision may exempt a broad swath of debt 

collectors in this Circuit from the consumer protection requirements of the FDCPA. 

For example, mortgage servicers routinely purchase large portfolios of debt from loan 

originators. At the time of purchase, some of the accounts may be current and others 

in default. Such a loan purchaser would not fall within the panel’s interpretation of 

“debt collector,” leaving the FTC impotent to police collection abuses using the 

FDCPA. The FTC has brought at least four such cases,4

 resulting in judgments 

totaling more than $130 million—but under the panel ruling it could not bring such a 

case under the FDCPA in this Circuit. 

Indeed, the panel opinion provides a roadmap for avoiding the strictures of the 

FDCPA in the states of this Circuit. A debt collector that formerly undertook to 

collect defaulted debts for other parties on a contingency basis now only needs to buy 

the debt outright (at a risk-adjusted price). As long as it ensures that debt collection is 

not its principal purpose (which would place it in the first prong of the definition), it 

no longer can be deemed a “debt collector” within the meaning of the statute, at least 

in this Circuit. The FTC could be unable to bring under the FDCPA cases such as 

FTC v. Asset & Capital Management Group, No. 8:13-cv-01107 (S.D. Cal.), which 

involved abusive and deceptive debt collection practices including threats of 

 

4 See FTC v. Green Tree Servicing LLC, No. 0:15-cv-2064 (D. Minn. 2015); FTC v. EMC 

Mortg. Corp., No. 4:08-cv-338 (E.D. Tex. 2008); United States v. Fairbanks Capital Corp., 

No. 1:03-cv-12219 (D. Mass. 2003); FTC v. Capital City Mortg. Corp.; No. 1:98-cv-237 

(D.D.C. 1998). 
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garnishment, property seizure, and arrest. See 2015 Report at 3-4; FTC Press Release, 

FTC Returns Almost $4 Million to Consumers in Debt Collection Scam (June 30, 2015), 

http://1.usa.gov/1RQr255. 

Finally, as noted above, the panel’s interpretation of “debt collector” would 

perversely extend FDCPA restrictions to entities that the statute was not intended to 

cover. Automobile manufacturers, for example, often use financing companies whose 

principal purpose is to service car loans. When the loans are transferred to the 

servicing company, few if any of them are in default. Congress did not intend such 

loan servicers to be covered by the FDCPA. That is why the statute excepts from the 

definition of “debt collector” “any person collecting . . . any debt owed . . . another to 

the extent such activity . . . concerns a debt which was not in default at the time it was 

obtained.” 15 U.S.C. § 1692a(6)(F)(iii). Under the panel’s reading, however, “an 

entity whose ‘principal purpose’ is the collection of ‘any debts,’ ” whether or not in 

default, is a debt collector subject to the statute, and the now-nullified (F)(iii) 

exception can no longer fix the problem. 

CONCLUSION 

The Court should grant appellant’s petition for rehearing en banc and reverse 

the district court’s decision. 

 
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September 21, 2015 

Respectfully submitted, 

s/Theodore (Jack) Metzler 

JONATHAN E. NUECHTERLEIN

General Counsel 

JOEL MARCUS

Director of Litigation 

THEODORE (JACK) METZLER

Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 

tmetzler@ftc.gov 

 
STATUTORY APPENDIX 

15 U.S.C. § 1692a(4): 

(4) The term “creditor” means any person who offers or extends credit 

creating a debt or to whom a debt is owed, but such term does not include 

any person to the extent that he receives an assignment or transfer of a debt 

in default solely for the purpose of facilitating collection of such debt for 

another. 

15 U.S.C. § 1692a(6): 

(6) The term “debt collector” means 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. Notwithstanding the exclusion provided by clause (F) of the 

last sentence of this paragraph, the term includes any creditor who, in the 

process of collecting his own debts, uses any name other than his own 

which would indicate that a third person is collecting or attempting to 

collect such debts. The term does not include— 

* * * 

(F) any person collecting or attempting to collect any debt owed 

or due or asserted to be owed or due another to the extent such 

activity 

(i) is incidental to a bona fide fiduciary obligation or a bona 

fide escrow arrangement; 

(ii) concerns a debt which was originated by such person; 

(iii) concerns a debt which was not in default at the time it 

was obtained by such person; or 

(iv) concerns a debt obtained by such person as a secured 

party in a commercial credit transaction involving the 

creditor. 

* * * 

 
Certificate of Service 

 I hereby certify that on September 21, 2015, I filed the foregoing with the 

Court’s appellate CM-ECF system, and that I caused the foregoing to be served 

through the CM-ECF system on the counsel of record for the plaintiff-appellant and 

the defendant-appellee, who are registered ECF users. 

September 21, 2015 s/Theodore (Jack) Metzler 

Theodore (Jack) Metzler 

 Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 

tmetzler@ftc.gov