Court Opinion

ID: 3188185
Source: CourtListenerOpinion
Date Created: 2016-03-23 19:03:54.398503+00
Date Added: 2024-06-11T14:28:43.365472
License: Public Domain

PUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 15-1187

RICKY HENSON; IAN MATTHEW GLOVER; KAREN PACOULOUTE, f/k/a
Karen Welcome Kuteyi; PAULETTE HOUSE,

                 Plaintiffs - Appellants,

           v.

SANTANDER CONSUMER USA, INC.,

                 Defendant - Appellee,

           and

COMMERCIAL RECOVERY SYSTEMS, INC.; NCB MANAGEMENT SERVICES,
INCORPORATED,

                 Defendants.

-------------------------

AARP; NATIONAL CONSUMER LAW CENTER; NATIONAL ASSOCIATION OF
CONSUMER ADVOCATES; CIVIL JUSTICE, INC.; PUBLIC JUSTICE
CENTER, INC.; MARYLAND CONSUMER RIGHTS COALITION, INC.;
ATTORNEY GENERAL OF MARYLAND,

                 Amici Supporting Appellants.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Richard D. Bennett, District Judge.
(1:12-cv-03519-RDB)

Argued:   December 9, 2015                   Decided:   March 23, 2016

Before NIEMEYER, DUNCAN, and AGEE, Circuit Judges.
Affirmed by published opinion.        Judge Niemeyer    wrote   the
opinion, in which Judge Duncan and Judge Agee joined.

ARGUED:   Cory Lev Zajdel, Z LAW, LLC, Reisterstown, Maryland,
for Appellants.   Kim M. Watterson, REED SMITH LLP, Pittsburgh,
Pennsylvania, for Appellee.     ON BRIEF:     Travis Sabalewski,
Robert Luck Jr., Richmond, Virginia, Richard L. Heppner, REED
SMITH LLP, Pittsburgh, Pennsylvania, for Appellee.          Julie
Nepveu, AARP FOUNDATION LITIGATION, Washington, D.C., for Amicus
AARP. Joseph S. Mack, Catherine Gonzalez, CIVIL JUSTICE, INC.,
Baltimore, Maryland; Brian E. Frosh, Attorney General, OFFICE OF
THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Amici
Attorney General of Maryland, Civil Justice, Inc., Maryland
Consumer   Rights  Coalition,  Inc.,  National   Association   of
Consumer Advocates, National Consumer Law Center and Public
Justice Center, Inc.

                                2
NIEMEYER, Circuit Judge:

       Four    Maryland       consumers           commenced         this       action       against

Santander Consumer USA, Inc., and its agents, alleging that the

defendants         violated    the        Fair    Debt     Collection           Practices      Act

(“FDCPA”), 15 U.S.C. §§ 1692-1692p, by engaging in prohibited

collection         practices        when      collecting            on        the     plaintiffs’

automobile         loans.           The     loans         were      originally          made     by

CitiFinancial Auto, and, after the plaintiffs were unable to

make    payments,      CitiFinancial             Auto     foreclosed           on     the   loans,

leaving       the      plaintiffs           obligated          to        pay        deficiencies.

CitiFinancial Auto then sold the defaulted loans to Santander as

part    of    an    investment       bundle          of   receivables,          and     Santander

thereafter attempted to collect on the loans it had purchased.

       The district court granted Santander’s motion to dismiss

the claims         against    it    under        Federal       Rule      of    Civil    Procedure

12(b)(6) on the ground that the complaint did not allege facts

showing that Santander qualified as a “debt collector” subject

to     the    FDCPA.          The    court        concluded           that      the     complaint

demonstrated that Santander was a consumer finance company that

was collecting debts on its own behalf as a creditor and that

the FDCPA generally does not regulate creditors collecting on

debt owed to themselves.

