Fair Debt Collection Practices
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 1962e]
A debt collector may not use any false,
deceptive, or misleading representation or means in connection with the collection
of any debt. Without limiting the general application of the foregoing, the following
conduct is a violation of this section:
(1) The false representation or implication that
the debt collector is vouched for, bonded by, or affiliated with the United States
or any State, including the use of any badge, uniform, or facsimile thereof.
(2) The false representation of --
(A) the character, amount, or legal
status of any debt; or
(B) any services rendered or compensation
which may be lawfully received by any debt collector for the collection of a debt.
(3) The false representation or implication that
any individual is an attorney or that any communication is from an attorney.
(4) The representation or implication that nonpayment
of any debt will result in the arrest or imprisonment of any person or the seizure,
garnishment, attachment, or sale of any property or wages of any person unless such
action is lawful and the debt collector or creditor intends to take such action.
(5) The threat to take any action that cannot legally
be taken or that is not intended to be taken.
(6) The false representation or implication that
a sale, referral, or other transfer of any interest in a debt shall cause the consumer
to --
(A) lose any claim or defense to payment
of the debt; or
(B) become subject to any practice
prohibited by this title.
(7) The false representation or implication that
the consumer committed any crime or other conduct in order to disgrace the consumer.
(8) Communicating or threatening to communicate
to any person credit information which is known or which should be known to be false,
including the failure to communicate that a disputed debt is disputed.
(9) The use or distribution of any written communication
which simulates or is falsely represented to be a document authorized, issued, or
approved by any court, official, or agency of the United States or any State, or
which creates a false impression as to its source, authorization, or approval.
(10) The use of any false representation or deceptive
means to collect or attempt to collect any debt or to obtain information concerning
a consumer.
(11) The failure to disclose in the initial written
communication with the consumer and, in addition, if the initial communication with
the consumer is oral, in that initial oral communication, that the debt collector
is attempting to collect a debt and that any information obtained will be used for
that purpose, and the failure to disclose in subsequent communications that the
communication is from a debt collector, except that this paragraph shall not apply
to a formal pleading made in connection with a legal action.
(12) The false representation or implication that
accounts have been turned over to innocent purchasers for value.
(13) The false representation or implication that
documents are legal process.
(14) The use of any business, company, or organization
name other than the true name of the debt collector's business, company, or organization.
(15) The false representation or implication that
documents are not legal process forms or do not require action by the consumer.
(16) The false representation or implication that
a debt collector operates or is employed by a consumer reporting agency as defined
by section 603(f) of this Act.
§ 808.
Unfair practices [15 USC 1692f]
A debt collector may not use unfair
or unconscionable means to collect or attempt to collect any debt. Without limiting
the general application of the foregoing, the following conduct is a violation of
this section:
(1) The collection of any amount (including any
interest, fee, charge, or expense incidental to the principal obligation) unless
such amount is expressly authorized by the agreement creating the debt or permitted
by law.
(2) The acceptance by a debt collector from any
person of a check or other payment instrument postdated by more than five days unless
such person is notified in writing of the debt collector's intent to deposit such
check or instrument not more than ten nor less than three business days prior to
such deposit.
(3) The solicitation by a debt collector of any
postdated check or other postdated payment instrument for the purpose of threatening
or instituting criminal prosecution.
(4) Depositing or threatening to deposit any postdated
check or other postdated payment instrument prior to the date on such check or instrument.
(5) Causing charges to be made to any person for
communications by concealment of the true propose of the communication. Such charges
include, but are not limited to, collect telephone calls and telegram fees.
(6) Taking or threatening to take any nonjudicial
action to effect dispossession or disablement of property if --
(A) there is no present right to possession
of the property claimed as collateral through an enforceable security interest;
(B) there is no present intention to
take possession of the property; or
(C) the property is exempt by law from
such dispossession or disablement.
(7) Communicating with a consumer regarding a debt
by post card.
(8) Using any language or symbol, other than the
debt collector's address, on any envelope when communicating with a consumer by
use of the mails or by telegram, except that a debt collector may use his business
name if such name does not indicate that he is in the debt collection business.
§ 809.
