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Federal Reserve Bank of Dallas
D AL L AS . T E X A S
7 5 222
C i r c u l a r No. 78-37
A pril 7, 1978
THE FAIR DEBT COLLECTION PRACTICES ACT
TO ALL STATE MEMBER BANKS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
T h e Fair Debt Collection P r a c tic e s A ct w a s s i g n e d into law by P r e s i d e n t
C a r t e r on S e p te m b e r 20, 1977, a s T itle VIII of th e C o n s u m e r C r e d i t Protection Act.
T h e Act w e n t into effect on March 20, 1978, a n d is d e s i g n e d to elim inate a b u s i v e a nd
d e c e p tiv e d e b t collection p r a c t i c e s a n d to i n s u r e that r e p u t a b l e d e b t c ollectors a r e
not co m p e titiv e ly d i s a d v a n t a g e d .
G e n e r a lly , th e Act will a p p ly to s ta te m em ber b a n k s th a t r e g u l a r l y collect
defa u lte d d e b t s for o th e r in s titu ti o n s , in c lu d in g d e b ts for re c ip ro c a l s e r v i c e a g r e e
m ents. No re g u la tio n s will be i s s u e d u n d e r th e Act. H ow ever, the Federal R e s e r v e
Syste m h a s r e s p o n s i b i l i t y fo r e n fo rc e m e n t of the Act for state m em ber b a n k s .
A fact s h e e t, w hic h in c lu d e s a s e r i e s of q u e s ti o n s a n d a n s w e r s a n d the
A ct, h a s b e e n p r e p a r e d a n d is a tta c h e d for y o u r u s e . P le a se note th a t th is fact sheet
does not c o n s ti tu te a re g u la tio n b u t is is s u e d only in o r d e r to be helpful to b a n k s a n d
o t h e r s i n t e r e s te d in in s u r i n g co m plian ce with the Act. You sh o u ld a ls o be a w a r e that
c o n s u m e r exam ination s will in c lu d e an evaluation of a b a n k 's com pliance with the
Act.
Any q u e s ti o n s r e g a r d i n g the Fair Debt Collection P rac tic e s Act may be
d i r e c t e d to th e C o n s u m e r A ffairs S e c tio n , Bank S u p e r v is io n a n d R egulations D e p a rt
m ent, a t Ext. 6171 o r 6181.
S i n c e r e ly y o u r s ,
R obert H . Boykin
F i r s t Vice P r e s i d e n t
Attachm ent
Banks and others are encouraged to use the following incoming W A T S numbers in contacting this Bank:
1 -8 00 -492 -440 3 (intrastate) and 1 -8 00 -527 -497 0 (interstate). For calls placed locally, please use 651 plus
the extension referred to above.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
Fact
Sheet
I nc l ud i n g
Qu es ti ons and An sw er s
and
Statute
Fair Debt
C o l l e c t i o n Pr a ct ice s
Act
D e v e l o pe d
by I n t e r a g e n c y Staff Gr ou p
Board of G o v e r n o r s of the Federal Res er v e S ys L e m
C o m p t r o l l e r of the C u r r e n c y
Federal Deposit In s u ra n c e C o r p o r a t i o n
Ma rch
20,
1978
FACT SHEET
Banking
I ns t i t u t i o n s
and Fair Debt
C o l l e c t i o n P r a c ti c e s Act
BACKGROUND
The Fair Debt C o l l e c t i o n P ra c t ic e s Act (the Act), 15 U SC § 1692 et s e q .,
was signe d into law on Se p t em b e r 20, 1977, as Tit le VIII of the C o n s u m e r
Cred it Pr o te c t i o n Act.
The e f f e ct i ve date of the Act is Ma r c h 20, 1978.
It is d e s i gn e d to e l i m i n a t e ab us iv e and d e c e p t i v e debt c o l l e c t i o n
p r a c ti c es and to insure that r e p u t ab le debt c o l l e c t o r s are not
c o m p e t i t i v e l y di s ad v a n t a g e d .
COVERAGE
Not all persons or bu s in e s s e s who co lle ct debts are co ve r e d by the Act.
The Act de fi ne s "debt co l l ec t o r" as any p e r s o n w ho r e g u l a r l y c o l l e c t s or
at te m pt s to collect, d i r e c t l y or indirectly, c o n s u m e r debts a s s e r te d to
be ow e d to a n ot h e r person.
C o n s u m e r debt is debt i nc urr ed b y an i ndi vi du al
p r i m a r i l y for pe rsonal, family or h o u s e h o l d pu r p ose s.
Debts incurre d for
b u s i n e s s or a g r i c u l t u r a l
pu r p os e s
are not co ve red .
The Act is appli ca ble , for examp le , to banks whi ch r e g u l a r l y co ll e c t debts
for oth er u n r e la t e d i n sti tu ti ons , in cl u d in g c o l l e c t i o n s u nd er r e ci p r oc a l
se rvi ce agre em ent s.
T y p i c a l l y un der such an arr a n ge m e nt , a bank solici ts
the he l p of ano t h er ba n k in c o l l e c t i n g a d e f a u l t e d debt of a c u s t o m e r who
has relocat ed .
A ba nk would also be subject to the re q ui r e m e n t s of the
Act if it uses a name oth er than its o wn in its c o l l e c t i o n efforts.
A bank will not
be a debt
co ll e ct o r
subject
to the Act w h e n
it:
o
C oll ect s d e bt s due an ot he r on ly in i s ol a t e d
o
Collects,
o
Co ll e c ts
a debt wh ic h
o
Collects
a debt
o
Col l ec t s a debt o b t a i ne d as s e c u r i t y
tr an s a c t i o n in v ol vin g the bank.
for a c o m m e r c i a l credit
o
C o l le c ts a debt in ci de nta l to a b o n a
or e s c r o w ar r an ge me nt.
fide
o
Collects a debt for ano the r p er s on to w h o m it is rel a t ed by c o m m o n
o w n e r s h i p or c o r p o r a t e contro l, as long as it does so only for
those pe rsons to w h o m it is so relat ed.
H o w e v e r , if the b a n k
r e g u l a r l y c o l l e ct s d e f a u l t e d de b t s o we d a n o n - a f f i l i a t e person,
the bank will become a debt c o l l ec t o r for those d e f a u l t e d de bts
as well as for d e f a u l t e d d e bt s of a f f i l i a t e d en tities, but not
in the bank' s ow n name,
not
for its o w n debts.
d e bt s
instances.
owed to the bank.
it o r ig ina te d.
in def aul t
whe n ob tained.
f i d u c ia r y r e l a t i o n s h i p
-2-
Others who are not
covered
by the Act
are:
o
An o f fi c e r or employ ee of the bank wh e n c o ll e c ti n g ,
name, debts owed to the bank.
o
A t t o r n e y s - a t - l a w co l l ec t i n g
the bank.
o
Legal
process
debts
on be ha lf of and
in the bank's
in the name of
servers.
