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Article
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The Fair Debt Collection Practices
Act
As amended by
Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996)
To amend the
Consumer Credit Protection Act to prohibit abusive practices by
debt collectors.
Be it enacted by
the Senate and House of Representatives of the United States of
America in Congress assembled, That the Consumer Credit
Protection Act (15 U.S.C. 1601 et seq.) is amended by adding at
the end thereof the following new title:
TITLE VIII - DEBT
COLLECTION PRACTICES [Fair Debt Collection Practices Act]
Sec.
801. Short Title
802. Congressional findings and declaration of purpose
803. Definitions
804. Acquisition of location information
805. Communication in connection with debt collection
806. Harassment or abuse
807. False or misleading representations
808. Unfair practice
809. Validation of debts
810. Multiple debts
811. Legal actions by debt collectors
812. Furnishing certain deceptive forms
813. Civil liability
814. Administrative enforcement
815. Reports to Congress by the Commission
816. Relation to State laws
817. Exemption for State regulation
818. Effective date
§
801. Short Title
[15 USC 1601 note]
This title may be
cited as the "Fair Debt Collection Practices Act."
§
802.
Congressional findings and declarations of purpose [15 USC
1692]
(a) There is
abundant evidence of the use of abusive, deceptive, and unfair
debt collection practices by many debt collectors. Abusive debt
collection practices contribute to the number of personal
bankruptcies, to marital instability, to the loss of jobs, and
to invasions of individual privacy.
(b) Existing laws
and procedures for redressing these injuries are inadequate to
protect consumers.
(c) Means other
than misrepresentation or other abusive debt collection
practices are available for the effective collection of debts.
(d) Abusive debt
collection practices are carried on to a substantial extent in
interstate commerce and through means and instrumentalities of
such commerce. Even where abusive debt collection practices are
purely intrastate in character, they nevertheless directly
affect interstate commerce.
(e) It is the
purpose of this title to eliminate abusive debt collection
practices by debt collectors, to insure that those debt
collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote
consistent State action to protect consumers against debt
collection abuses.
§
803. Definitions
[15 USC 1692a]
As used in this
title --
(1) The term
"Commission" means the Federal Trade Commission.
(2) The term
"communication" means the conveying of information
regarding a debt directly or indirectly to any person through
any medium.
(3) The term
"consumer" means any natural person obligated or
allegedly obligated to pay any debt.
(4) The term
"creditor" means any person who offers or extends
credit creating a debt or to whom a debt is owed, but such
term does not include any person to the extent that he
receives an assignment or transfer of a debt in default solely
for the purpose of facilitating collection of such debt for
another.
(5) The term
"debt" means any obligation or alleged obligation of
a consumer to pay money arising out of a transaction in which
the money, property, insurance or services which are the
subject of the transaction are primarily for personal, family,
or household purposes, whether or not such obligation has been
reduced to judgment.
(6) The term
"debt collector" means 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, or who regularly collects or attempts to collect,
directly or indirectly, debts owed or due or asserted to be
owed or due another. Notwithstanding the exclusion provided by
clause (F) of the last sentence of this paragraph, the term
includes any creditor who, in the process of collecting his
own debts, uses any name other than his own which would
indicate that a third person is collecting or attempting to
collect such debts. For the purpose of section 808(6), such
term also includes any person who uses any instrumentality of
interstate commerce or the mails in any business the principal
purpose of which is the enforcement of security interests. The
term does not include --
(A) any
officer or employee of a creditor while, in the name of the
creditor, collecting debts for such creditor;
(B) any person
while acting as a debt collector for another person, both of
whom are related by common ownership or affiliated by
corporate control, if the person acting as a debt collector
does so only for persons to whom it is so related or
affiliated and if the principal business of such person is
not the collection of debts;
(C) any
officer or employee of the United States or any State to the
extent that collecting or attempting to collect any debt is
in the performance of his official duties;
(D) any person
while serving or attempting to serve legal process on any
other person in connection with the judicial enforcement of
any debt;
(E) any
nonprofit organization which, at the request of consumers,
performs bona fide consumer credit counseling and assists
consumers in the liquidation of their debts by receiving
payments from such consumers and distributing such amounts
to creditors; and
(F) any person
collecting or attempting to collect any debt owed or due or
asserted to be owed or due another to the extent such
activity (i) is incidental to a bona fide fiduciary
obligation or a bona fide escrow arrangement; (ii) concerns
a debt which was originated by such person; (iii) concerns a
debt which was not in default at the time it was obtained by
such person; or (iv) concerns a debt obtained by such person
as a secured party in a commercial credit transaction
involving the creditor.
