Reygadas v. DNF Associates, LLC

DNF Associates is a debt collection company that makes its profits by buying defaulted consumer debts from creditors and then hiring third-party contractors to contact consumers to collect those debts.  DNF bought a disputed debt purportedly owed by Stephanie Reygadas and sued her over that debt in Arkansas state court. Ms. Reygadas hired a lawyer, who successfully got that case dismissed. DNF then hired another company, Radius Global Solutions, to contact Ms. Reygadas in an attempt to collect on the same disputed debt. Although DNF gave Radius Ms. Reygadas’s contact information, it did not inform Radius that Ms. Reygadas was represented by a lawyer. Radius contacted Ms. Reygadas directly. The Fair Debt Collection Practices Act and the Arkansas Fair Debt Collection Practices Act, however, both prohibit debt collectors from contacting consumers represented by counsel.

Ms. Reygadas sued DNF under both statutes, and the district court ruled in her favor. DNF then appealed to the Eighth Circuit, arguing that the statutory definition of “debt collector” applies only to entities that directly interact with consumers and that it cannot be held liable for Radius’s contact with Ms. Reygadas.

Public Citizen represented Ms. Reygadas  on appeal. Agreeing with the argument in our brief, the Eighth Circuit held that DNF was a debt collector based on its “principal purpose” of debt collection. The court remanded to the district court, however, for further proceedings on the question whether Radius was acting as DNF’s agent.