RE QU I R E M E N T S
The Act
requi res
debt
collectors:
o
To cease further c o m m u n i c a t i o n with a c o n su m er upon wri t t en
request, except to advise the co ns um er that the debt c ol le ct or' s
further efforts are being ter minated, or to no ti fy the consume r
that s pe ci fi ed remedies may or will be invoked.
o
To apply
o
If the fol low in g inf ormation is not provid ed at initial contact,
to n o t if y the consum er in writing, w i thi n five days of initial
contact, of the amount of the debt and the name of the creditor,
and to advi se the c o nsu me r of the debt co l le c t o r ' s dut y to verif y
the debt if it is disputed.
If the co ns u m er d i spu te s the debt
w i t h in 30 days, the debt co l le c t o r must stop c o l l e c t i o n efforts
until v e r i f i c a t i o n is sent to the consumer.
p a yme nts
in a cc o r da nc e with
the co n s um e r ' s
instructions.
PROHIBITIONS
The Act
prohibits:
o
A bu s e and Ha ras s m en t - e.g., t h r e a t e n i n g vi o le n c e
languag e in the c o ll ec t i o n of a debt.
o
False and M i s l e a d i n g R e p r e s e n t a t i o n - e.g.,
false credit information, or giving a false
d o c u m e n t s repre se nt legal process.
t h r e a t e n i n g to c om mu n ic a t e
i m p re s s i on that c ol l e c t i o n
o
Unfai r P ra ct ic es
by postcard.
checks,
Am ong
- e.g., m i s u s i n g
the a ct i vi t i es
sp e ci f i c a l l y
po s td ate d
pr o hi b i t e d
or using profane
or c o mm u n i c a t i n g
by the Act
are
o
With limited exceptions, contact with
in cl u di n g employers, except to obtai n
c o n c e r n i n g the con su me r ' s location.
third parties,
i n f or m a ti o n
o
C o m m u n i c a t i o n with the co ns u me r at place of em p l oy m e n t
if there is reas on to bel i e ve that the e m p l o ye r p r oh i b i ts
such com mu n ic a t io n s .
the
foll ow in g
-3o
Con ta ct wit h a c o n s u m e r at any u n u su a l
unless agre ed to by the con sum er.
time or place,
o
B r i n g i n g a debt c o l l e c t i o n a c t i o n in a j u r i s d i c t i o n
other than those pe r m it t e d by the Act.
CIVIL LIABILITY
Pr iv a te
civil
act io n must
be brought
w i t h i n one
year
from the da t e of the
violation.
In an ind iv i du al action, the debt c o l l e c t o r is liable for actual
d a m a g e s plus puniti ve dama ge s of up to $1,000.
In a class action, the debt
c o l l e c t o r is liable for actual damage s, as we ll as p u n i ti v e d a m a g e s up to
$ 1 , 0 00 for each named p l a i nt i f f and the lesser of 1% of net w o rt h or $500, 000
for all oth er class me m be r s .
ADMINISTRATIVE ENFORCEMENT
The ba nk r e g u l a t o r y ag en ci es are re s p on s i b l e for e n f o r c i n g the Act u n de r §8
of the Federal Dep o si t I n s u r a nc e Act.
This m e a n s that b a n k r e g u l a t o r s m a y use
their a u t h o r i t y un de r §8 to issue cease and desis t order s wh i c h m a y include
p r o v i s i o n s r e q u i ri n g a f f i r m a t i v e a ct i on to corr ec t c o n d i t i o n s r e s u l t i n g from
violations.
No r eg ul a t i o n s can be issued by any re gul at or, a l t ho u g h the
Fed era l Tr a d e C o m m i s s i o n has the a u t h o r i t y to issue a d v i s o r y opi nio ns.
Q U E S TI O NS AN D A N S W E R S
Fair Debt Co l le c t i o n Pr a c ti ce s Act
COV ER A GE
1.
R EF E RE NCE
Q:
When
is a bank a debt
collector?
A:
Gen er al l y , a bank that re g ul a r ly pa r t ic i p a t e s in
any a r r a ng e m en t, including re ci pr oca l service
ag re em en ts, with another person to collect
de fa u lt e d c o n s u m e r debts for that person, is a
debt c ol l e c t o r for those debts only.
§ 803(6)
In addition, if a bank uses a name other than its
own in c o l l e c t i n g its own co n su m e r debts, then it
is a debt c o l l e c to r for such debts as well.
2.
Y e s . If the bank is re la ted to the other i n st itu ti on
by co mm o n o w n e r s h i p or corp or at e control, it may
collect c o n su m er debts for that ins ti t ut i o n without
be co m in g a debt collector; provided, it collec ts
debts only for related institutions.
However, if
it r e g u la r ly collec ts de f a ult ed debts for n o n
aff iliates, it becomes a debt c o l l e ct o r for re g ul ar l y
collected, d e f a u l te d af filiate debts also.
Q:
Is a bank a debt co l l ect or if it c o lle cts a c on su mer
debt in an isolated instance for a n o n - r e l a t e d person?
A:
4.
May a bank ever r e gu lar ly collect for an other
without b e c o m i n g a debt collector?
A:
3.
Q:
No. A bank that collects in an isolated instance for
a n o n - a f f i l i a t e is not covered.
The bank must
collect for other s in the reg ul ar course of b us ine ss
before it bec om es a debt collector.
Q:
When is
A:
The Act does not define when a debt is in default.
In d e t e r m i n i n g whe t h er a debt is in default, the
following factors, among others, should be con sidered:
the bank's c u s t o m a r y policies and practices, terms
of the contract, d e t e r m i n a t i o n by the o r i gin at or , and
State law.
a debt
person
§ 8 0 3 ( 6 ) (B)
§ 803(6)
in default?
§ 803(6)(G)(iii)
-2-
5.
Q:
When does a ba n k r e gu lar ly collect
another?
debts
due
A:
The Act does not define the level of a c t iv i ty
wh ich will con st it ut e c ol lec tin g debts "r egu la rl y."
For purposes of examination, the foll owi ng are
among the factors that should be c o ns i d er e d in
d e t e r m i n i n g if the bank r e gu lar ly co ll ec ts third
pa rty debts:
§ 803(6)
W h e t h e r the bank has entered into a formal a g r e e
ment with another person to collect third party
debts, such as any recipro ca l service agr eement
program.
