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How does a recent SCOTUS ruling for big banks impact consumers?

The Supreme Court of the United States (SCOTUS) recently ruled on a case that questioned the protections available under the Fair Debt Collection Practices Act. The case specifically delves into whether or not companies that purchase debt and attempt to receive payment from consumers are subject to the laws present within this act.

Ultimately, the court ruled in favor of the company, not the consumer.

Why did the court rule this way? As noted in a recent piece in Reuters, the opinion states that the language of the law is specifically catered to debt collectors. 

In this situation, the company in question no longer qualifies as a debt collector. Essentially, a debt collector is a business that seeks to gather payment on behalf of another company. It appears that once the company purchases the debt, it is considered a creditor and the rules present under the Fair Debt Collection Practices Act no longer apply.

What does this ruling mean? This ruling appears to reduce the protections available to consumers against debt collection companies. Critics of the ruling voice concerns that debt collectors will use the ruling to circumvent protections. In light of this ruling, debt collectors may no longer seek collection on behalf of the creditor. Instead, they may be more likely to purchase the debt to avoid these regulations.

The justices clarify that they are simply applying the law as written. They call for any appropriate changes that would extend consumer protections to occur at the Congressional level.

What options are available for consumers? Additional options are available for those who are struggling with debt. One option is bankruptcy. If a petition for relief through bankruptcy is approved, an automatic stay goes into effect. This is a court order that requires creditors to stop collection attempts. Contact an attorney to discuss your options. 

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