|
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 postjudgment 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 1692e]
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).
|
