Litigation Byte

Federal Court Finds Public Service Providers Do Not Qualify as Debt Collectors Under FDCPA

May 29, 2025

A federal Judge for the United States District Court for the Northern District of Oklahoma recently granted the motions of several public entities to dismiss the amended complaint of a pro se plaintiff who brought claims under, among other civil and criminal statutes, the Fair Debt Collection Practices Act (FDCPA).

Background

In Stephens, plaintiff sought to hold several public service providers liable for alleged unfair debt collection activities. Specifically, in regard to her FDCPA claim, plaintiff alleged that these entities used an “instrumentality of interstate commerce or the mails in business the principal purpose of which is the collection or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another[,]” language drawn directly from the statute itself. As the Court noted, these entities were responsible for providing public utility services related to pipe, wire, or other connected facilities.

Court’s Analysis and Decision

The Stephens Court found that none of the defendants qualified as a “debt collector” for purposes of a claim under the FDCPA. As used in the FDCPA, a “debt collector” does not include “creditors who seek to collect their own debts unless they operate under an alias indicating that a third person is collecting the debt.” See 15 U.S.C. § 1692a(6)(A). The Court found that plaintiff’s mere recitation of the language of the statute was a conclusory statement that was insufficient to demonstrate she was entitled to relief. Specifically, the Stephens Court held that (1) there were no facts alleged showing that defendants engaged in interstate commerce for the purpose of collecting debts; and (2) there were no facts alleged that defendants were attempting to collect any debt except the ones due to them for the public services these entities provided. On these grounds, the Court dismissed plaintiff’s claim.

Takeaway from Stephens

Stephens highlights the important distinction between those seeking to collect on their own debts and those collecting debts on behalf of a third party. Here, the public service providers in question only sought to collect what was owed for the services they provided, which falls outside the definition of a “debt collector” and, consequently, the purview of the FDCPA.