(7) The term
"location information" means a consumer's place of
abode and his telephone number at such place, or his place of
employment.
(8) The term
"State" means any State, territory, or possession of
the United States, the District of Columbia, the Commonwealth
of Puerto Rico, or any political subdivision of any of the
foregoing.
§
804. Acquisition
of location information [15 USC 1692b]
Any debt collector
communicating with any person other than the consumer for the
purpose of acquiring location information about the consumer
shall --
(1) identify
himself, state that he is confirming or correcting location
information concerning the consumer, and, only if expressly
requested, identify his employer;
(2) not state
that such consumer owes any debt;
(3) not
communicate with any such person more than once unless
requested to do so by such person or unless the debt collector
reasonably believes that the earlier response of such person
is erroneous or incomplete and that such person now has
correct or complete location information;
(4) not
communicate by post card;
(5) not use any
language or symbol on any envelope or in the contents of any
communication effected by the mails or telegram that indicates
that the debt collector is in the debt collection business or
that the communication relates to the collection of a debt;
and
(6) after the
debt collector knows the consumer is represented by an
attorney with regard to the subject debt and has knowledge of,
or can readily ascertain, such attorney's name and address,
not communicate with any person other than that attorney,
unless the attorney fails to respond within a reasonable
period of time to the communication from the debt collector.
§
805.
Communication in connection with debt collection [15
USC 1692c]
(a) COMMUNICATION
WITH THE CONSUMER GENERALLY. Without the prior consent of
the consumer given directly to the debt collector or the express
permission of a court of competent jurisdiction, a debt
collector may not communicate with a consumer in connection with
the collection of any debt --
(1) at any
unusual time or place or a time or place known or which should
be known to be inconvenient to the consumer. In the absence of
knowledge of circumstances to the contrary, a debt collector
shall assume that the convenient time for communicating with a
consumer is after 8 o'clock antimeridian and before 9 o'clock
postmeridian, local time at the consumer's location;
(2) if the debt
collector knows the consumer is represented by an attorney
with respect to such debt and has knowledge of, or can readily
ascertain, such attorney's name and address, unless the
attorney fails to respond within a reasonable period of time
to a communication from the debt collector or unless the
attorney consents to direct communication with the consumer;
or
(3) at the
consumer's place of employment if the debt collector knows or
has reason to know that the consumer's employer prohibits the
consumer from receiving such communication.
(b) COMMUNICATION
WITH THIRD PARTIES. Except as provided in section 804,
without the prior consent of the consumer given directly to the
debt collector, or the express permission of a court of
competent jurisdiction, or as reasonably necessary to effectuate
a post judgment judicial remedy, a debt collector may not
communicate, in connection with the collection of any debt, with
any person other than a consumer, his attorney, a consumer
reporting agency if otherwise permitted by law, the creditor,
the attorney of the creditor, or the attorney of the debt
collector.
(c) CEASING
COMMUNICATION. If a consumer notifies a debt collector in
writing that the consumer refuses to pay a debt or that the
consumer wishes the debt collector to cease further
communication with the consumer, the debt collector shall not
communicate further with the consumer with respect to such debt,
except --
(1) to advise
the consumer that the debt collector's further efforts are
being terminated;
(2) to notify
the consumer that the debt collector or creditor may invoke
specified remedies which are ordinarily invoked by such debt
collector or creditor; or
(3) where
applicable, to notify the consumer that the debt collector or
creditor intends to invoke a specified remedy.
If such notice
from the consumer is made by mail, notification shall be
complete upon receipt.
(d) For the
purpose of this section, the term "consumer" includes
the consumer's spouse, parent (if the consumer is a minor),
guardian, executor, or administrator.
