Law Firms Engaging in Non-Judicial Foreclosure Are Not “Debt-Collectors” Under FDCPA

  • Written by Steve M. Herman & Nicholas E. Brandfon for The National Law Review

On March 20, 2019, the Supreme Court of the United States ruled in the case of Obduskey v. McCarthy & Holthus LLP No. 17-1307 that a law firm conducting non-judicial foreclosure proceedings is not a “debt collector” under the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq. (“FDCPA”), other than for a limited purpose.

The FDCPA regulates the conduct of “debt collectors”.  Among other things, it (a) restricts false, deceptive or misleading means in connection with the collection of any debt, (b) prohibits conduct that is harassing, oppressing or abusive in connection with the collection of a debt, (c) requires that if a consumer disputes the amount of a debt, a debt collector must cease collection until it obtains verification of the debt and mails a copy to the debtor, and (d) prohibits certain unfair practices.

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