Wh et h e r the bank has e s tab lis he d pr oc edu res
for co ll ec tio n of third party debts.
The ratio of third party de f aul ted debts
colle cte d durin g the past 12 months to all
de fa u lt e d debts collected.
The amount of time the bank spends
party debt collection.
6.
Q:
Are banks that service mo r tg a g es
g e n e ra l ly debt co ll ectors?
in third
or student
loans
A:
8.
Q:
Are bank trust
A:
7.
No.
Banks are not debt c oll ect or s if they
service debts that they ori gi n at e d or debts
that were not in default wh en obtain ed by
the bank.
However, if a bank services a
loan portfolio, it is a debt co l l ect or for
those loans in the po r tfo li o that it did
not originate and which were in default when
obtained.
No.
The activi tie s of trust d e pa r t me n t s and
other bona fide fid uciary or escrow activit ie s
are exempt.
Q:
No.
§ 3 0 3 ( 6 ) (G)
( ii ), (iii)
Are banks debt co ll ec tor s if they collect c o n
sumer debts held as s ec uri ty for an e x te ns io n
of commercial credit?
A:
* *
d e p ar t m en ts debt coll ect ors ?
This ac t iv it y
is sp e c ifi cal ly exempted.
§ 8 0 3 ( 6 ) (G)(i)
§ 8 0 3 ( 6 ) (G)(iv'
-3-
9.
Q:
A:
Arp em pl oy e e s, office rs or a t t o rn e y s
c o n s i d e r e d debt colle cto rs ?
of a bank
No.
They are not debt c o l l e c t o r s so long as
they collect the bank's debts in the bank's
name.
§ 8 0 3 ( 6 ) (A)
T H I R D PA RTY C O M M U N I C A T I O N WHEN THE BA N K IS A C T I N G AS A DE B T C O L L E C T O R
10.
Q:
A
11,
May a bank c o m m u n i c a t e with persons other than
the c o n s u me r to d et er mi ne the location of the
consumer;
Y e s . However, the c o m m u n i c a t i o n must be limited
to locati on information.
L o c a t io n infor ma ti on
me an s a c o n s u m e r ' s place of residence, phone
nu mb e r or place of employment.
The bank may not
id en t i fy itself as a debt c o l l e c t o r and no th i n g
may be said c o n c e r n i n g debt co ll e c ti on .
May a bank disc us s
the consu me r?
A:
the debt with
anyone other
than
Yes.
However, the bank may contact only (1) its
own at torney, (2) the c o n su m e r' s attorney, (3) the
c r e d i t o r or c r e di t o r' s attorney, (4) co ns u me r
r e p o rt i ng ag encies, (5) the c on s u me r' s spouse,
parent (if the c ons um er is a minor), guardian,
executor, or a d m in i s tr a t or and (6) any other
person ob li ga t ed to pay the debt.
§ 805(b)
P R O H I B I T E D A C T I V I T I E S WHEN THE BA NK IS A C T I N G AS A DE B T C O L L E C T O R
12.
Q:
In general, what means of debt
p r o h i b i t e d from using?
collection
are banks
A:
The bank cannot threaten vi ol e nc e or harm, swear,
p u b li s h the c ons ume r' s name as an individ ua l who
a l l e g e d l y re fu se s to pay debts, a d v e r t is e the sale
o f the debt to coerce payment, make e x c e s s i ve
t e l e ph o ne calls or fail to d i s cl o s e the bank's
i d e n ti t y on the telephone.
A n y other action w hi ch
w o u l d n o r m a l l y harass, opp r e ss or abuse anyo ne is
prohibited.
§ 806
-4-
The bank also cannot make false r e p r e s e n t a t i o n
about itself, the debt, its righ ts or the
co ns u m e r ' s rights.
13.
May a bank contact
a co ns u me r
§ 807
at the co n su m e r' s
place of e m p l oy me n t?
A:
The bank m a y not contact a c o n su m er at the
c o n s u m e r ' s place of e m pl o y m e n t if it is against
the co n su m e r ' s wishe s or if the bank knows
or should k n o w that the e m p l o y e r forbids
such contacts.
May a bank contact a c o nsu mer who is re p re s e n t e d
by an at t o r n e y c o n c e r n i n g the debt?
14,
A
No.
However, the ba nk m a y contact the con s u me r
to o bt ai n the name and add res s of the attorney,
or if the a t t or n e y permits the contact
to re spond w i t h i n a re as o n a b l e time.
or
§ 805( a) (2 )
fails
May the bank be ma d e to stop c o m m u n i c a t i n g with
the co ns ume r c on c e r n i n g the debt?
15,
A
16,
§ 80 5(a)(3)
Yes.
If
that the
does not
the bank
However,
co ns u m e r
the c ons ume r no ti fi es the ba n k in w r i t i n g
c o n su me r ref u s es to pay the deb t or s im pl y
want any further contact wi th the bank,
must cease c o m m u n i c a t i o n wi th the consumer.
at that point the bank m a y still n o t i f y the
of its po ss ib le further ac ti on s.
Q
May the bank collect
an amount
§ 805(c)
in exc es s cf that
au th o ri z e d by the co nt ra ct or p e r m i t t e d
by State
law?
§ 808(1)
A:
18.
Q:
M a y the bank accept
A:
17.
No.
Yes.
However, the Act pr ov i d es v e r y
speci fi c
rule s for a c c e p t i n g these instru me nts .
Q:
May a postc ar d be used
A:
No.
po s t da te d
ins truments?
in c o l l e c t i o n
§ 80 8 ( 2) ( 3 )( 4 )
effort s?
§ 804(4)
§ 808(7)
-5-
19 .
Q:
M a y the b a n k t h r e at e n to r e p o s s e s s
A:
Yes.
However,
it ma y do so o n l y wh e n there
present right and
of the property.
20.
pr operty?
in t e nt i o n
is a
to take p o s s e s s i o n
Q:
M a y the b a n k use an e n v e l o p e that c o n t a i n s any
language or symbol i n di ca t in g debt c o l l e c t i o n
when c o m m u n i c a t i n g wi t h a con sum er?
A:
No.
§ 804(5)
§ 808(8)
R E Q U I R E M E N T S WH EN THE BANK
21.
IS A C T I N G AS A DEBT C O L L E C T O R
Q:
What must the bank do when
for the first time?
A
22.
S 808(6)
(see also
§ 803(6))
The bank must inform the c o n su m er of the amount
of the debt and name of the cre ditor, and pr ov ide
a sta tem ent that (1) the c o ns u m e r has 30 days to
disput e, in writing, tne v a l i d i t y of the debt and
(2) the co ns u me r may request the name of the
o r i g i n a l cr editor.
