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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
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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