10th Circuit Reinforces Contractual Consent as Defense Against TCPA Claims
A recent decision from the U.S. Court of Appeals for the Tenth Circuit reinforces two important legal principles for creditors and finance companies: entities collecting debts they own are generally not considered debt collectors under the Fair Debt Collection Practices Act (FDCPA), and clear contractual consent for automated communications can provide a strong defense against claims under the Telephone Consumer Protection Act (TCPA).
In Thigpen v. Westlake Services, LLC, the appellate court affirmed summary judgment in favor of Westlake Services, concluding that the plaintiff’s federal and state law claims lacked legal merit. The ruling provides further guidance on how courts evaluate debt ownership, contractual disclosures, and express consent in consumer finance agreements.
Dispute Stemmed from an Assigned Retail Installment Contract
The case arose after Richard Thomas Thigpen purchased a truck through a retail installment contract that was immediately assigned to Westlake Services, LLC. After the account later went into default, the plaintiff filed suit alleging violations of the Truth in Lending Act (TILA), the FDCPA, the TCPA, breach of contract, unjust enrichment, and the New Mexico Unfair Practices Act.
The plaintiff argued that Westlake engaged in improper collection practices, failed to provide required disclosures, and contacted him without valid consent. A federal district court rejected those claims and granted summary judgment in favor of Westlake. The plaintiff subsequently appealed to the Tenth Circuit.
Court Finds TILA Claims Were Time-Barred
One of the plaintiff’s primary arguments centered on alleged disclosure deficiencies under the Truth in Lending Act. The appellate court agreed with the district court that these claims were barred by TILA’s one-year statute of limitations.
The court also rejected the plaintiff’s attempts to invoke equitable tolling and a continuing violation theory, finding no legal basis to extend the filing deadline. In addition, the panel determined that the disclosures contained within the retail installment contract were complete, conspicuous, and satisfied the applicable statutory requirements.
Westlake Was Not a Debt Collector Under the FDCPA
A significant portion of the opinion addressed whether Westlake Services qualified as a debt collector under the FDCPA.
The Tenth Circuit concluded that it did not. Because Westlake acquired ownership of the retail installment contract immediately after the vehicle purchase—and before the account entered default—it was collecting a debt that it owned rather than attempting to collect a debt owed to another party.
The court further emphasized that the FDCPA excludes entities that obtain debts before default from the statute’s definition of a debt collector. As a result, the plaintiff’s FDCPA claims failed as a matter of law.
The decision serves as another reminder that debt ownership and the timing of an assignment remain central factors when determining whether the FDCPA applies to a creditor or account purchaser.
Clear Contract Language Defeated the TCPA Allegations
The plaintiff also alleged that Westlake violated the Telephone Consumer Protection Act through automated telephone calls and text messages.
The appellate court found that the retail installment agreement contained clear, bold, and unambiguous language authorizing automated communications. Under the contract, the plaintiff expressly agreed to receive calls and text messages using prerecorded voices and automated dialing technology at telephone numbers provided in connection with the account.
Rejecting arguments that the consent language was overly broad or ambiguous, the Tenth Circuit held that the contractual provision constituted valid prior express consent. Because that consent was clearly documented within the signed agreement, it barred the plaintiff’s TCPA claim.
The ruling highlights the importance of well-drafted consent provisions in consumer finance contracts, particularly as litigation involving automated communications continues to evolve.
State Law Claims Also Failed
The appellate court likewise affirmed dismissal of the plaintiff’s remaining state law claims.
According to the opinion, the written contract expressly governed issues including late fees, insurance obligations, and repossession rights. Because a valid contract controlled the parties’ relationship, the unjust enrichment claim could not proceed.
The court also found no evidence supporting claims under the New Mexico Unfair Practices Act, concluding that Westlake simply exercised rights that were expressly provided by the contract.
Why the Decision Matters
Although the decision does not establish new law, it reinforces established principles that continue to shape litigation involving creditors, finance companies, and account assignees.
For creditors that acquire accounts before default, the opinion underscores the statutory distinction between creditors collecting their own debts and third-party debt collectors subject to the FDCPA. It also demonstrates how carefully drafted contractual consent provisions may provide a meaningful defense against TCPA claims involving automated calls and text messages.
As courts continue to scrutinize consumer communication practices, the decision illustrates the value of maintaining clear contract language, comprehensive disclosures, and documented consumer consent throughout the lending process.