§
806. Harassment
or abuse [15 USC 1692d]
A debt collector
may not engage in any conduct the natural consequence of which
is to harass, oppress, or abuse any person in connection with
the collection of a debt. Without limiting the general
application of the foregoing, the following conduct is a
violation of this section:
(1) The use or
threat of use of violence or other criminal means to harm the
physical person, reputation, or property of any person.
(2) The use of
obscene or profane language or language the natural
consequence of which is to abuse the hearer or reader.
(3) The
publication of a list of consumers who allegedly refuse to pay
debts, except to a consumer reporting agency or to persons
meeting the requirements of section 603(f) or 604(3)1
of this Act.
(4) The
advertisement for sale of any debt to coerce payment of the
debt.
(5) Causing a
telephone to ring or engaging any person in telephone
conversation repeatedly or continuously with intent to annoy,
abuse, or harass any person at the called number.
(6) Except as
provided in section 804, the placement of telephone calls
without meaningful disclosure of the caller's identity.
§
807. False or
misleading representations [15 USC 1962e]
A debt collector
may not use any false, deceptive, or misleading representation
or means in connection with the collection of any debt. Without
limiting the general application of the foregoing, the following
conduct is a violation of this section:
(1) The false
representation or implication that the debt collector is
vouched for, bonded by, or affiliated with the United States
or any State, including the use of any badge, uniform, or
facsimile thereof.
(2) The false
representation of --
(A) the
character, amount, or legal status of any debt; or
(B) any
services rendered or compensation which may be lawfully
received by any debt collector for the collection of a debt.
(3) The false
representation or implication that any individual is an
attorney or that any communication is from an attorney.
(4) The
representation or implication that nonpayment of any debt will
result in the arrest or imprisonment of any person or the
seizure, garnishment, attachment, or sale of any property or
wages of any person unless such action is lawful and the debt
collector or creditor intends to take such action.
(5) The threat
to take any action that cannot legally be taken or that is not
intended to be taken.
(6) The false
representation or implication that a sale, referral, or other
transfer of any interest in a debt shall cause the consumer to
--
(A) lose any
claim or defense to payment of the debt; or
(B) become
subject to any practice prohibited by this title.
(7) The false
representation or implication that the consumer committed any
crime or other conduct in order to disgrace the consumer.
(8)
Communicating or threatening to communicate to any person
credit information which is known or which should be known to
be false, including the failure to communicate that a disputed
debt is disputed.
(9) The use or
distribution of any written communication which simulates or
is falsely represented to be a document authorized, issued, or
approved by any court, official, or agency of the United
States or any State, or which creates a false impression as to
its source, authorization, or approval.
(10) The use of
any false representation or deceptive means to collect or
attempt to collect any debt or to obtain information
concerning a consumer.
(11) The failure
to disclose in the initial written communication with the
consumer and, in addition, if the initial communication with
the consumer is oral, in that initial oral communication, that
the debt collector is attempting to collect a debt and that
any information obtained will be used for that purpose, and
the failure to disclose in subsequent communications that the
communication is from a debt collector, except that this
paragraph shall not apply to a formal pleading made in
connection with a legal action.
(12) The false
representation or implication that accounts have been turned
over to innocent purchasers for value.
(13) The false
representation or implication that documents are legal
process.
(14) The use of
any business, company, or organization name other than the
true name of the debt collector's business, company, or
organization.
(15) The false
representation or implication that documents are not legal
process forms or do not require action by the consumer.
(16) The false
representation or implication that a debt collector operates
or is employed by a consumer reporting agency as defined by
section 603(f) of this Act.
§
808. Unfair
practices [15 USC 1692f]
A debt collector
may not use unfair or unconscionable means to collect or attempt
to collect any debt. Without limiting the general application of
the foregoing, the following conduct is a violation of this
section:
(1) The
collection of any amount (including any interest, fee, charge,
or expense incidental to the principal obligation) unless such
amount is expressly authorized by the agreement creating the
debt or permitted by law.
(2) The
acceptance by a debt collector from any person of a check or
other payment instrument postdated by more than five days
unless such person is notified in writing of the debt
collector's intent to deposit such check or instrument not
more than ten nor less than three business days prior to such
deposit.
