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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 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). |
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