The United States Court of Appeals for the Seventh Circuit held that a debt collector is liable for the illegal actions of its attorneys and other agents that are taken on the debt collector’s behalf, as long as the attorney or agent is also acting as a debt collector. In that case, Asset Acceptance, LLC, a nationwide debt collector, hired a law firm to send debt collection letters on behalf of Asset Acceptance to consumers. However, the law firm used form letters that did not comply with the Fair Debt Collection Practices Act (“FDCPA”) such as failing to clearly identify the name of the creditor and contained confusing language.
The Seventh Circuit Court of Appeals held that the letters sent by the law firm violated the FDCPA. Ultimately, the court held that Asset Acceptance was liable for the violations of the FDCPA by the law firm that sent the illegal debt collection letters on its behalf. In support of its decision, the court stated that “A debt collector should be not be able to avoid liability for unlawful debt collection practices simply by contracting with another company to do what the law does not allow it to do directly . . .