Ruling: Outsourcing Does Not Exempt Debt Collectors From Fair Debt Collection Practices Act

Statement of Adam Pulver, Attorney, Public Citizen Litigation Group

Note: In a decision issued on Monday in McAdory v. M.N.S. & Associates, LLC, the U.S. Court of Appeals for the Ninth Circuit overturned a lower court’s ruling and held that debt buyers who use third-party companies to contact consumers can be held liable for violations of the Fair Debt Collection Practices Act (FDCPA) as “debt collectors.” Public Citizen represented Jillian McAdory in the case. 

The Ninth Circuit has joined an increasing number of courts throughout the country in recognizing that a company whose entire business revolves around the collection of consumer debts is a debt collector under the FDCPA – and that they cannot escape liability for violation of the act by hiring others to help with collection.

This decision makes clear that consumers who have been subject to abusive tactics can pursue relief against both contractors who send consumers misleading mail or who lie to consumers about purported debt, and also debt buyers who hire the contractors to contact consumers.

This decision is a victory for consumers.