Validation of debts [15 USC 1692g]
(a) Within five days after the initial
communication with a consumer in connection with the collection of any debt, a debt
collector shall, unless the following information is contained in the initial communication
or the consumer has paid the debt, send the consumer a written notice containing
--
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is
owed;
(3) a statement that unless the consumer, within
thirty days after receipt of the notice, disputes the validity of the debt, or any
portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the
debt collector in writing within the thirty-day period that the debt, or any portion
thereof, is disputed, the debt collector will obtain verification of the debt or
a copy of a judgment against the consumer and a copy of such verification or judgment
will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written
request within the thirty-day period, the debt collector will provide the consumer
with the name and address of the original creditor, if different from the current
creditor. (b) If the consumer notifies the debt collector in writing within the
thirty-day period described in subsection (a) that the debt, or any portion thereof,
is disputed, or that the consumer requests the name and address of the original
creditor, the debt collector shall cease collection of the debt, or any disputed
portion thereof, until the debt collector obtains verification of the debt or any
copy of a judgment, or the name and address of the original creditor, and a copy
of such verification or judgment, or name and address of the original creditor,
is mailed to the consumer by the debt collector. (c) The failure of a consumer to
dispute the validity of a debt under this section may not be construed by any court
as an admission of liability by the consumer.
§ 810.
Multiple debts [15 USC 1692h]
If any consumer owes multiple debts
and makes any single payment to any debt collector with respect to such debts, such
debt collector may not apply such payment to any debt which is disputed by the consumer
and, where applicable, shall apply such payment in accordance with the consumer's
directions.
§ 811.
Legal actions by debt collectors [15 USC 1692i]
(a) Any debt collector who brings any
legal action on a debt against any consumer shall --
(1) in the case of an action to enforce an interest
in real property securing the consumer's obligation, bring such action only in a
judicial district or similar legal entity in which such real property is located;
or
(2) in the case of an action not described in paragraph
(1), bring such action only in the judicial district or similar legal entity --
(A) in which such consumer signed
the contract sued upon; or
(B) in which such consumer resides
at the commencement of the action. (b) Nothing in this title shall be construed
to authorize the bringing of legal actions by debt collectors.
§ 812.
Furnishing certain deceptive forms [15 USC 1692j
(a) It is unlawful to design, compile,
and furnish any form knowing that such form would be used to create the false belief
in a consumer that a person other than the creditor of such consumer is participating
in the collection of or in an attempt to collect a debt such consumer allegedly
owes such creditor, when in fact such person is not so participating.
(b) Any person who violates this section shall be
liable to the same extent and in the same manner as a debt collector is liable under
section 813 for failure to comply with a provision of this title.
§ 813.
Civil liability [15 USC 1692k]
(a) Except as otherwise provided by
this section, any debt collector who fails to comply with any provision of this
title with respect to any person is liable to such person in an amount equal to
the sum of --
(1) any actual damage sustained by such person as
a result of such failure;
(2) (A) in the case of any action by an individual,
such additional damages as the court may allow, but not exceeding $1,000; or
(B) in the case of a class action,
(i) such amount for each named plaintiff as could be recovered under subparagraph
(A), and (ii) such amount as the court may allow for all other class members, without
regard to a minimum individual recovery, not to exceed the lesser of $500,000 or
1 per centum of the net worth of the debt collector; and
(3) in the case of any successful action to enforce
the foregoing liability, the costs of the action, together with a reasonable attorney's
fee as determined by the court. On a finding by the court that an action under this
section was brought in bad faith and for the purpose of harassment, the court may
award to the defendant attorney's fees reasonable in relation to the work expended
and costs.
(b) In determining the amount of liability in any
action under subsection (a), the court shall consider, among other relevant factors
--
(1) in any individual action under subsection (a)
(2)(A), the frequency and persistence of noncompliance
by the debt collector, the nature of such noncompliance, and the extent to which
such noncompliance was intentional; or (2) in any class action under subsection
(a)(2)(B), the frequency and persistence of noncompliance by the debt collector,
the nature of such noncompliance, the resources of the debt collector, the number
of persons adversely affected, and the extent to which the debt collector's noncompliance
was intentional.
(c) A debt collector may not be held liable in any
action brought under this title if the debt collector shows by a preponderance of
evidence that the violation was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to avoid any such
error.
(d) An action to enforce any liability created by
this title may be brought in any appropriate United States district court without
regard to the amount in controversy, or in any other court of competent jurisdiction,
within one year from the date on which the violation occurs.
(e) No provision of this section imposing any liability
shall apply to any act done or omitted in good faith in conformity with any advisory
opinion of the Commission, notwithstanding that after such act or omission has occurred,
such opinion is amended, rescinded, or determined by judicial or other authority
to be invalid for any reason.