(3) The
solicitation by a debt collector of any postdated check or
other postdated payment instrument for the purpose of
threatening or instituting criminal prosecution.
(4) Depositing
or threatening to deposit any postdated check or other
postdated payment instrument prior to the date on such check
or instrument.
(5) Causing
charges to be made to any person for communications by
concealment of the true propose of the communication. Such
charges include, but are not limited to, collect telephone
calls and telegram fees.
(6) Taking or
threatening to take any nonjudicial action to effect
dispossession or disablement of property if --
(A) there is
no present right to possession of the property claimed as
collateral through an enforceable security interest;
(B) there is
no present intention to take possession of the property; or
(C) the
property is exempt by law from such dispossession or
disablement.
(7)
Communicating with a consumer regarding a debt by post card.
(8) Using any
language or symbol, other than the debt collector's address,
on any envelope when communicating with a consumer by use of
the mails or by telegram, except that a debt collector may use
his business name if such name does not indicate that he is in
the debt collection business.
§
809. Validation
of debts [15 USC 1692g]
(a) Within five
days after the initial communication with a consumer in
connection with the collection of any debt, a debt collector
shall, unless the following information is contained in the
initial communication or the consumer has paid the debt, send
the consumer a written notice containing --
(1) the amount
of the debt;
(2) the name of
the creditor to whom the debt is owed;
(3) a statement
that unless the consumer, within thirty days after receipt of
the notice, disputes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid by the debt
collector;
(4) a statement
that if the consumer notifies the debt collector in writing
within the thirty-day period that the debt, or any portion
thereof, is disputed, the debt collector will obtain
verification of the debt or a copy of a judgment against the
consumer and a copy of such verification or judgment will be
mailed to the consumer by the debt collector; and
(5) a statement
that, upon the consumer's written request within the
thirty-day period, the debt collector will provide the
consumer with the name and address of the original creditor,
if different from the current creditor.
(b) If the
consumer notifies the debt collector in writing within the
thirty-day period described in subsection (a) that the debt, or
any portion thereof, is disputed, or that the consumer requests
the name and address of the original creditor, the debt
collector shall cease collection of the debt, or any disputed
portion thereof, until the debt collector obtains verification
of the debt or any copy of a judgment, or the name and address
of the original creditor, and a copy of such verification or
judgment, or name and address of the original creditor, is
mailed to the consumer by the debt collector.
(c) The failure of
a consumer to dispute the validity of a debt under this section
may not be construed by any court as an admission of liability
by the consumer.
§
810. Multiple
debts [15 USC 1692h]
If any consumer
owes multiple debts and makes any single payment to any debt
collector with respect to such debts, such debt collector may
not apply such payment to any debt which is disputed by the
consumer and, where applicable, shall apply such payment in
accordance with the consumer's directions.
§
811. Legal
actions by debt collectors [15 USC 1692i]
(a) Any debt
collector who brings any legal action on a debt against any
consumer shall --
(1) in the case
of an action to enforce an interest in real property securing
the consumer's obligation, bring such action only in a
judicial district or similar legal entity in which such real
property is located; or
(2) in the case
of an action not described in paragraph (1), bring such action
only in the judicial district or similar legal entity --
(A) in which
such consumer signed the contract sued upon; or
(B) in which
such consumer resides at the commencement of the action.
(b) Nothing in
this title shall be construed to authorize the bringing of legal
actions by debt collectors.
§
812. Furnishing
certain deceptive forms [15 USC 1692j]
(a) It is unlawful
to design, compile, and furnish any form knowing that such form
would be used to create the false belief in a consumer that a
person other than the creditor of such consumer is participating
in the collection of or in an attempt to collect a debt such
consumer allegedly owes such creditor, when in fact such person
is not so participating.
(b) Any person who
violates this section shall be liable to the same extent and in
the same manner as a debt collector is liable under section 813
for failure to comply with a provision of this title.
