To amend the Consumer Credit
Protection Act and 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:
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) 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