The bank must a l s o . p r o v i d e the
c o n s um e r wit h a statement of the p r o v i s i o n s for
d i s p u t i n g the debt.
If this i n f o r m a t i o n is not
gi ven to the consumer at the time of the initial
contac t, it must be su pp lie d in w r i t i n g or m a i le d
w i t h i n five days.
Q:
What
p r ov i s i o n s
are made
contacting
a consume r
for d i s p u t i n g
§ 809(a)
a c o n su m e r
debt ?
A:
The bank must
tell the co n s u m e r
that
if the
c o n s u m e r not if i es tne ba n k in w r i t i n g w i t h i n
30 days that the debt is p a r t i a l l y or w h o l l y
di sp u t ed , the bank will pr ovi de a v e r i f i c a t i o n
of the debt.
The bank must also inform the
c o n s u m e r that, if the c o n s u m e r m a k e s a
w r i t t e n request w i thi n 30 days, the bank will
s up p ly the name and add r e ss of the ori gi n al
c r e d it o r if it is di ff e r en t from the cu rrent
cred i t o r .
S 809(b)
-6 -
23.
Q:
If the c o n s u m e r d i s p u t e s the debt or re q u e st s
the name and add res s of the o r i g i na l cre ditor,
m a y the ba nk c o n t i nu e c o l l e c t i o n e ff o r t s ?
A:
No.
However, the ba nk m a y c o n t i n u e c o l l e c t i o n
eT fo r t s a f te r it pr ov id es the c o n s u m e r a co p y
of the w r i t t e n v e r i f i c a t i o n of the debt or
the name and ad dr es s of the o r i g i n a l cre ditor.
$ 809(b)
C O N S E Q U E N C E S OF N O N C O M P L I A N C E
24.
Q:
What
are the p o te n t ia l c o n s e a u e n c e s of
noncompliance
A:
with the Act?
In civil actions, in div id ua l c o n s u m e r s ma y
r e c o ve r actu al damages, court costs, a tt o r n e y ' s
fees, and puniti ve awards of up to $1,000.
Class
§ 813
action re c o ve r i es incl ude the ab ove for named
plaintiffs, and pu n it i v e awar ds of up to the
lesser of $500,000 or 1% of the b an k' s net
worth.
A d m i ni s tr at i ve
e n fo r c e m e n t
of the Act
for banks
ma y involve actions un d e r $8 of the F e de r al
Deposit In surance Act, in cl ud ing cease and
desist order s r e q u i r in g that act i o ns be taken
to rem ed y co nd it i o ns r e s u l t i n g from v i o l a t i o n s .
§ 814
PUBLIC LAW 95-109—SEPT. 20, 1977
CONSUMER CREDIT PROTECTION ACT,
AMENDMENTS
8 -IJS
S
O -
7 (« 1
7 T>
91 STAT. 874
PUBLIC LAW 95-109—SEPT. 20, 1977
Public Law 9 5 -1 0 9
95th Congress
An Act
Sept. 20. 1977
(H.R. 5294)
Consumer Credit
Protection Act,
amendments.
Fair Debt
Collection
Practices Act.
T " a m e n d ilit- <‘o n s u m e r C r e d i t P r o t e c t i o n Act tti p r o h i b i t a l l u s i v e p r a c t i c e s l>y
d e b t collector>.
/)'. it i iKiifid by t/u S, nut,- and Ilomc of L'r preset tativc.H of the
I'nit,;! Staten of America in Congress ii.ssenihJrd, That the Consumer
Credit Protection Act (l.'i T'.S.C. KiO] of •eq. is a mended by adding
at the end thereof the following new title:
■T1TLI-; V III—DEBT COLLECTION PRACTICES
•'S i t
■ s o l S h o rt title.
"SOJ. F in d in g s am i pur|m se.
•SOM
"S<M.
"NTi
"MK(.
"N>7.
"SOS.
"MW.
“ MIV
"M l.
■■■slU.
"M.'i
"M 4 .
" M 'i
"Mfi.
"M 7.
“MS.
15 USC 1601
note.
15 USC 1692.
I l e l in it io ns .
Acquisition of locution inform ation.
C o m m u n i c a t i o n in c o n n e c t i o n w i t h d e b t ce ll “ t i o n .
c
Iliirus-iueiit cr abuse.
I 'a l s e nr m i s l e a d i n g r e p r e s e n t a t i o n s .
t'nfair practices.
V a l i d a t i o n of d e b t s .
M u l t i p l e (lelits.
l,ega] a c t i o n s by d e b t co l l ec t o r s.
F u r n i s h i n g c e r t a i n d e c e p t i v e f o rm s .
Civil l i a b i l it y .
A d m in istrativ e enforcem ent.
R e p o r t s to C o n g r e s s by t h e C o m m is s i o n .
R e la tio n to S t a t e laws.
E x e m p tio n for S t a t e regulation.
Effective date.
Ҥ 801. Short title
"This title may be cited as the "Fair Debt Collection Practices Act’.
Ҥ 802. Findings and purpose
"(a) There is almndant evidence of thi use of abusive, deceptive,
and unfair debt collection practices by many debt collectors. Abusive
debt collection practices contribute to the number of personal bank
ruptcies. to marital instability, to the loss of jobs, and to invasions
of individual privacy.
"i l>) Existing laws and procedures foi redressing these injuries are
inadequate to protect consumers.
"(c) Means other than misrepresentation or other abusive debt col
lection 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 inter
state commerce.
"(e) It is the purpose of this title to eliminate abusive, debt collec
tion practices bv debt collectors, to insure that those debt collectors
who refrain from using abusive debt collet tion practices are not com
petitively disadvantaged, and to promote consistent State action to
protect consumers against debt collection abuses.
PUBLIC LAW 95-109—SEPT. 20, 1977
Ҥ803. Definitions
“ A s u s e d in t h i s t it 11’ “ ( 1 ) T i n 1 t e r m •( 'o m m i s s i o n ' m e a n s t h e
F ederal T ra d e
( 'o m m i s s i o n .
"( •J) T l i c t e r m Y o m m u n i r a t i o n " m e a n s t h e c o i n 1 y i n g n f in fo r
e
m a t i o n r e g a r d i n g a d e b t d i r e c t l y n r i n d i r e c t l y to a n \ p e r - o n
111 rou«r1 1 .'my m e d i u m .
1 lit- t e r m Y o n s i i m e r ' m e a n s a n y n a t u r a l p e r s o n o b l i g a t e d
n r a l l e g e d l y o b l i g a t e d t < p a y a n y d rl it .