§
813. Civil
liability [15 USC 1692k]
(a) Except as
otherwise provided by this section, any debt collector who fails
to comply with any provision of this title with respect to any
person is liable to such person in an amount equal to the sum of
--
(1) any actual
damage sustained by such person as a result of such failure;
(2) (A) in the
case of any action by an individual, such additional damages
as the court may allow, but not exceeding $1,000; or
(B) in the
case of a class action, (i) such amount for each named
plaintiff as could be recovered under subparagraph (A), and
(ii) such amount as the court may allow for all other class
members, without regard to a minimum individual recovery,
not to exceed the lesser of $500,000 or 1 per centum of the
net worth of the debt collector; and
(3) in the case
of any successful action to enforce the foregoing liability,
the costs of the action, together with a reasonable attorney's
fee as determined by the court. On a finding by the court that
an action under this section was brought in bad faith and for
the purpose of harassment, the court may award to the
defendant attorney's fees reasonable in relation to the work
expended and costs.
(b) In determining
the amount of liability in any action under subsection (a), the
court shall consider, among other relevant factors --
(1) in any
individual action under subsection (a)(2)(A), the frequency
and persistence of noncompliance by the debt collector, the
nature of such noncompliance, and the extent to which such
noncompliance was intentional; or
(2) in any class
action under subsection (a)(2)(B), the frequency and
persistence of noncompliance by the debt collector, the nature
of such noncompliance, the resources of the debt collector,
the number of persons adversely affected, and the extent to
which the debt collector's noncompliance was intentional.
(c) A debt
collector may not be held liable in any action brought under
this title if the debt collector shows by a preponderance of
evidence that the violation was not intentional and resulted
from a bona fide error notwithstanding the maintenance of
procedures reasonably adapted to avoid any such error.
(d) An action to
enforce any liability created by this title may be brought in
any appropriate United States district court without regard to
the amount in controversy, or in any other court of competent
jurisdiction, within one year from the date on which the
violation occurs.
(e) No provision
of this section imposing any liability shall apply to any act
done or omitted in good faith in conformity with any advisory
opinion of the Commission, notwithstanding that after such act
or omission has occurred, such opinion is amended, rescinded, or
determined by judicial or other authority to be invalid for any
reason.
§
814.
Administrative enforcement [15 USC 1692l]
(a) Compliance
with this title shall be enforced by the Commission, except to
the extend that enforcement of the requirements imposed under
this title is specifically committed to another agency under
subsection (b). For purpose of the exercise by the Commission of
its functions and powers under the Federal Trade Commission Act,
a violation of this title shall be deemed an unfair or deceptive
act or practice in violation of that Act. All of the functions
and powers of the Commission under the Federal Trade Commission
Act are available to the Commission to enforce compliance by any
person with this title, irrespective of whether that person is
engaged in commerce or meets any other jurisdictional tests in
the Federal Trade Commission Act, including the power to enforce
the provisions of this title in the same manner as if the
violation had been a violation of a Federal Trade Commission
trade regulation rule.
(b) Compliance
with any requirements imposed under this title shall be enforced
under --
(1) section 8 of
the Federal Deposit Insurance Act, in the case of --
(A) national
banks, by the Comptroller of the Currency;
(B) member
banks of the Federal Reserve System (other than national
banks), by the Federal Reserve Board; and
(C) banks the
deposits or accounts of which are insured by the Federal
Deposit Insurance Corporation (other than members of the
Federal Reserve System), by the Board of Directors of the
Federal Deposit Insurance Corporation;
(2) section 5(d)
of the Home Owners Loan Act of 1933, section 407 of the
National Housing Act, and sections 6(i) and 17 of the Federal
Home Loan Bank Act, by the Federal Home Loan Bank Board
(acting directing or through the Federal Savings and Loan
Insurance Corporation), in the case of any institution subject
to any of those provisions;
(3) the Federal
Credit Union Act, by the Administrator of the National Credit
Union Administration with respect to any Federal credit union;
(4) subtitle IV
of Title 49, by the Interstate Commerce Commission with
respect to any common carrier subject to such subtitle;
(5) the Federal
Aviation Act of 1958, by the Secretary of Transportation with
respect to any air carrier or any foreign air carrier subject
to that Act; and
(6) the Packers
and Stockyards Act, 1921 (except as provided in section 406 of
that Act), by the Secretary of Agriculture with respect to any
activities subject to that Act.
