September 16, 2015

Authors: T. Daniel BrannanMichael N. White and Thomas A. Simpson 

In a recent decision significant to Georgia financial institutions that acquire defaulted debt, the federal Eleventh Circuit Court of Appeals held, in Davidson v. Capital One Bank (USA), that Capital One did not qualify as a “debt collector” under the federal Fair Debt Collection Practices Act (the “FDCPA”). In 2012, Capital One acquired a portfolio of current and defaulted credit card debt from HSBC Bank Nevada, N.A., including plaintiff’s account, which was in default at the time it was acquired by Capital One.  After Capital One acquired plaintiff’s account, Capital One filed suit in state court to collect the full amount of plaintiff’s original debt to HSBC.  The plaintiff sued Capital One in federal district court, alleging that Capital One violated the FDCPA by, among other things, falsely stating the amount of plaintiff’s debt.  Capital One moved to dismiss plaintiff’s lawsuit on the basis that the FDCPA did not apply, since Capital One was not a “debt collector.”  The district court agreed with Capital One and dismissed plaintiff’s complaint for failure to state a claim.  Plaintiff appealed to the Eleventh Circuit, which affirmed the district court’s dismissal.

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