>
" I I ) T i n ' t f t !i! Y r e d i t o r ' m e a n s a n y ]if rsoti w h o o i l e r s u r
e x t e n d s c r e d i t r r e a t m g a dot it n r to w h o iu a d e b t is inve d. b u t - 11< 11
t e r m d o e s tint i n c l u d e a n y p e r - o n In tlie e x t e n t t h a t lie re c e iv e s
a n a-siirn1 1ii'iit o r t r a n s f e r n f a delit in d e f a u l t sn le lv f u r tlie
p u r p o s e n f file i I it at i lig col leet inn n f -II, h del it f o r a n o t h e r .
**(•’>) I he t e r m *d eh t' m e a n s a n y nlil ig a t mil n r a l l e g e d n b l i g a
t m n n f a c o n s u m e r tn p a y m o n e y a r i s i n g n u t o f a t r a n s a c t i o n in
w h i c h t h e m o n e y , p r o p e r t y , i n s u r a n c e , n r s e r v ic e s w h i c h a r e t h e
s u b j e c t n f I he t r a n s a c t ion a r e p r i m a r i l y f o r p e r s o n a l , f a m i l y , o r
h n u s e h n l d p u r p o s e s , w h e t h e r o r n o t s i i d i u t i l i s a t i o n h a - lieen
r e d u c e d to j u d g m e n t .
“ ( t ' i T h e i c r i n 'd e b t c o l l e c t o r ' m e a n s a n v p e r s o n w h o use's a n y
in s tru m e n ta lity o f in te rsta te co m m erce or th e m a ils m an y b u s i
ness th e p r i n c i p a l p u r p o s e o f w h ic h is t h e c o l l e c t i o n o f a n y d e b t s ,
o r w h o r e g u l a r l y c o l le c t - o r a t t e m p t s t o c o l le c t , d i r e c t l y o r i n d i
r e c t l y . d e b t s o w e d o r d u e o r i t - s e r t e d t o lie o w e d o r d u e a n o t h e r .
Xot w i t h s t a n d i n g t h e e x c l u s io n p r o v i d e d by c l a u s e ( ( ! ) o f t h e
la st s e n t e n c e o f t h i s p a r a g r a p h , t h e t e r m i n c l u d e s a n y c r e d i t o r
w h o . in t h e p r o c e s s o f c o l l e c t i n g h i s o w n d e b t s , u se s a n y n a m e
o t h e r t h a n h i s o w n w h ic h w o u ld i n d i c a t e t h a t a t h i r d p e r s o n icol lei l ill” n r a 11 e m p t m g t o col lect sin h d e b t s. F o r t h e p u r p o s e , ot
se c t io n sn.s(Ci). s u c h t e r m a l s o i n c l u d e s a n y p e r s o n w h o iiecs a n y
i n s t r u m e n t a l i t y o f i n t e r s t a t e c o m m e r c e o r t h e m a i l s in a n v b u s i
ness t h e p i i nc i p a I pu i po se o f wli ich is t lie en f u r c e m e n t o f seen r it y
in t e r e s t s . T h e t e r m d o e s not include* " ( A ) a n y ollicer o r e m p l o y e e o f a c r e d i t o r w h i l e , m t h e
n a m e ol t h e c r e d i t o r , c o l l e c t i n g d e b t s f o r -n cli c r e d i t o r :
" ( U ) a n y p e r s o n w h i l e a c t i n g a s a delit c o l l e c t o r f o r
a n o t h e r p e r s o n , b o th o f w liom a r e r e l a t e d b y c o m m o n o w n e r
s h i p o r a ffiliated by c o r p o r a t e c o n t r o l , if t h e p e r s o n a c t i n g
a s a delit c o l l e c t o r d o e s s o o n l v f o r p e r s o n s t o w h o m it is so
r e l a t e d o r a ffiliated a n d if t h e p r i n c i p a l b u - i n e s s o f su c h
| >■ i son i- not t he co llect ion o f d e b t s ;
<
“ ( ( ’ ) a n y officer o r e m p l o y e e o f t h e I n i t c d S t a t e s o r a n y
S t a t e to t h e e x t e n t t h a t c o l l e c t i n g o r a t t e m p t i n g to collect
a n y delit is m t h e p e r f o r m a n c e o f h i - official d u t i e s :
" ( I ) ) a n y p e r s n n w h i l e - e r v i n g o r a t t e m p t i n g tn s e r v e
le g al p r o c e s s on a n y o t h e r p e r s o n in c o n n e c t i o n w i t h th e
j u d i c i a l en fo r c e in c u t o f a n v d e b t :
‘• ( E ) a n y n o n p r o l i t o r g a n i z a t i o n w h i c h , at t h e re<|Uest ol
c o n s u m e r s , p e r f o r m s b o n a lide c o n s u m e r c r e d i t c o u n s e l i n g
a n d a s s i s t s c o n s u m e r s in t h e l i q u i d a t i o n o f t h e i r d e b t s by
re c e iv in g p a y m e n ts fro m such c o n -u m e rs a n d d is tr i b u ti n g
such a m o u n ts to c r e d i t o r s :
‘‘(F) any attorney-at-law collecting a debt as an attorney
on liehalf of and in the name of a client; and
> ST AT. 875
1
5 USC 1692a.
91 STAT. 876
PUBLIC LAW 95-109—SEPT. 20, 1977
‘(G) 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 n commercial credit transaction
involving the creditor.
“ (7) T he te rm ‘location in f o r m a tio n ’ means a consumer's place
of abode and his telephone num ber at such place, o r his place o f
employment.
“ (S) T h e te r m ‘S t a t e ’ means any S tate , te r rito ry , o r possession
of the U nited States, the D istrict of Columbia, the Commonwealth
o f P u e r to Rico, o r any political subdivision o f any o f the fore
going.
15 USC 1692b.
Ҥ 804. Acquisition of location information
‘‘A ny debt collector c om m unicating with any person o th e r th a n the
consumer f o r th e purpose of acquiring location info rm a tio n about the
consumer shall—
“ (1) id entify himself, state t h a t he is confirming or correcting
location in fo rm a tio n concerning the consumer-, and, only if
expressly requested, identify his e m p lo y e r ;
“ (•2) not state t h a t such consumer owes any de bt;
“ (3) not communicate with a n y such person more th a n once
unless requested to do so by such person o r unless the debt collector
reasonably believes t h a t the e arlier response o f such person is
erroneous o r incomplete and th a t such person now has correct or
complete location i n f o r m a t i o n ;
“ (4) not comm unicate by post c a r d ;
not use an y language or symbol on any envelope o r in the
contents of any communication effected by the mails o r te legram
t h a t indicates th a t the debt collector is in the debt collection busi
ness or that the communication relates to the collection of a d e b t :
and
“ (C) a f te r the debt collector knows the consumer is represented
by an a tto rn e y w ith reg a rd to the subject debt a n d has knowledge
of. o r can readily ascertain, such a tto rn e y ’s name and address, not
communicate w ith any person other th a n t h a t a ttorney, unless the
a tto rn e y fails to respond w ithin a reasonable period of time to
comm unic ation from the debt collector.
