In Barbato v. Greystone All., No. 18-1042, 2019 U.S. App. LEXIS 5336 (3d Cir. Feb. 22, 2019), the Court of Appeals for the Third Circuit imposed vicarious FDCPA liability on a debt buyer who outsourced its debt collection activities.  The appeal is concerned whether an entity that acquires debt for the “purpose of . . . collection” but outsources the actual collection activity qualifies as a “debt collector.” The District Court held that it does, and the Court of Appeals confirmed: an entity that otherwise meets the “principal purpose” definition cannot avoid the dictates of the FDCPA merely by hiring a third party to do its collecting.

Crown’s primary argument on appeal is that Henson abrogated our prior precedent such that it no longer qualifies as a “debt collector” under the statute. Crown contends this is so for two reasons: first, because Henson renders it a creditor, not a debt collector, and the two statuses are mutually exclusive; and second, because Henson rejected the so-called “default” test on which we relied, thereby undermining “the very foundation” of our prior caselaw. Appellant Br. 30. Crown overstates the effect of Henson. We need not dwell on Crown’s first argument because our recent decision in Tepper v. Amos forecloses it. . . .As to Crown’s second argument about Henson’s overall effect on our caselaw, it simply proves [*15]  too much. While it is no doubt true that Henson abrogated the default test on which we relied to distinguish between creditors and debt collectors and that it clarified the scope of the “regularly collects” definition of debt collector, Henson did not address the other prong of § 1692a(6)-the wholly separate “principal purpose” definition. To the contrary, the Court conducted a close textual analysis of the “regularly collects” definition, deriving from that portion of the statute-which requires the entity to “collect” debt “owed or due another”-that “[a]ll that matters is whether the target of the lawsuit regularly seeks to collect debts for its own account or does so for ‘another.'” 137 S. Ct. at 1721. That requirement, however, does not appear in the “principal purpose” definition, and the Supreme Court went out of its way in Henson to say that it was not opining on 13 whether debt buyers could also qualify as debt collectors under that prong of § 1692a(6). See id. But we have previously opined on this question-and in similar circumstances. . . .To determine whether Crown is a “debt collector” under the “principal purpose” definition, we look first to the plain meaning of the statutory text. See S.H. ex rel. Durrell v. LowerMerion Sch. Dist., 729 F.3d 248, 257 (3d Cir. 2013). The textstates that “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts” is a “debt collector.” 15 U.S.C. § 1692a(6). Focusing on the word “collection,” which it defines as “the act or process of collecting,” Crown argues that the “principal purpose” definition applies only to those that engage in “overt acts of collection” by interacting with consumers-not entities like Crown that purchase debt and outsource the collection. Appellant Br. 25, 31, 33. As much as Crown might wish that it were otherwise, nothing suggests that the definition is so limited. An entity qualifies under the definition if the “principal purpose” of its “business” is the “collection of any debts.” “Principal” is defined as “most important, consequential, or influential,” Principal, Webster’s Third New International Dictionary 1802 (1976) (“Webster’s Third”), and “purpose” is defined as “something that one sets before himself as an object to be attained : an end or aim” and “an object, effect, or result aimed at, intended, or attained,” id. at 1847. Thus, an entity that has the “collection of any debts” as its “most important” “aim” is a debt collector under this definition. While it is true that “collection” can be defined as “the act or process of collecting,” it can also be defined as “that which is collected.” Collection, Random House Dictionary of the English Language 290 (1973). So defined, the focus shifts from the act of collecting to what is collected, namely, the acquired debts. As long as a business’s raison d’être is obtaining payment on the debts that it acquires, it is a debt collector. Who actually obtains the payment or how they do so is of no moment. The statutory context of the “principal purpose” definition casts further doubt on Crown’s argument that Congress meant to limit it to only those entities that actively collect from consumers. . . .The existence of a middleman does not change the essential nature-the “principal purpose”-of Crown’s business. As Barbato points out, Crown could buy debt for the charitable purpose of forgiving it, or it could buy debt for the purpose of reselling it to unrelated parties at a profit. In both 5Although not addressed by the District Court or the focus of the parties’ arguments on appeal, Barbato has suggested that Crown itself collects debt because it is the named plaintiff in many collection lawsuits. Because Crown’s litigation efforts did not give rise to this appeal and we conclude that Crown otherwise satisfies the “principal purpose” definition, we need not address this argument. We note, however, that Crown’s answer to it-that its litigation efforts are irrelevant because its counsel, not Crown itself, does the collecting by, for example, drafting the pleadings-is in tension with our precedent, e.g., Pollice, 225 F.3d at 404-05 (recognizing [*21]  that a debt collector may be held vicariously liable for the conduct of its attorneys), and squarely refuted by our holding today. 17 of those cases, the entity’s “principal purpose” would not be collection. But Crown does neither of those things. Indeed, the record reflects that Crown’s only business is the purchasing of debts for the purpose of collecting on those debts, and, as Crown candidly acknowledged at oral argument, without the collection of those debts, Crown would cease to exist. In short, Crown falls squarely within § 1692a(6)’s “principal purpose” definition.