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