       We    affirm.        While    the     FDCPA        is   a    somewhat         complex    and

technical regulation of debt collector practices, we conclude

                                                 3
that it generally does not regulate creditors when they collect

debt on their own account and that, on the facts alleged by the

plaintiffs, Santander became a creditor when it purchased the

loans before engaging in the challenged practices.

                                         I

       Ricky Henson, Ian Glover, Karen Pacouloute, and Paulette

House, Maryland consumers who are the plaintiffs in this action,

each     signed    a    retail     installment        sales        contract    with

CitiFinancial Auto Credit, Inc., CitiFinancial Auto Corp., or

CitiFinancial Auto, LTD (collectively, “CitiFinancial Auto”) to

finance the purchase of an automobile.               When the plaintiffs were

unable    to   make    the   payments    required     by     the   contracts       and

thereby defaulted, CitiFinancial Auto repossessed and sold their

vehicles and subsequently informed each plaintiff that he or she

owed a deficiency balance.

       On December 1, 2011, CitiFinancial Auto sold $3.55 billion

in loan receivables, including the plaintiffs’ defaulted loans,

to Santander, a consumer finance company.               The plaintiffs allege

that, as part of its business, Santander “acquires defaulted

consumer debt . . . for a few cents on the dollar.”

       Thereafter,     Santander   and       its   agents,    presumably      in   an

effort to collect more than the few cents on the dollar that it

paid     for   defaulted     loans,     “began     communicating       with    [the

                                         4
plaintiffs]         . . .     in    an       attempt          to    collect          on   the   alleged

debts.”         And     during          the        course          of   those         communications,

Santander and its agents allegedly misrepresented the amount of

the debt and their entitlement to collect it.

       The     plaintiffs          commenced         this          action       in    November       2012

against Santander and its agents, alleging that they violated

the FDCPA in pursuing the debts and in the manner they pursued

them.     In their complaint, they proposed to represent a class of

certain debtors “who were subjected to debt collection efforts

by Santander Consumer USA, Inc. on or after December 1, 2011,”

the    date    on     which      Santander           purchased            the    receivables          from

CitiFinancial Auto.

       Santander filed a motion to dismiss the complaint against

it under Federal Rule of Civil Procedure 12(b)(6) on the ground

that    the     complaint’s             allegations            did      not      demonstrate          that

Santander      qualified         as      a    “debt       collector,”            as       necessary    to

trigger       liability       under          the    FDCPA,          and    the       district      court

granted       the    motion        by    order       dated          May     6,       2014.      In    its

supporting opinion, the court noted that the FDCPA applies to

“debt collectors,” as that term is defined in the Act, but not

to    “creditors      collecting             debts       in   their       own    names       and     whose

primary      business       is     not       debt    collection.”                In       reaching     its

conclusion, the court rejected the plaintiffs’ argument that,

because the plaintiffs’ loans were in default when Santander

                                                     5
acquired them from CitiFinancial Auto, Santander qualified as a

debt collector under the FDCPA, rather than as a creditor.

     The    plaintiffs       filed    this      appeal,       presenting       the    single

issue of whether, as necessary to state an FDCPA claim, their

complaint    adequately        alleged     that       Santander    was     acting      as    a

“debt     collector,”     as     that      term       is     defined     in    15     U.S.C.

§ 1692a(6),        when   it    engaged         in     the     collection        practices

challenged in the suit.

                                           II

     In    their     brief     on    appeal,         the    plaintiffs        state    their

position    that     Santander       was   a    “debt        collector,”       subject      to

regulation by the FDCPA, based on the following reasoning:

        The terms “debt collector” and “creditor” are mutually
        exclusive under the FDCPA. An entity can be either a
        “debt collector” or a “creditor” in any particular
        transaction.   The determining factor of whether an
        entity is a “debt collector” or “creditor” in any
        particular transaction when the entity in question is
        not the originating lender is whether the debt was
        acquired prior to default or after default.       Since
        Santander acquired [the plaintiffs’] debts from the
        original lender well after each [plaintiff] defaulted
        on their debt, Santander’s collection activities on
        these defaulted debts make[] it a “debt collector.”