15 USC 1692c.
Ҥ 805. Communication in connection with debt collection
“(a C o m m u n i c a t i o n With t h e C o n s u m e r ( t e n e r a i a y .— Without
)
the prior consent of the consumer given d r c y t the debt c l e t r
i e tl o
olco
or the express permission of a court of competent j r s i t o , a debt
uidcin
c l e t r may not communicate with a consumer i connection with
olco
n
the c l e t o of any debt—
olcin
“ (1) at a n y unusual tim e or place or a tim e or place known or
which should be known to be inconvenient to th e consumer. Tn
the absence of knowledge o f circumstances to the con tra ry , a debt
collector shall assume t h a t th e convenient tim e f o r com m unicating
w ith a consum er is a f te r 8 o’clock a n tim e rid ia n and before 9 o’clock
postm eridian, local tim e a t the c o n s u m e r s lo c a tio n ;
“ (2) if th e deb t collector knows the consumer is represented
by a n a tto rn ey with respect to such debt a n d has knowledge of,
o r can readily ascertain, such a tto r n e y ’s name a n d address, unless
PUBLIC LAW 95-109—SEPT. 20, 1977
91 STAT. 877
th e atto rn ey fails to respond w ithin a reasonable period of time
to a c om m unication from tin- dol)t collector o r unless the atto rn e y
consents to direct communication with the c o n s u m e r ; or
"(■5) at the c onsumer's place of em plo ym ent if the debt collector
knows o r has reason to know th a t the consumer's em ployer p r o
hibits I lie consumer from receiving such communication.
" ( b ) ( ' o M M r x i t a t i o n W i t h T i i i k k I’a k t i k s . E x c e p t a s p r o v i d e d
—
in s e c t io n s o l . w i t h o u t t h e p r i o r c o n s e n t o f t h e c o n s u m e r g i v e n d i r e c t l y
to t h e d e b t c o l l e c t o r , o r t h e e x p r e s s p e r m i s s i o n o l a c o u r t o f c o m p e t e n t
ju ris d ic tio n , o r a- re a so n a b ly necessary to effectuate a p o s tju d g m e n t
j u d i c i a l r e m e d y , a d e b t c o l l e c t o r m a y not c o m m u n i c a t e , in c o n n e c t i o n
w i t h t h e co llect ion o f a n y d e b t , w i t h any p e r s o n o t h e r t h a n t h e c o n
s u m e r . h is a t t o r n e y , a c o n s u m e r r e p o r t i n g a g e n c y if o t h e r w i s e p e r
m i t t e d b y la w . t h e c r e d i t o r , t h e a t t o r n e y o f t h e c r e d i t o r , o r t h e a t t o r n e y
o f th o d e b t c o l l e c t o r .
u (c) C k a s i n o C o m s h 'm c a t i o x . If a eon-um er notifies a debt col
—
lector in w ritin g th a t the consumer refuses to pay a debt or t h a t the.
consumer wishes the debt, collector to cease, f u r th e r communication
witli the consumer. the debt collector shall not communicate f u r th e r
with the consume!- with respect to such debt, except—
" ( 1 ) t o a d v i s e t h e c o n s u m e r t h a t t h e d e b t c o l le c t o r '.' f u r t h e r
efforts a re b e in g te r m in a te d :
"(•J) to n o tif y th e c o n s u m e r th a t th e d e b t co lle c to r o r c r e d i to r
m a y in v o k e specified rem ed ie s w h ic h a re o r d i n a r i l y in v o k e d by
such debt collector o r c re d ito r; or
“ (3) where applicable, to notify the consum er that the debt
collector or c re d ito r intends to invoke a specified remedy.
I f such notice from th e consumer is made by mail, notification shall be
complete upon receipt.
“ ( d ) F o r the purpose o f this section, the term ‘consumer' includes
th e consumer's spouse, p a re n t ( if the consumer is a m in o r ) , g u a rd ia n ,
executor, or a d m in istra to r.
Ҥ 806. Harassment or abuse
15 USC 1692d.
“ A debt collector may not engage in any conduct the na tura l con
sequence of which is to harass, oppress, o r abuse, any person in con
nection with the collection of a debt. W ith o u t lim itin g the general
application of the foregoing, the following conduct is a violation of
this scction:
“ (1) T h e use or th r e a t of use of violence o r o th e r crim inal
means to h a rm the physical person, rep u tatio n , o r p ro p e rty o f any
person.
“ (2) T he use of obscene or profane la nguage or language Un
n a tu ra l consequence of which is to abuse the h e a re r or reader.
“ (3) T he publication of a list of consumers who allegedly refuse,
to pay debts, except to a consumer r e p o r tin g agency or to persons
meeting the requirem ents of section f>0:’ ( f ) or (>04 (Ii) of this Act. 15 USC 1681a,
,
‘■(4 ) T he advertisement for sale o f any debt to coerce payment 1681b.
o f the debt.
“ (5) C a using a telephone to rin g or e n g a g in g any person in
telephone conversation repeatedly o r continuously with in tent to
annoy, abuse, or h a ra s s any person a t the called number.
“ (fi) E xcep t as provided in section 804. the placement o f tele
phone calls w ithout m eaningful disclosure o f the caller's identity.
Ҥ 807. False or misleading representations
“ A d ebt collector m a y n o t use any false, deceptive, o r m islead ing
representation or m eans in connection w ith the collection o f any debt.
15 USC 1692e.
91 STAT. 878
PUBLIC LAW 95-109— SEPT. 20, 1977
W i t h o u t l i m i t i n g tin* g e n e r a l a p p l i c a t i o n o t m e f o r g o i n g , t h e f o l l o w
i n g c o n d u c t is a v i o l a t i o n o f t h i s s e c t i o n :
“ (1) T he falso representation or implication t h a t the. debt col
lector is vouched for, bonded hy. o r affiliated with the I 'n i t e d
S ta te s o r any State, in c ludin g the use o f a n y badge, unifo rm , o r
facsimile thereof.
" ( 2 ) T h e false representation o f—
" ( A ) the character, am oun t, o r legal status of any d e b t: or
“ (H ) any service* rendered o r compensation which m ay be,
lawfully received by any debt collector f o r the collection of
a debt.
" ( 3 ) T he false rep resentation or im plication th a t any in d iv id
ual is an atto rney or th at an y com m unication is from an attorney.
