A bank's acquisition of credit card debt on which a consumer already has defaulted does not subject the bank to federal rules on fair debt collection practices, a panel of the U.S. Court of Appeals for the Eleventh Circuit has decided.

The Federal Debt Collection Practices Act places certain requirements on “debt collectors.” Debt collectors are defined as those who “regularly” collect or attempt to collect debts owed to others or whose “principal” business purpose is debt collection. Creditors, on the other hand, are typically not subject to the statute's rules.

The plaintiff in the case, representing a putative class suing Capital One Bank in the Northern District of Georgia, argued that a bank that seeks to collect on a debt that was already in default when the bank acquired it is a debt collector subject to the requirements of the statute. Otherwise, the plaintiff argued, entities that regularly acquire and pursue collection of defaulted debt could avoid the law.