District Court (Cal.) Says FDCPA Has No “Holding Out” Theory: A Debt Collector Must Be A Debt Collector

In Gonzalez v. Sallie Mae Bank, No. 18cv2457, 2019 U.S. Dist. LEXIS 157007, at *3-5 (S.D. Cal. Sep. 12, 2019), Judge Burns held that a debt collector must meet the definition of a debt collector under the FDCPA, not just “hold out” inferences that it might be one.

SMB points out that it is a lender, not a debt collector for purposes of the FDCPA. The complaint agrees that SMB was the lender on the obligation at issue here. It does not allege that SMB’s principal business is the collection of debts, nor that it regularly collects or attempts to collect debts owed to others. See 15 U.S.C. § 1692a(6) (defining “debt collector”). Gonzalez argues that SMB holds itself out as a debt collector, and i permitted to amend could allege facts showing that. In support of this, he cites an email dated March 8, 2018. (See Decl. of Robert Waller, Ex. 3.) Even if a lende could become a debt collector for FDCPA purposes by holding itself out as one this email does not do that. Instead, it merely references the loan, which it says is delinquent. A warning below the signature line says “This is an attempt to collec a debt and information obtained will be used for that purpose,” but does no mention the FDCPA. Bearing in mind that SMB might be treated as a debt collecto under some laws, a generic warning is perhaps not surprising.  Because the FDCPA‘s definition of “debt collector” does not include a “holding out” theory under which an entity that is not otherwise a debt collector could become one merely by holding itself out as one. See O’Connor v. Wells Fargo, N.A., 2014 U.S. Dist. LEXIS 136451, 2014 WL 4802994, at *3 (N.D. Cal., Sept. 26, 2014) (holding that even if defendant had held itself out as a debt collector, it was not a debt collector within the definition of the FDCPA); Hernandez v. Green Tree Servicing LLC, 2014 U.S. Dist. LEXIS 79848, 2014 WL 2586932 at *3 (C.D. Cal., June 9, 2014) (“[W]hether Green Tree is a debt collector under the FDCPA does not turn on whether Green Tree holds itself out as a debt collector.”) Even where FDCPA-specific warnings or disclaimers have been given, courts have not treated them as giving rise to an inference that the sender is a debt collector for FDCPA purposes. See Amelina v. Mfrs. & Traders Trust Co., 2016 U.S. Dist. LEXIS 96106, 2016 WL 3982483, at *11 (S.D. Cal., July 21, 2016) (surveying cases). In other words, even if SMB had held itself out as a debt collector, that alone would not mean it was one for purposes of the FDCPA. And even more so, generic warnings about debt collection that are identical or similar to the one Gonzalez points to have been held insufficient  to give rise to an inference that the sender was a debt collector under the FDCPA. See O’Connor v. Wells Fargo, N.A., 2014 U.S. Dist. LEXIS 136451, 2014 WL 4802994, at *4 (N.D. Cal., Sept. 26, 2014); Akil v. Carrington Mortg. Servs., LLC, 2013 U.S. Dist. LEXIS 100113, 2013 WL 3779292, at *2 (E.D. Cal., July 17, 2013).