FDCPA Covered Entities and Exemptions 1 — Questions and Answers
Question 1: Under the FDCPA, a 'debt collector' is defined as a person who regularly collects debts owed to whom?
- Another party — not debts owed to themselves (Correct answer)
- Any person, including original creditors
- Only banks and financial institutions
- Only licensed collection agencies
Correct answer: Another party — not debts owed to themselves
A debt collector is defined as someone who regularly collects debts owed to another — original creditors collecting their own debts are generally excluded.
Question 2: Is a creditor collecting its own debt in its own name covered by the FDCPA?
- Generally no, unless using a different name that suggests a third party is collecting (Correct answer)
- Yes, all creditors are covered regardless of whose debt it is
- No, creditors are completely exempt from the FDCPA
- Yes, if the creditor uses automated collection tools
Correct answer: Generally no, unless using a different name that suggests a third party is collecting
Original creditors collecting under their own name are excluded, but if they use a different name suggesting third-party collection, they may be covered.
Question 3: Which of the following is generally EXEMPT from the FDCPA?
- A federal government employee collecting a debt in the course of official duties (Correct answer)
- A third-party collection agency hired by a bank
- An attorney regularly filing collection lawsuits on behalf of creditors
- A debt buyer who purchased consumer accounts
Correct answer: A federal government employee collecting a debt in the course of official duties
Federal and state government employees collecting debts in their official capacity are expressly exempt from the FDCPA.
Question 4: A company purchases charged-off consumer debts and collects them for its own account. Is it a 'debt collector' under the FDCPA?
- Yes, debt buyers are debt collectors under the FDCPA (Correct answer)
- No, it is a creditor because it owns the debt
- Yes, but only if it uses third-party collectors
- No, charged-off debts are not covered by the FDCPA
Correct answer: Yes, debt buyers are debt collectors under the FDCPA
The Supreme Court (Henson v. Santander) addressed this issue, and most courts and the CFPB treat debt buyers as debt collectors under the FDCPA.
Question 5: Which type of debt is covered by the FDCPA?
- Consumer debts incurred primarily for personal, family, or household purposes (Correct answer)
- All debts including business and commercial obligations
- Only debts secured by real property
- Only credit card debts over $500
Correct answer: Consumer debts incurred primarily for personal, family, or household purposes
The FDCPA applies only to consumer debts — those arising from transactions primarily for personal, family, or household purposes.
Question 6: A plumber claims a homeowner owes $2,000 for repairs. The plumber hires a collection agency. Who is the 'debt collector' under the FDCPA?
- The collection agency, because it collects debts owed to another (Correct answer)
- The plumber, because they originated the debt
- Both the plumber and the collection agency
- Neither, because home repair is not a consumer transaction
Correct answer: The collection agency, because it collects debts owed to another
The collection agency collects the debt on behalf of the plumber (another party) and is therefore the debt collector; the plumber is the creditor.
FDCPA Covered Entities and Exemptions 1
Under the FDCPA, a 'debt collector' is defined as a person who regularly collects debts owed to whom?