(Emphasis added).         To make their argument, the plaintiffs rely

on their interpretations of 15 U.S.C. §§ 1692a(4) and 1692a(6),

which     define    “creditor”       and    “debt          collector,”    respectively.

Their argument rests on the premise that the FDCPA regulates

debt collectors, not creditors, and that the two terms, as used

                                            6
in the Act, are mutually exclusive.                        See Bridge v. Ocwen Fed.

Bank, FSB, 681 F.3d 355, 359 (6th Cir. 2012); FTC v. Check

Investors, Inc., 502 F.3d 159, 173 (3d Cir. 2007).                                  Thus, they

reason,      because     §    1692a(4)       excludes       from   the        definition     of

creditor       “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,”

such   person     must       of    logical     necessity      be     a   debt       collector.

Because Santander fits, as they argue, the exclusion from the

definition       of    “creditor,”           it    must     therefore          be    a    “debt

collector.”      They claim that this conclusion is fortified by one

of the exclusions to the definition of “debt collector.”                                 See 15

U.S.C. § 1692a(6)(F)(iii) (excluding from the definition of debt

collector “any person collecting or attempting to collect any

debt . . . owed or due another to the extent such activity . . .

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

obtained” (emphasis added).                  At bottom, they maintain that the

default status of debt determines whether a purchaser of debt,

such as Santander, is a debt collector or a creditor.

       The     plaintiffs’          argument,        however,        contains            several

interpretational             and     logical         flaws,        such        that        their

interpretation of the FDCPA ultimately stands in tension with

its    plain    language.           When     arguing       from    the        definition      of

creditor, they overlook the fact that the exclusion applies only

                                               7
to a person who receives defaulted debt “solely for the purpose

of    facilitating     collection          .    .     .    for    another.”            15     U.S.C.

§ 1692a(4)     (emphasis       added).               Similarly,         in    relying       on    the

exclusion in § 1692a(6)(F)(iii), they fail to address whether

Santander fits under any definition of “debt collector” before

addressing whether the (F)(iii) exclusion applies.

       We   conclude    that        the    default         status       of    a   debt      has    no

bearing on whether a person qualifies as a debt collector under

the    threshold    definition        set       forth      in     15    U.S.C.    §     1692a(6).

That    determination     is        ordinarily            based    on    whether        a     person

collects debt on behalf of others or for its own account, the

main    exception      being        when       the     “principal            purpose”       of    the

person’s business is to collect debt.

       We begin our explanation by noting at a general level that

the    FDCPA   purports        to     regulate            only    the        conduct     of      debt

collectors, not creditors, generally distinguishing between the

two based on whether the person acts in an agency relationship

with the person to whom the borrower is indebted.                                 With limited

exceptions, a debt collector thus collects debt on behalf of a

creditor.      A creditor, on the other hand, is a person to whom

the debt is owed, and when a creditor collects its debt for its

own account, it is not generally acting as a debt collector.

       The FDCPA’s definitions of debt collector and creditor bear

out this distinction.

                                                8
      The definition of debt collector, which is contained in

§ 1692a(6), is comprised of two parts.                        The first part defines

the classes of persons that are included within the term “debt

collector,”      while    the    second       part      defines      those        classes   of

persons that are excluded from the definition of debt collector.

The first part, defining those who are included, provides in

relevant part:

      The term “debt collector” means any person [1] 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 [2] 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 [3] 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.

15 U.S.C. § 1692a(6) (emphasis added).                    Stated more simply, this

provision       defines   a     debt       collector     as    (1)      a       person    whose

principal       purpose   is     to    collect       debts;       (2)       a    person     who

regularly collects debts owed to another; or (3) a person who

collects its own debts, using a name other than its own as if it

were a debt collector.

