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*Sec.
*801. Short title
*802. Findings and 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 practices.
*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.
*SS 801. Short
title
*This title may be
cited as the “Fair Debt Collections Practices Act”.
*SS 802. Findings
and purpose
*(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
debtors.
*(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 debtors against debt collection abuses.
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*SS 803. Definitions
“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 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, 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
debtors 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 this 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 debtors, performs bona fide debtor
credit counseling and assists debtors in the liquidation of their debts
by receiving payments from such debtors 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 debtor’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.
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*SS 804. Acquisition
of location information
*Any debt collector
communicating with any person other than the debtor for the purpose of
acquiring location information about the debtor shall:
*(1) identify himself,
state that he is confirming or correcting location information concerning
the debtor, and, only if expressly requested, identify his employer;
*(2) not state that
such debtor 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 debtor 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 communication from the debt collector.
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*SS 805. Communication
in connection with debt collection
*(a) Communication
With The Debtor Generally: Without the prior consent of the debtor given
directly to the debt collector or the express permission of a court of
competent jurisdiction, a debt collector may not communicate with a debtor
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 debtor. In the absence of knowledge of circumstances
to the contrary, a debt collector shall assume that the convenient time
for communicating with a debtor is after 8 o’clock antemeridian and
before 9 o’clock postmeridian, local time at the debtor’s location;
*(2) if the debt
collector knows the debtor 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 debtor; or
*(3) at the debtor’s
place of employment if the debt collector knows or has reason to know
that the debtor’s employer prohibits the debtor from receiving such
communication.
*(b) Communication
With Third Parties: Except as provided in section 804, without the prior
consent of the debtor 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 the debtor, his attorney, a debtor 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 debtor notifies a debt collector in writing that the debtor refuses
to pay a debt or that the debtor wishes the debt collector to cease
further communication with the debtor, the debt collector shall not
communicate further with the debtor with respect to such debt, except:
*(1) to advise the
debtor that the debt collector’s further efforts are being terminated;
*(2) to notify the
debtor 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 debtor that the debt collector or creditor intends to
invoke a specified remedy. If such notice from the debtor is made by
mail, notification shall be complete upon receipt.
*(d) For the purpose
of this section, the term ‘debtor’ includes the debtor’s spouse, parent
(if the debtor is a minor), guardian, executor, or administrator.
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*SS 806. Harassment
or abuse
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 debtors who allegedly refuse to pay debts, except to a
debtor 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.
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*SS 807. False
or misleading representations.
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 debtor 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 debtor committed any crime or other conduct
in order to disgrace the debtor.
*(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 debtor.
*(11) Except as
otherwise provided for communications to acquire location information
under section 804, the failure to disclose clearly in all communications
made to collect a debt or to obtain information about a debtor, that
the debt collector is attempting to collect a debt and that any information
obtained will be used for that purpose.
*(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 form
or do not require action by the debtor.
*(16) The false
representation or implication that a debt collector operates or is employed
by a debtor reporting agency as defined by section 603(f) of this Act.
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*SS 808. Unfair
practices
*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
purpose 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 debtor 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 debtor 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.
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*SS 809. Validation
of debts
*(a) Within five days
after the initial communication with a debtor in connection with the collection
of any debt, a debt collector shall, unless the following information
is contained in the initial communication or the debtor has paid the debt,
send the debtor 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 debtor, 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 debtor 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 will be mailed to the debtor by the debt collector; and
*(5) a statement
that, upon the debtor’s written request within the thirty day period,
the debt collector will provide the debtor with the name and address
of the original creditor, if different from the current creditor.
*(b) If the debtor
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 debtor 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 a 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 debtor by the debt collector.
*(c) The failure of
a debtor to dispute the validity of a debt under this section may not
be construed by any court as an admission of liability by the debtor.
*SS 810. Multiple
debts
*If any debtor 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 debtor and, where applicable, shall
apply such payment in accordance with the debtor’s directions.
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*SS 811. Legal
actions by debt collectors
*(a) Any debt collector
who brings any legal action on a debt against any debtor shall:
*(1) in the case
of an action to enforce an interest in real property securing the debtor’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 debtor signed the contract sued upon; or
*(B) in which
such debtor 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.
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*SS 812. Furnishing
certain deceptive forms
*(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 debtor that a person other than
the creditor of such debtor is participating in the collection of or in
an attempt to collect a debt such debtor 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.
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*SS 813. Civil
liability
*(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 $300,000 or 1 per
cent 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 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
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 reasonable adapted to avoid any such error.
Jurisdiction
*(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.
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*SS 814. Administrative
enforcement
(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 the 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 or 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 Loan Act, by the Federal Home Loan Bank Board (acting directly
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) the Acts to
regulate commerce, by the Interstate Commerce Commission with respect
to any common carrier subject to those Acts;
*(5) the Federal
Aviation Act of 1958, by the Civil Aeronautics Board 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, expect as provide 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 ad defined in this title.
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*SS 815. Reports
to Congress by the Commission
*(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.
*SS 816. Relation
to State Laws
*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 the purposes of this section, a state law is not inconsistent with
this title if the protection of such law affords any debtor is greater
that the protection provided
by this title.
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*SS 817. Exemption
for State Regulation
*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.
*SS 818. Effective
date
“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.”
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Approved September
20, 1977.
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