Til (Defaulted) Debt do us Part: The Need for Regulation of Debt Buyers Collecting on Delinquent Debt in the Aftermath of Henson v. Santander

In the recent U.S. Supreme Court decision in Henson v. Santander, the Court found that diversified debt buyers are not bound by the Fair Debt Collection Practices Act (“FDCPA”) when collecting on purchased delinquent debt. This decision effectively allows debt buyers to use abusive and deceptive practices to collect debt, and it puts them at a competitive advantage over third-party collection agencies which are bound by the FDCPA. In light of this decision’s implications, there is a great need for federal regulations to treat debt buyers the same way current regulations treat third-party collection agencies in order to protect consumers and level the debt collection playing field. The debt collection regulations that are currently in place do not adequately reflect the changes that have occurred within the industry over the past few decades, with evolution of debt buying as a primary example. The continued growth in the debt collection industry and the ongoing issues posed by the abusive communication tactics used to collect delinquent debt make regulation of debt buyers that much more important.