      The   second    part      of     §    1692a(6)     defines        the       classes   of

persons that are excluded from the definition of debt collector,

so   that   a    person   who    meets       one   of    the    definitions          of    debt

collector contained in the first part of § 1692a(6) will not

                                              9
qualify as such if it falls within one of the exclusions.                                 As

relevant     here,     exclusion     (F)(iii)       provides      that      “[t]he   term

[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).               To simplify, this

exclusion means that a person collecting nondefaulted debts on

behalf of others is not a debt collector.                        This exclusion was

intended by Congress to protect those entities that function as

loan servicers for debt not in default.                   See S. Rep. No. 95-382,

at   3-4    (1977),     as   reprinted     in    1977    U.S.C.C.A.N.        1695,   1698

(“[T]he     committee        does   not    intend      the     definition     [of    debt

collector] to cover the activities of . . . mortgage service

companies and others who service outstanding debts for others,

so   long    as   the    debts      were   not    in    default     when     taken    for

servicing” (emphasis added)).

      Thus, the overall structure of § 1692a(6) makes clear that

when assessing whether a person qualifies as a “debt collector,”

we must first determine whether the person satisfies one of the

statutory     definitions        given     in    the    main    text   of    § 1692a(6)

before considering whether that person falls into one of the

exclusions     contained       in   subsections        § 1692a(6)(A)-(F).            If    a

person does not satisfy one of the definitions in the main text,

                                           10
the exclusions in subsections § 1692a(6)(A)-(F) do not come into

play.     See Davidson v. Capital One Bank (USA), N.A., 797 F.3d

1309, 1314 (11th Cir. 2015) (“[W]here a person does not fall

within    subsection   (F)   or   any   one   of   the   six   statutory

exclusions, he is not deemed a ‘debt collector’ as a matter of

course.    [Instead], . . . he must satisfy the Act’s substantive

requirements”).

     The material distinction between a debt collector and a

creditor -- at least with respect to the second definition of

“debt collector” provided by § 1692a(6) -- is therefore whether

a person’s regular collection activity is only for itself (a

creditor) or whether it regularly collects for others (a debt

collector) -- not, as the plaintiffs urge, whether the debt was

in default when the person acquired it.        See Heintz v. Jenkins,

514 U.S. 291, 293 (1995) (“The Act’s definition of the term

‘debt collector’ includes a person ‘who regularly collects or

attempts to collect, directly or indirectly, debts owed [to]

. . . another’” (alteration in original) (quoting § 1692a(6)));

see also Davidson, 797 F.3d at 1315-16 (“The statutory text is

entirely transparent. . . .       [A] person must regularly collect

or attempt to collect debts for others in order to qualify as a

‘debt collector’ under the second definition of the term”); S.

Rep. No. 95-382, at 3 (“The Committee intends the term ‘debt

collector,’ subject to the exclusions discussed below, to cover

                                   11
all   third    persons     who    regularly          collect      debts      for   others”

(emphasis added)).           But see Bridge, 681 F.3d at 359; Ruth v.

Triumph P’ships, 577 F.3d 790, 796-97 (7th Cir. 2009); Check

Investors, 502 F.3d at 173.

      With    this    interpretation       of    §    1692a(6),        we   turn     to   the

complaint in this case to assess what it states about Santander.

The complaint alleges that the plaintiffs borrowed money from

CitiFinancial Auto to purchase automobiles and that, when the

plaintiffs went into default on the loans, CitiFinancial Auto

repossessed     and    sold    their      automobiles,           leaving      them      owing

deficiency balances.          It also alleges that when the loans were

in default but before December 1, 2011, Santander was “hired

. . . as a servicer to collect” on the loans, presumably on

behalf of CitiFinancial Auto.

