Are Debt Collectors Responsible for the Actions of their Outside Counsel?

Debt collectors who are subject to the Fair Debt Collection Practices Act (the “FDCPA”) should become very familiar with the term “vicarious liability”.  Vicarious liability is defined generally as the liability that a supervisory party bears for the actionable conduct of a subordinate or associate.  Debt collectors should be familiar with this concept because they run the risk of being held vicariously liable for the actions of the outside counsel they retain to collect debts.  To be vicariously liable under the FDCPA, the debt collector must exercise control over the conduct or activities of its hired counsel.  This would seem to suggest that in the event an attorney runs afoul of the FDCPA, a case-by-case analysis is appropriate to determine the level of control/oversight that a debt collector (the client) exercised over the conduct or activities of the attorney.  However, some courts have taken it a step further and held that vicarious liability will be imposed for an attorney’s violations of the FDCPA if both the attorney and the client are debt collectors as defined by the FDCPA, regardless of how much control/oversight the debt collector exercises over the attorney.