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
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) |