" ( 4 ) The representation o r implication th a t no np a y m e n t of
any debt will result in the arrest or im prisonm ent of a n y person
<n the seizure, g a rn ish m e n t, a tta c h m e n t, or sale o f any p ro p e r ty
or wages of any person unless such action is lawful a n d the debt
collector or cre ditor intends to take such action.
■'(;">) T he th re at to take any action th a t cannot legally Ik* taken
or th a t is not intended to be taken.
"((I) T he false rep resentation or im plication th a t a sale,
re fe rra l, o r o th e r t r a n s f e r o f anv interest in a debt shall cause,
the consumer t o —
" ( A ) lose any claim or defense to p ay m e n t o f the d e b t : or
“ (H ) becomc subject to any practice p ro hibite d by this
title.
" ( 7 ) T he fa lsi rep resen tation or im plication th a t the consumer
com m itted any crime o r oilier conduct in o rd e r to disgrace the
consumer.
" ( S ) C om m u n ic atin g o r t h r e a te n in g to communicate to any
person credit in fo rm atio n which is know n or which should lie
known to be falsi*, in clu din g the failure to com municate th a t a
dispu ted debt is disputed.
" ( 0 ) T he Use or distrib u tio n o f any w ritten communication
which sim ulates or is falsely represented to be a document a u t h o r
ized. issued, o r a pproved by any court, official, or agency o f the
I 'n i t e d States or an y S tate , o r which creates a false impression
as to its source, auth o riz a tio n , or approval.
“‘( i n ) The use o f any false representation o r deceptive means
to collect o r a tte m p t to collect any debt or to obta in in fo rm a tio n
concerning a consumer.
“ (11) Except as o t h e r w i s e pro vid ed fo r com m unications to
acquire location in fo rm a tio n u n d e r section H04. the failure to d is
close clearly in all com m unication s m a d e to collect a debt o r to
obtain inform a tion al>out a consumer, th a t the debt collector is
a t te m p tin g to collect a debt and th a t any in fo rm a tio n obta ined
will be used for that purpose.
"(1:2) T he false representation or implication that accounts
have been tu rn e d over to innocent purchasers for value.
“ (13) T he falso representation or im plication th a t documents
are legal process.
“ (14) T he use of any business, com p any , o r organization name
o th e r th a n the tru e nam e o f the debt c o lle c to rs business, company,
or organization.
“ (l.r>) T h e false representation or im plication th a t documents
are not legal process fo rm s o r do not require action hy the
consumer.
PUBLIC LAW 95-109—SEPT. 20, 1977
(1 <>) T l i f fsiNe r e p r e s e n t n t i o n o r i m p l i c a t i o n t h a t a d e b t c o l
l e c t o r o p e r a t e s o r is e m p l o y e d by a c o n s u m e r r e p o r t i n g a g e h e y a s
d e f i n e d by seel ion (i(0 1 f ) n f t h i s A c t .
Ҥ808. Unfair practices
91 STAT. 879
15 USC 1681.
15 USC 1692f.
" A d e b t c o l l e c t o r m a y nol n-c u n f a i r o r n n e o n s c i o n a b l e m e a n - to
collect o r a t t e m p t t o co llect a n v d e b t . W i t h o u t l i m i t i n g t h e g e n e r a l
a p p l i c a t i o n o f t h e f o r e g o i n g , t i n 1 f o l l o w i n g c o n d u c t is a v i o l a t i o n ol
t Ii is s e c t io n :
“ ( 1) T h e c o l l e c t i o n n f a n y a m o u n t ( i n c l u d i n g a n y i n t e r e s t , foe.
c h a r g e , o r e x p e n s e i n c i d e n t a l to t h e p r i n c i p a l o h l i i r a t i n n i u n le s s
s u c h a m o u n t i- e x p r e s s I v a n t h n r i / o i I b y t lie a i r r e e m e n t croat i n i ' t he
d e b t o r pc ! mil te d b y la w .
“* ( - ) 1 he a c c e p t a n c e bv a d e b t c o l l e c t o r f r o m a n y p e r s o n ol ;t
c h e c k o r o t h e r p a v m e n t i n s t r u m e n t p o s t d a t e d b y m o r e t h a n live
d a y s u n le ss sui'h p e r s o n is not i Ii< 1 in w r it inir o f t lie d e b t collect o r s
-<
i n t e n t t o d e p o s i t s u c h c h e c k o r i n s t r u m e n t not m o r e t h a n te n n o r
loss t h a n t h r e i d i u s i n e s s il a v s p r i o r t o siK'h d e p o s i t .
I
Ile so lic it at ion b y a d e b t c o l l e c t o r o f a n v post d a to il c h e c k
o r o t h e r p o s t d a t e d p a y m e n t iiM r i u n e n t f o r t lie p u r p o s e o f t h r e a t
e n i n g o r inst it lit i n g c ri in m a I p r o s e c n t ion.
" ( 1 ) I t e posit in::' o r t h r e a t e n i n g tn d e p o s i t a n y ]»o stdated c h e c k
o r o t h e r p o s t d a t e d p a y m e n t i n s t r u m e n t p r i o r t o t h e d a t e on s u c h
check o r in s tru m e n t.
“ (/>) C a u sin < r c h a r g e s t o lie m a d e t o a n y p e r s o n f o r c o m m u n i c a
tio n s by co ncealm ent o f th e tru e p u rp o s e o f th e co m m u n ic atio n .
S u c h c h a r g e s i n c l u d e , b u t a r e not l i m i t e d to . c o l l e d t e l e p h o n e
c a l l s a n d t e l e g r a m fees.
“ (f>) T a k i n g o r t h r e a t e n i n g t o t a k e a n y n o n j u d i c i n l a c t i o n to
effect d i s p o s s e s s i o n o r d i s a b l e m e n t o f p r o p e r t y i f —
“ ( A ) t h e r e is no p r e s e n t r i g h t t o p o s s e s s io n o f I h e p r o p e r t y
claim ed as co lla te ra l th r o u g h an e n fo rc e a b le se c u r ity interest :
“ ( H ) t h e r e is n o p r e s e n t i n t e n t i o n t o t a k e p o s s e s s io n o f t h e
p ro p erty : or
" ( ( ’ ) t h e p r o p e r t y is e x e m p t b y la w f r o m s u c h d i s p o s s e s
sion o r d i s a b l e m e n t .
“ ( 7 ) ( ' o m m u n i e a t i n g w i t h a c o n s u m e r r e g a r d i n g a d e b t bv
post card.
