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.
(C) 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 1692 l ]
(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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