Student Loan Creditor Off the Hook for Third Party Collectors’ TCPA Violations, But is Not Exempt for Collecting Government Backed Debts


A District Court in the Southern District of California recently cut loose a student loan creditor entangled in a Telephone Consumer Protection Act (TCPA) lawsuit, finding the defendant was not vicariously liable for the alleged TCPA violations by its third party collectors. See Henderson v United Student Aid Funds, Inc., No. 13CV1845 JLS, 2017 WL 766548 (S.D. Cal. February 28, 2017). Although United Student Aid Funds, Inc., (USAF) conducted quarterly audits, yearly reviews, and required the servicing of certain loans by top performing collection vendors, the Court found no agency relationship with its vendors because USAF “controlled only the outcome of [the vendor’s] work, rather than the manner and means by which it was accomplished.”