Consumer Law

Can a seller be a FDCPA "consumer"?

By Richard Alderman

The Fair Debt Collection Practices Act applies only to "debts," defined as:

        any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

To satisfy this definition, there must be a consumer, who has an obligation to pay money, arising out of a transaction, primarily for personal, family, or household purposes. Obviously, a seller cannot meet these requirements--or can he?

In Oppenheim v. I.C. System, Inc., the Eleventh Circuit considered whether a individual who sold a laptop computer, paid for through PayPal, could met the requirements of the FDCPA. The court noted that the typical PayPal transaction is actuly two transaction--one between the buyer and the seller and one between the seller and PayPal. When PayPal attempted to reverse the transaction and recover the money it paid to the seller, the seller alleged violations of the FDCPA against the collection agency. The court reviewed the requirements of the Act, and concluded that the "seller," was in fact a consumer of PayPal's services. Although the transaction involved a sale, the sale was of a personal computer, the account was a PayPal "personal account," and the money received by the seller went into a personal bank account.

Full post as published by CL&P Blog on December 09, 2010 (boomark / email).