      But the very next paragraph of the complaint alleges that

on December 1, 2011, CitiFinancial Auto sold the plaintiffs’

loans   to    Santander.         Only    thereafter,            when   Santander        began

collecting     from    the    plaintiffs         on       the    loans      that   it     had

purchased,     did     Santander        engage       in    the     conduct     that       the

plaintiffs allege was in violation of the FDCPA.                            Specifically,

the complaint alleges that after December 1, 2011, Santander

improperly contacted the borrowers directly, misrepresented the

amounts owed, and misrepresented the fact that Santander was

entitled to collect on the loans.                     Importantly, however, the

                                          12
complaint does not allege that, when Santander engaged in the

allegedly illegal collection practices, it was collecting the

debts on behalf of CitiFinancial Auto.                              Rather, it alleges that

CitiFinancial Auto had sold the loans to Santander, presumably

“for    a   few       cents    on    the       dollar,”        thus    leaving    Santander    to

collect on the debts for its own account.                                And this allegation

is     consistent        with       public       SEC      filings,       which     reveal    that

Santander      purchased            $3.55      billion         in     loan   receivables     from

CitiFinancial           Auto        on    December          1,      2011,    following       which

Santander presumably attempted to obtain a return by collecting

more    than      a    few    cents      on     the      dollar     through     its   collection

efforts.

       Applying         these       allegations           to     the    definition      of    debt

collector in § 1692a(6), it is apparent that Santander does not

fall within the first or third definitions of debt collector.

The complaint does not allege, nor do the plaintiffs argue, that

Santander’s           principal      business         was      to   collect     debt,   alleging

instead     that       Santander         was    a     consumer        finance    company.     The

complaint also does not allege, nor do the plaintiffs contend,

that Santander was using a name other than its own in collecting

the debts.        Thus, to allege that Santander was a debt collector,

the complaint is left to satisfy the second definition of debt

collector -- that Santander regularly collects debts owed to

others and was doing so here.

                                                    13
       Yet, the complaint’s allegations also do not satisfy this

definition because the debts that Santander was collecting were

owed   to   it,    Santander,   not   to   another.     This    is   alleged

specifically      and   unambiguously.      The   complaint    asserts    that

after Santander purchased the plaintiffs’ debts on December 1,

2011 (and became the entity to which the debts were owed), it

engaged in collection efforts that violated the FDCPA.                   Thus,

those collection efforts were pursued for its own account, as

the loans were then owed to it.            Santander was therefore not a

person collecting a debt on behalf of another, so as to qualify

as a debt collector under the second definition, but on behalf

of itself, making it a creditor.

       Because the complaint does not satisfy any definition of

debt collector, the analysis ends, and the exclusions from the

definition of debt collector, on which the plaintiffs rely, have

no significance.

       Nonetheless, the plaintiffs argue that the default status

of a debt is determinative of whether a person who purchased the

debt is a debt collector, pointing to exclusion (F)(iii), which

excludes from the class of persons defined as a debt collector

“any person collecting or attempting to collect any debt 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) (emphasis added).

                                      14
They    argue      that      because          that    provision       excludes      persons

collecting      debts     not       in    default,          the    definition      of    debt

collector    must,      by    a     negative         pregnant,     necessarily      include

persons collecting defaulted debts that they did not originate.

This logic, however, turns the statutory provision upside down,

failing to recognize that the FDCPA defines debt collector by

reference to those who are included in the various classes and

then excludes, among others, the subset of persons who obtain

nondefaulted       debt      to    collect      on     it    for   others.       As      noted

earlier,    this    exclusion           was    included      by    Congress   to    protect

mortgage     service      companies           and     similar      loan   servicers        who

acquire debt not in default and service it for a fee.                                      The

exclusion    thus    does         not    define      “debt    collector,”     but       rather

identifies a class of persons excluded from the definition of

“debt collector.”

       In a similar vein, the plaintiffs argue that the definition

of creditor supports their position that the default status of a

debt defines whether a person attempting to collect that debt is

a debt collector.             In making this argument, they rely on the

exclusion to the definition of creditor but, in doing so, the

plaintiffs again apply the same kind of upside-down logic that

relies on an inaccurate premise and a negative pregnant that

does not follow.

