Can a bank be sued for acting as a “debt collector” under the California Rosenthal Act? You are probably tempted to answer “yes” it can, because you know the Act defines a “debt collector” to include an entity that is collecting on behalf of itself or on behalf of third parties. But a closer look at the activities performed by employees of the bank in question may reveal that it is not, in fact, collecting on its own behalf. Instead, all collection activities may be handled through separate, though related, servicing companies, or by third parties. A consumer may have no basis for suing the bank under the Rosenthal Act, and elimination of the bank from the action could significantly reduce the available damages and decrease business interruption for bank officers.
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