(c) For the
purpose of the exercise by any agency referred to in subsection
(b) of its powers under any Act referred to in that subsection,
a violation of any requirement imposed under this title shall be
deemed to be a violation of a requirement imposed under that
Act. In addition to its powers under any provision of law
specifically referred to in subsection (b), each of the agencies
referred to in that subsection may exercise, for the purpose of
enforcing compliance with any requirement imposed under this
title any other authority conferred on it by law, except as
provided in subsection (d).
(d) Neither the
Commission nor any other agency referred to in subsection (b)
may promulgate trade regulation rules or other regulations with
respect to the collection of debts by debt collectors as defined
in this title.
§
815. Reports to
Congress by the Commission [15 USC 1692m]
(a) Not later than
one year after the effective date of this title and at one-year
intervals thereafter, the Commission shall make reports to the
Congress concerning the administration of its functions under
this title, including such recommendations as the Commission
deems necessary or appropriate. In addition, each report of the
Commission shall include its assessment of the extent to which
compliance with this title is being achieved and a summary of
the enforcement actions taken by the Commission under section
814 of this title.
(b) In the
exercise of its functions under this title, the Commission may
obtain upon request the views of any other Federal agency which
exercises enforcement functions under section 814 of this title.
§
816. Relation to
State laws [15 USC 1692n]
This title does
not annul, alter, or affect, or exempt any person subject to the
provisions of this title from complying with the laws of any
State with respect to debt collection practices, except to the
extent that those laws are inconsistent with any provision of
this title, and then only to the extent of the inconsistency.
For purposes of this section, a State law is not inconsistent
with this title if the protection such law affords any consumer
is greater than the protection provided by this title.
§
817. Exemption
for State regulation [15 USC 1692o]
The Commission
shall by regulation exempt from the requirements of this title
any class of debt collection practices within any State if the
Commission determines that under the law of that State that
class of debt collection practices is subject to requirements
substantially similar to those imposed by this title, and that
there is adequate provision for enforcement.
§
818. Effective
date [15 USC 1692 note]
This title takes
effect upon the expiration of six months after the date of its
enactment, but section 809 shall apply only with respect to
debts for which the initial attempt to collect occurs after such
effective date.
Approved September
20, 1977
ENDNOTES
1.
So in original; however, should read "604(a)(3)."
LEGISLATIVE
HISTORY:
Public Law 95-109
[H.R. 5294]
HOUSE REPORT No.
95-131 (Comm. on Banking, Finance, and Urban Affairs).
SENATE REPORT No.
95-382 (Comm. on Banking, Housing, and Urban Affairs).
CONGRESSIONAL
RECORD, Vol. 123 (1977):
Apr. 4,
considered and passed House.
Aug. 5,
considered and passed Senate, amended.
Sept. 8, House
agreed to Senate amendment.
WEEKLY COMPILATION
OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 39:
Sept. 20,
Presidential statement.
AMENDMENTS:
SECTION 621,
SUBSECTIONS (b)(3), (b)(4) and (b)(5) were amended to transfer
certain administrative enforcement responsibilities, pursuant to
Pub. L. 95-473, § 3(b), Oct. 17, 1978. 92 Stat. 166; Pub. L.
95-630, Title V. § 501, November 10, 1978, 92 Stat. 3680; Pub.
L. 98-443, § 9(h), Oct. 4, 1984, 98 Stat. 708.
SECTION 803,
SUBSECTION (6), defining "debt collector," was amended
to repeal the attorney at law exemption at former Section (6)(F)
and to redesignate Section 803(6)(G) pursuant to Pub. L. 99-361,
July 9, 1986, 100 Stat. 768. For legislative history, see
H.R. 237, HOUSE REPORT No. 99-405 (Comm. on Banking, Finance and
Urban Affairs). CONGRESSIONAL RECORD: Vol. 131 (1985): Dec. 2,
considered and passed House. Vol. 132 (1986): June 26,
considered and passed Senate.
SECTION 807,
SUBSECTION (11), was amended to affect when debt collectors must
state (a) that they are attempting to collect a debt and (b)
that information obtained will be used for that purpose,
pursuant to Pub. L. 104-208 § 2305, 110 Stat. 3009 (Sept.
30, 1996).
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