                                               15
       The term “creditor” is defined by the FDCPA as “any person

who offers or extends credit creating a debt or to whom a debt

is owed.”       15 U.S.C. § 1692a(4).               The definition then excludes

“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.”                            Id.     The

plaintiffs argue that Santander fits the creditor exclusion and

therefore must necessarily be a debt collector.

       The logic does not follow, mainly because debt collector is

defined separately and that definition, rather than some implied

definition, is determinative.               But the logic is flawed even more

fundamentally because the premise that Santander satisfies the

exclusion is incorrect.               In arguing that Santander satisfies the

exclusion, the plaintiffs recharacterize the facts they alleged

in     the    complaint,        stating    in    their   brief      that,     “although

Santander currently owns [the plaintiffs’] debts, those debts

were    assigned        to   Santander    after     default   and    solely     for   the

purpose       of      facilitating         collection        of     the     debts     for

CitiFinancial [Auto].”                (Emphasis added).           But the facts that

the plaintiffs presume in their brief are not the facts of their

complaint.         The complaint alleges that CitiFinancial Auto sold

the loans to Santander and that Santander thereafter attempted

to collect on them for its own account.                      Santander was, at the

time     of     its      allegedly        illegal     collection          conduct,    the

                                            16
plaintiffs’ creditor, and nothing in the complaint suggests that

it was acting on behalf of CitiFinancial Auto.                      The complaint

does allege that before CitiFinancial Auto sold the loans to

Santander,     CitiFinancial     Auto       had    “hired”    Santander      as    a

servicer to collect the plaintiffs’ defaulted debt.                        But any

conduct that Santander might have carried out as a debt servicer

on CitiFinancial Auto’s behalf was carried out before the debts

were    sold   to   Santander   and   before      Santander    engaged     in     the

allegedly illegal collection conduct.

       Apart from their argument based on the default status of

debt, the plaintiffs also seek to avoid the interpretation of

“debt     collector”    that    we    make,       arguing    that    the    second

definition of debt collector in § 1692a(6) includes two separate

classes of persons, one of which regularly collects “debts owed

or due” and the other of which regularly collects “debts . . .

asserted to be owed or due another.”               They argue that Santander

fits into the first class of persons, even if it does not fit

into the second, because the word “another” applies only to the

second.    To make this argument, however, the plaintiffs break in

two the singular statutory phrase in § 1692a(6), which defines

debt collector as including any person who “regularly collects

or attempts to collect . . . debts owed or due or asserted to be

owed or due another,” 15 U.S.C. § 1692a(6) (emphasis added),

arguing that the term “another” modifies only the portion of the

                                       17
last phrase, “asserted to be owed or due another.”                                We do not

agree.        While    Congress      did    break     up    the      definition    of    debt

collector in § 1692a(6), defining several distinct classes of

persons who qualify as a debt collector, it did not divide the

“regularly collects” phrase.                As the phrase is written, the word

“another” modifies both “owed or due” and “asserted to be owed

or   due,”     so     that    the    phrase       defines        a    debt   collector     as

including a person who collects debt due another or asserted to

be due another.         Cf. Paroline v. United States, 134 S. Ct. 1710,

1721 (2014) (“When several words are followed by a clause which

is applicable as much to the first and other words as to the

last, the natural construction of the language demands that the

clause be read as applicable to all” (quoting Porto Rico Ry.,

Light & Power Co. v. Mor, 253 U.S. 345, 348 (1920))).

