The 7th Circuit Court of appeals posted a decision on a topic near and dear to my heart, the Fair Debt Collections Practices Act (FDCPA). In the case of Catencamp v. Cendant Timeshare Resort, Judge Easterbrook writes an opinion holding that a creditor is a “debt collector” under the FDCPA if, in the course of collection, it holds itself out as a 3rd person.
Typically, the FDCPA does not apply to entities trying to collect on their own debts. But, if you refer it out to a third person, the third person is typically bound by the requirements of the FDCPA. In this case, Cendant Timeshare Resort was trying to collect on its own debt, but for whatever reason, it wrote the demand letter under a trade name, “Resort Financial Services.” The demand letter itself suggested that Resort Financial Services was a different entity than Cendant. So, the FDCPA applies and Cendant is probably on the hook if its alter ego Resort Financial Services did anything that violated the technical requirements of the FDCPA.