THE FAIR DEBT COLLECTION
amended by Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996)
amend the Consumer Credit Protection Act to prohibit abusive practices by
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:
VIII - DEBT COLLECTION PRACTICES [Fair Debt Collection
801. Short Title.
802. Findings and purpose.
804. Acquisition of location information.
805. Communication in connection with debt
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.
801. Short Title [15 USC 1601 note]
may be cited as the "Fair Debt Collection Practices Act."
802. Findings and 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.
laws and procedures for redressing these injuries are inadequate to protect
other than misrepresentation or other abusive debt collection practices are
available for the effective collection of debts.
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
803. Definitions [15 USC 1692a]
As used in
this title --
term "Commission" means the Federal Trade Commission.
term "communication" means the conveying of information
regarding a debt directly or indirectly to any person through any medium.
term "consumer" means any natural person obligated or allegedly
obligated to pay any debt.
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.
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.
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 --
officer or employee of a creditor while, in the name of the creditor,
collecting debts for such creditor;
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;
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;
person while serving or attempting to serve legal process on any other
person in connection with the judicial enforcement of any debt;
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
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
term "location information" means a consumer's place of abode
and his telephone number at such place, or his place of employment.
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
collector communicating with any person other than the consumer for the
purpose of acquiring location information about the consumer shall --
identify himself, state that he is confirming or correcting location
information concerning the consumer, and, only if expressly requested,
identify his employer;
state that such consumer owes any debt;
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;
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
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]
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
(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
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.
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 --
advise the consumer that the debt collector's further efforts are being
notify the consumer that the debt collector or creditor may invoke
specified remedies which are ordinarily invoked by such debt collector or
applicable, to notify the consumer that the debt collector or creditor
intends to invoke a specified remedy.
notice from the consumer is made by mail, notification shall be complete
(d) For the
purpose of this section, the term "consumer" includes the
consumer's spouse, parent (if the consumer is a minor), guardian, executor,
806. Harassment or abuse [15 USC 1692d]
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.
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.
advertisement for sale of any debt to coerce payment of the debt.
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.
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
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:
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.
false representation of --
character, amount, or legal status of any debt; or
services rendered or compensation which may be lawfully received by any
debt collector for the collection of a debt.
false representation or implication that any individual is an attorney or
that any communication is from an attorney.
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
threat to take any action that cannot legally be taken or that is not
intended to be taken.
false representation or implication that a sale, referral, or other
transfer of any interest in a debt shall cause the consumer to --
any claim or defense to payment of the debt; or
become subject to any practice prohibited by this title.
false representation or implication that the consumer committed any crime
or other conduct in order to disgrace the consumer.
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.
use of any false representation or deceptive means to collect or attempt
to collect any debt or to obtain information concerning a consumer.
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.
false representation or implication that accounts have been turned over to
innocent purchasers for value.
false representation or implication that documents are legal process.
use of any business, company, or organization name other than the true
name of the debt collector's business, company, or organization.
false representation or implication that documents are not legal process
forms or do not require action by the consumer.
false representation or implication that a debt collector operates or is
employed by a consumer reporting agency as defined by section 603(f) of
808. Unfair practices [15 USC 1692f]
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:
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.
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
solicitation by a debt collector of any postdated check or other postdated
payment instrument for the purpose of threatening or instituting criminal
Depositing or threatening to deposit any postdated check or other
postdated payment instrument prior to the date on such check or
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.
or threatening to take any nonjudicial action to effect dispossession or
disablement of property if --
is no present right to possession of the property claimed as collateral
through an enforceable security interest;
is no present intention to take possession of the property; or
property is exempt by law from such dispossession or disablement.
Communicating with a consumer regarding a debt by post card.
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]
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 --
amount of the debt;
name of the creditor to whom the debt is owed;
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;
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
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.
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
810. Multiple debts [15 USC 1692h]
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
(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 --
which such consumer signed the contract sued upon; or
which such consumer resides at the commencement of the action.
in this title shall be construed to authorize the bringing of legal actions
by debt collectors.
812. Furnishing certain deceptive forms [15 USC
(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.
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 --
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
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.
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;
(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
(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.
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]
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.
Compliance with any requirements imposed under this title shall be enforced
8 of the Federal Deposit Insurance Act, in the case of --
national banks, by the Comptroller of the Currency;
member banks of the Federal Reserve System (other than national banks),
by the Federal Reserve Board; and
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
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;
Federal Credit Union Act, by the Administrator of the National Credit
Union Administration with respect to any Federal credit union;
subtitle IV of Title 49, by the Interstate Commerce Commission with
respect to any common carrier subject to such subtitle;
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;
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).
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
(a) Not later
than one year after the effective date of this title and at one-year
intervals thereafter, the