The Court of Appeals for the Sixth Circuit has, for the second time, ruled in favor of a defendant sued for allegedly violating the Fair Debt Collection Practices Act, this time determining that the defendant did not meet the statute’s definition of “debt collector” because the debts were not in default while attempts to collect were being made.
A copy of the ruling in the case of Ward v. NPAS can be accessed by clicking here.
This case has been back and forth between the District Court and the Sixth Circuit twice now, and this is one of those “I’m not a lawyer, but this seems cut-and-dried to me so why are we still talking about this” type of cases. The crux of the case boiled down to the agreement that a healthcare provider had with the defendant, which provided extended business office for medical account billing and servicing. The agreement included a clause that stated “[d]uring the time that the medical account is being serviced by the EBO Servicer, the account shall not be considered delinquent, past due or in default.” This language was also included in the agreement signed by the plaintiff when he received his treatment at the healthcare provider. As anyone who has studied the FDCPA knows, the statute excludes debts that were not in default at the time they were obtained. Now, neither the FDCPA nor the Sixth Circuit has a definition for “default,” but if the accounts were not delinquent, past due, or in default while in the defendant’s possession, that should be the ballgame.
Not quite, the Sixth Circuit said. The account could have been in default before it was handed over to the defendant — the provider did send two letters to try and collect on two separate debts. But despite the plaintiff’s attempts to convince the panel that the debt was in default prior to being handed over to the defendant, the Court determined there was “nothing in the record to suggest that Stonecrest considered Ward’s account to be in default before it referred it to NPAS. We have held that a ‘debt collector’ is one who ‘either acquired a debt in default or has treated the debt as if it were in default at the time of acquisition.’”’ Here, no one — neither Stonecrest, nor NPAS — treated Ward’s debt as if it were in default at that time. We agree with the district court that NPAS is not a debt collector under the FDCPA.”
