In Gray v. Suttell & Associates, the Washington Supreme Court answered the question certified by the District Court for the Eastern District of Washington, whether debt buyers who purchase defaulted consumer obligations can pursue, as plaintiffs, collections actions in Washington. If the debt buyer directly or indirectly solicits claims for collection, the debt buyer is a “collection agency” regulated by Washington’s Collection Agency Act (“WCAA”), chapter 19.16 RCW. The Court held under RCW 19.16.110, unlicensed collections agencies cannot pursue collection actions in Washington.

While solicitation requires “some affirmative act,” this is a low threshold. Any affirmative step to obtain claims for collection is sufficient to meet it. Advertising, entering into contracts with sellers to purchase claims, and market-based research into lists used to purchase claim leads are all sufficient.

At issue in the case were over 7,000 collection lawsuits filed in Washington between 2005 and 2010 by the debt buyer as the plaintiff. At that time WCAA was ambiguous as to whether a debt buyer was a regulated “collection agency.” To resolve the ambiguity, the Supreme Court relied on the 2013 amendment to WCAA, which explicitly included debt buyers, to retroactively “clarify uncertainties that arose from the enforcement of the WCAA.”