Davidson

*289 I.

INTRODUCTION

At issue in this appeal is whether mortgage servicers can be "debt collectors" under California's Rosenthal Fair Debt Collection Practices Act (the Rosenthal Act; Civ. Code, 1 § 1788 et seq. ). There is a split of authority among the many federal district courts that have considered the issue, and there is a paucity of California authority addressing the question.

In this case, the plaintiff, Edward Davidson, brought a putative class action against Seterus and its parent company, International Business Machines, Inc. (IBM), alleging that the defendants violated the Act and the Unfair Competition Law (UCL). The defendants demurred to Davidson's complaint, arguing that neither of them is a " 'debt collector' " who engages in " 'debt collection' " under the Act. 2 The trial court sustained the defendants' demurrer, concluding that the defendants "are not 'debt collectors' because servicing a mortgage is not a form of collecting 'consumer debts.' " 3

On appeal, Davidson contends that the trial court erred in determining that mortgage servicers are not "debt collectors" under the Rosenthal Act. We ultimately agree with Davidson's contention, in no small part…