§ 814.
Administrative enforcement [15 USC 1692l]
(a) Compliance with this title shall
be enforced by the Commission, except to the extend that enforcement of the requirements
imposed under this title is specifically committed to another agency under subsection
(b). For purpose of the exercise by the Commission of its functions and powers under
the Federal Trade Commission Act, a violation of this title shall be deemed an unfair
or deceptive act or practice in violation of that Act. All of the functions and
powers of the Commission under the Federal Trade Commission Act are available to
the Commission to enforce compliance by any person with this title, irrespective
of whether that person is engaged in commerce or meets any other jurisdictional
tests in the Federal Trade Commission Act, including the power to enforce the provisions
of this title in the same manner as if the violation had been a violation of a Federal
Trade Commission trade regulation rule.
(b) Compliance with any requirements imposed under
this title shall be enforced under --
(1) section 8 of the Federal Deposit
Insurance Act, in the case of --
(A) national banks, by the Comptroller
of the Currency;
(B) member banks of the Federal Reserve
System (other than national banks), by the Federal Reserve Board; and
(C) banks the deposits or accounts
of which are insured by the Federal Deposit Insurance Corporation (other than members
of the Federal Reserve System), by the Board of Directors of the Federal Deposit
Insurance Corporation;
(2) section 5(d) of the Home Owners Loan Act of
1933, section 407 of the National Housing Act, and sections 6(i) and 17 of the Federal
Home Loan Bank Act, by the Federal Home Loan Bank Board (acting directing or through
the Federal Savings and Loan Insurance Corporation), in the case of any institution
subject to any of those provisions;
(3) the Federal Credit Union Act, by the Administrator
of the National Credit Union Administration with respect to any Federal credit union;
(4) subtitle IV of Title 49, by the Interstate Commerce
Commission with respect to any common carrier subject to such subtitle;
(5) the Federal Aviation Act of 1958, by the Secretary
of Transportation with respect to any air carrier or any foreign air carrier subject
to that Act; and
(6) the Packers and Stockyards Act, 1921 (except
as provided in section 406 of that Act), by the Secretary of Agriculture with respect
to any activities subject to that Act.
(c) For the purpose of the exercise
by any agency referred to in subsection (b) of its powers under any Act referred
to in that subsection, a violation of any requirement imposed under this title shall
be deemed to be a violation of a requirement imposed under that Act. In addition
to its powers under any provision of law specifically referred to in subsection
(b), each of the agencies referred to in that subsection may exercise, for the purpose
of enforcing compliance with any requirement imposed under this title any other
authority conferred on it by law, except as provided in subsection (d).
(d) Neither the Commission nor any other agency
referred to in subsection (b) may promulgate trade regulation rules or other regulations
with respect to the collection of debts by debt collectors as defined in this title.
§ 815.
Reports to Congress by the Commission [15 USC 1692m]
(a) Not later than one year after the
effective date of this title and at one-year intervals thereafter, the Commission
shall make reports to the Congress concerning the administration of its functions
under this title, including such recommendations as the Commission deems necessary
or appropriate. In addition, each report of the Commission shall include its assessment
of the extent to which compliance with this title is being achieved and a summary
of the enforcement actions taken by the Commission under section 814 of this title.
(b) In the exercise of its functions under this
title, the Commission may obtain upon request the views of any other Federal agency
which exercises enforcement functions under section 814 of this title.
§ 816.
Relation to State laws [15 USC 1692n]
This title does not annul, alter, or
affect, or exempt any person subject to the provisions of this title from complying
with the laws of any State with respect to debt collection practices, except to
the extent that those laws are inconsistent with any provision of this title, and
then only to the extent of the inconsistency. For purposes of this section, a State
law is not inconsistent with this title if the protection such law affords any consumer
is greater than the protection provided by this title.
§ 817.
Exemption for State regulation [15 USC 1692o]
The Commission shall by regulation exempt
from the requirements of this title any class of debt collection practices within
any State if the Commission determines that under the law of that State that class
of debt collection practices is subject to requirements substantially similar to
those imposed by this title, and that there is adequate provision for enforcement.
§ 818.
Effective date [15 USC 1692 note]
This title takes effect upon the expiration
of six months after the date of its enactment, but section 809 shall apply only
with respect to debts for which the initial attempt to collect occurs after such
effective date.
Approved September 20, 1977
ENDNOTES1.
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).