     In       another    attempt       to     avoid        our       interpretation,      the

plaintiffs argue that “debts owed or due another” could refer to

debts that were due another either when they were first incurred

or at the time of the collection activity.                            Thus, according to

the plaintiffs, when Santander collected on the debts that it

had purchased, it could be seen as having acted to collect the

debts    of    another       because   the     loans       were       originally    due    to

CitiFinancial         Auto.         This    argument,        however,        is    no    more

persuasive.         Insofar as Congress was regulating debt-collector

conduct, defining the term “debt collector” to include a person

                                             18
who   regularly   collects     debts     owed      to    another,      it    had   to    be

referring to debts as they existed at the time of the conduct

that is subject to regulation.                See Davidson, 797 F.3d at 1318

(“[O]ur   inquiry   under     § 1692a(6)        is      not   whether       Capital     One

regularly collects on debts originally owed or due another and

now owed to Capital One; our inquiry is whether Capital One

regularly collects on debts owed or due another at the time of

collection”); see also Schlegel v. Wells Fargo Bank, NA, 720

F.3d 1204, 1209 (9th Cir. 2013) (“The statute is not susceptible

to the [plaintiffs’] interpretation that ‘owed or due another’

means ‘originally owed or due another’”).

      Finally, the plaintiffs argue that because Santander had,

before December 1, 2011, been a debt collector with respect to

their loans, it remained a debt collector after it purchased

their loans and thereafter collected on them.                    They suggest that

Santander’s    status    as   a   debt    collector,          generally,       made      it

subject to regulation.        As they summarize:

      In order for this Court to hold that Santander is not
      a “debt collector” with respect to [plaintiffs’]
      defaulted debts, this Court would have to create a
      loophole in the FDCPA that allows an entity acting as
      a “debt collector” while servicing . . . defaulted
      debts to become a “creditor” simply by purchasing the
      defaulted debt it was collecting for another.

Again,    we   reject    this     argument.              Under    the       plaintiffs’

interpretation,     a   company   such        as   Santander      --    which,     as     a

consumer finance company, lends money, services loans, collects

                                         19
debt for itself, collects debt for others, and otherwise engages

in borrowing and investing its capital -- would be subject to

the FDCPA for all of its collection activities simply because

one of its several activities involves the collection of debts

for others.      Congress did not intend this.            Rather, it aimed at

abusive conduct by persons who were acting as debt collectors.

See 15 U.S.C. § 1692(e) (“It is the purpose of this subchapter

to   eliminate       abusive     debt     collection     practices       by      debt

collectors”).       It therefore provided that, barring application

of one of the exclusions, an entity that “collects or attempts

to collect . . . debts owed or due . . . another” on a regular

basis     qualifies    as    a   debt     collector     when    it     engages    in

collection activity on behalf of another.                Id. § 1692a(6).          But

when that same entity acts to collect its own debts, it is

acting     as   a   creditor,       not   a    debt    collector.        See      id.

§§ 1692a(4), 1692a(6).           Santander is therefore subject to the

FDCPA    only   when   acting    as   a   “debt   collector”     as    defined    in

§ 1692a(6).      Were it otherwise, every creditor that collects on

its own loans and that also engages in the business of regularly

collecting debts on behalf of others would be pulled under the

regulation of the FDCPA not just when it collects for others,

but also when it collects for itself.

     At    bottom,     a    valid     claim    under   the     FDCPA    inherently

requires the coming together of all the statutory elements at

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the   time   of    and   in   connection        with   the   prohibited       conduct.

Thus, for     example,    when      a   plaintiff      claims   that    a     defendant

violated § 1692e (prohibiting a “debt collector” from using “any

false, deceptive, or misleading misrepresentation or means in

connection with the collection of any debt”), he must prove that

the defendant was acting as a debt collector, as defined by

§ 1692a(6), when it engaged in misrepresentations in connection

with the collection of debt from the plaintiff.

                                    *      *      *

      Because the complaint failed to allege facts demonstrating

that Santander was acting as a “debt collector,” as defined by

§ 1692a(6),       when   it   was       collecting     on    debts     owed    by   the

plaintiffs, we affirm the judgment of the district court.

                                                                               AFFIRMED

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