Sitting in the Southern District of New York, Judge Denise L. Cote ruled on September 1st that an original creditor attempting to collect its own debt is not a debt collector under the meaning of the Fair Debt Collection Practices Act (FDCPA). Under the FDCPA, debt collectors are forbidden from employing a variety of deceptive and unethical practices in order to collect debts. The law does not, however, apply to original creditors.
In the case of Almonte v. Public Storage, Inc., 11-cv-1404, Public Storage placed a lein on the contents of a self-storage unit when monthly rents fell into arrears. Public Storage then reported false information to a third-party debt collection firm called Allied Interstate, and conspired with Allied to report false information about Almonte to credit bureaus. Even still, Judge Cote found Public Storage to be an original creditor under the FDCPA, and ruled that, as an original creditor, the FDCPA did not apply to any of Public Stroage’s debt collection activities in the case.
While the case represents a minor setback for consumers, it has long been settled that the FDCPA does not apply to original creditors. So the decision, while unfortunate, was not unexpected. Moreover, the decision has no bearing on other consumer protection statutes which could have potentially been brought to bear in this case, namely the Fair Credit Billing Act (FCBA) and the Fair Credit Reporting Act (FCRA).
