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 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 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.
§
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 re designate 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).
