James Tepper v. Amos Financial LLC
898 F.3d 364
3rd Cir.2018Background
- Tepper spouses had a home-equity line with NOVA Bank; the FDIC became receiver after the bank closed and later sold the defaulted loan to Amos Financial, LLC.
- Amos is an Illinois LLC whose sole business is buying charged-off debts and attempting collection; it was not registered to do business in Pennsylvania when it sued to foreclose.
- Amos sent collection letters (including a foreclosure notice) and an officer and counsel made collection statements; Tepper requested statements and was rebuffed.
- Tepper sued, alleging Amos violated the Fair Debt Collection Practices Act (FDCPA); Amos initially did not dispute it was a "debt collector."
- After the Supreme Court decided Henson, the District Court revisited whether Amos is a "debt collector" under the FDCPA and held Amos qualifies under the statute’s "principal purpose" definition and violated several FDCPA provisions.
- The Third Circuit affirmed that an entity whose principal business is collecting debts it purchased is a "debt collector" under § 1692a(6), regardless of whether it owns the debts it collects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Amos is a "debt collector" under the FDCPA’s "principal purpose" prong | Amos is a debt collector because its principal business is collecting debts it purchased | Amos contends it is a "creditor" (to whom the debt is owed) and thus not a debt collector; alternatively, statutory exclusions apply | Held: Amos is a debt collector under the "principal purpose" definition because it uses the mails/commerce in a business whose principal purpose is collection of any debts |
| Whether Henson’s rejection of the "default" test affects the "principal purpose" analysis | Tepper: Henson supports focusing on statutory text, not default status; principal-purpose applies regardless of when debt was acquired | Amos urged that ownership of the debt (creditor status) excludes it from being a debt collector | Held: Henson eliminates reliance on default-status for defining "debt collector"; plain text controls—ownership does not exempt an entity whose principal purpose is collecting debts |
| Applicability of the FDCPA exclusion for officers/employees of a creditor | Tepper: exclusion does not apply because the defendant sued is the LLC buyer/collector | Amos: alternatively argued it fell within the officer/employee exclusion | Held: Exclusion in §1692a(6)(A) did not apply because Amos itself, not its officers, was the defendant |
| Whether Amos’s conduct violated FDCPA provisions (e.g., misleading statements, improper amount calculation, foreclosure threats) | Tepper: Amos made false/misleading representations and used deceptive means to collect | Amos: disputed factual assertions/reasonableness of collection efforts | Held: District Court findings that Amos violated §§1692e(2), (10) and related provisions were affirmed (Amos liable; damages and fees awarded) |
Key Cases Cited
- Kaymark v. Bank of Am., N.A., 783 F.3d 168 (3d Cir. 2015) (FDCPA is remedial and aims to eliminate abusive debt-collection practices)
- Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000) (prior Third Circuit test treated assignees of defaulted debts as debt collectors)
- Check Investors, Inc. v. Fed. Trade Comm’n, 502 F.3d 159 (3d Cir. 2007) (applied Pollice; considered creditor vs. debt-collector distinction for assignees)
- Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017) (Supreme Court limited the "regularly collects ... for another" definition to collectors acting for third parties and rejected reliance on default-status for that prong)
- Bank of N.Y. Mellon Trust Co. N.A. v. Henderson, 862 F.3d 29 (D.C. Cir. 2017) (applied Henson to hold a bank that purchased and collected loans was not a debt collector under the "regularly collects" prong)