|
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. ß 801. Short Title
[15 USC 1601 note] This title may be cited as the "Fair
Debt Collection Practices Act." ß 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. ß 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 (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. ß 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. ß 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 (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. ß 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. ß 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 (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. ß 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
non judicial 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. ß 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. ß 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. ß 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. ß 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. ß 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 centime 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 (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. ß 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. ß 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. ß 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. ß 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. ß 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 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, ß 3(b), 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, 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
ß 2305, 110 Stat. 3009 (Sept. 30, 1996). |
 |
|
| USER LOG-IN | |
|