On July 21, 2015, the Second Circuit issued a decision in Beauvoir v. Israel, 14‐CV-3794, holding that an attempt to recover money owed as a result of a theft is not covered by the Fair Debt Collection Practices Act (“FDCPA”).
In Beauvoir, the defendant was an attorney employed by the company that provided natural gas to the plaintiffs’ home. The defendant contacted the plaintiffs, accusing them of tampering with their gas meter, allowing them to use gas that was unmetered, and thus, in effect, stolen. The plaintiffs sued the defendant in the EDNY for violating the FDCPA, claiming that the defendant’s communications with them had not complied with the requirements of the FDCPA in several ways. The EDNY dismissed the plaintiffs’ claims. The Second Circuit affirmed, explaining:
The FDCPA defines a “debt” 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.” We have held that, at a minimum, the statute contemplates that the debt has arisen as a result of the rendition of a service or purchase of property or other item of value.
Although we have not previously had occasion to address whether money owed as a result of theft constitutes a “debt” for purposes of the FDCPA, several of our sister circuits have addressed the question and unanimously held that liability deriving from theft or torts does not constitute a “debt’ within the meaning of the FDCPA. Each court reasoned that the transaction from which the obligation to pay money arises must, by definition, be one that is consensual in nature.
We join our sister circuits and hold that money owed as a result of theft is not an “obligation or alleged obligation of a consumer to pay money arising out of a transaction” and, therefore, does not constitute a “debt” for purposes of the FDCPA. Such an obligation plainly is not one that has “arisen as a result of the rendition of a service or purchase of property or other item of value.”
(Internal quotations and citations omitted).