“ (8) U s in g a n y la n g u a g e o r sy m bol, o th e r th a n th e debt c o l
l e c t o r 's a d d r e s s , on a n y e n v e l o p e w h e n c o m m u n i c a t i n g w i t h a
c o n s u m e r b y use o f t h e m a i l s o r b v t e l e g r a m , e x c e p t t h a t a d e b t
col le c t o r m a y u se h is b u s i n e s s n a m e i f s u c h n a m e d o e s n ot i n d i c a t e
t h a t h e is in t h e d e b t c o l le c t io n b u s i n e s s .
15 USC 1692r.
Ҥ 809. Validation of debts
‘‘ ( a ) W i t h i n five d a y s a f t e r t h e i n i t i a l c o m m u n i c a t i o n w i t h a c o n
s u m e r in c o n n e c t i o n w i t h t h e c o l le c t io n o f a n y d e b t , a d eb t c o l l e c t o r
s h a l l , u n l e s s t h e f o l l o w i n g i n f o r m a t i o n is c o n t a i n e d in t h e i n i t i a l c o m
m unication o r the consum er has paid the debt, send the co n su m er a
w r i t t e n n o ti c e c o n t a i n i n g —
“ (1) th e am o u n t o f th e d e b t;
“ ( 2 ) t h e n a m e o f t h e c r e d i t o r t o w h o m t h e d e b t is o w e d :
“ (3 ) a s ta te m e n t t h a t unless th e c o n su m e r, w ith in t h i r t y d a y s
a f t e r r e c e i p t o f t h e n o ti c e , d i s p u t e s (he v a l i d i t y o f t h e d e b t , o r a n y
p o r t i o n t h e r e o f , the. debt, w i l l be a s s u m e d t o l>o v a l i d b y t h e d e b t
co llecto r;
91 STAT. 880
PUBLIC LAW 95-109—SEPT. 20, 1977
"(4) a statement th a t if tin* consumer notifies the debt collector
in w ritin g within tin* th irty -d av period that the, debt, or any p o r
tion thereof, is disp uted, the delit collector will obtain verification
of the debt or a copy of a judg m ent against the consumer and a
copy o f such verification or judgment will he mailed to the con
sumer by the debt co lle c to r: and
"i.'i) a statement that, upon the consumer's w ritten request
within the th ir ty - d a y period, the debt collector will provide the
consumer with the name and address of the original creditor, if
different from the c urrent creditor.
" i b ) If the lo ibiiiner notifies the delit collector in w r itin g within
the ih irtv -d a v period descrilied in -ubscction (a) th a t the debt, or
anv portion thereof, is disputed, or th a t 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 a copy o f a judgment, or
the name and address of the original creditor, and a copy o f such
v i i ification or ju d g m e n t. o r name and address of the original creditor.
i~ mailed lo the consumer by the debt collector.
*•(<•) The failure of a consumer to dispute the validity of a debt
under this section may not lie construed by any court as an admission
of liability by the consumer.
15 USC 1692h.
810. Multiple debts
" I f any consumer owes multiple debts and makes any single p a y
ment to an y debt collector with respect to such debts, such debt col
lector may not ap p ly such paym ent to an y debt which is dispute d
by the consumer and. where applicable, shall a p p ly such paym ent in
accordance with the consumer'- d i r c a ions.
15 USC 1692i.
Ҥ 811. Legal actions by debt collectors
" ( a ) Any debt collector who brings any legal action on a debt
against any consumer shall —
" ( 1 ) in the case o f an action to enforce an interest in real p r o p
erty secur ing the consumer's obligation, b rin g such action only in
a judicial distric t or sim ila r legal e ntity in which such real
p ro p e rty is located : or
•*(•2) in the case o f an action not descrilied in p a r a g r a p h (1).
b rin g such action only in the judicial district or s im ila r iegal
e n tity —
" ( A ) in which such consumer signed the contract sued
u p o n : or
“ (H ) in which such c o n s n n e r resides at the commencement
of the action.
" ( b ) N o th in g in this title shall be construed to authorize the b r i n g
ing of legal actions by debt collectors.
15 USC 1692j.
Ҥ812. Furnishing certain deceptive forms
“ (a) It is unlaw ful to design, compile., and furnish any form k n o w
ing th a t such form would be used to create the false belief in a con
sumer that a i>erson othe r than tiie creditor of such consumer is
p a r tic ip a tin g in the collection of o r in an atte m pt to collect a debt
such consumer allegedly owes such creditor, when in fact such person is
not so partic ip a tin g .
‘‘ (b) Any person who violates this section shall be liable to th e same
extent and in the same m a n n e r as a debt collector is liable u n d e r sec
tion 81 f o r failure to comply with a provision o f th is title.
PUBLIC LAW 95-109— SEPT. 20, 1977
Ҥ 813. Civil liability
91 STAT. 881
15 USC 1692k.
“ (a) Except as otherw ise provided by this section. any debt col
lector who fails to comply with any provision of th is title with respect
to any person is liable to such person in an amount equal to the sum
of—
" ( 1 ) anv actual da m a ge sustained by such person as a result
of such f a i l u r e ;
“ (■2) ( A ) in the case of any action by an individual. M ic h a d d i
tional dam ag es a* the court may allow, but not exceeding S l . o i M i ;
or
"(B) in the case o f a class action, (i) such amount for each
named plaintiff as could b e recovered under M i b p a r a g r a p h ( A ) ,
and (ii) such am oun t as the court may allow for all o the r c l a s s
members, w ithout reg ard to a m inimum individual recovery, not
to exceed the lesser of
nr 1 per centum o f the net worth
of the d e b t collector ; and
"(!() in the case of anv successful action to enforce the fore
going liability, the costs of the action, together with a reasonable
a ttorney's fee as determ ined by the court. On a finding by the
court that an action under th is section was brought in bad faith
and for the purpose of harassm ent, the court may aw ard to the
defendant a tto rn e y 's fees reasonable in relation to the w ork
expended and costs.
“ (b) In d e te rm in in g the amount of liability in any action under
subsection ( a ) , the court shall consider, am o n g other relevant factors—
“ (1) in any individual action u n d e r subsection ( a ) (2) ( A ) , the
frequency and persistence of lioncompliance by the debt collector,
the n ature of such noncompliance, and the extent to which such
noncompliance was i n t e n tio n a l: or
•‘(•J) in any class action under sul>section (a )(2 )(H ). the fre
quency and iH>rsistence 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.
u(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 evi
dence that the violation was not intentional and resulted from a l>ona
fide error notwithstanding the maintenance of procedures reasonably
adapted to avoid any such error.
“ ( d ) A n action to enforce any liability created by th is title may l>e Jurisdiction.
b r o u g h t in any a p p ro p r ia te I ’nited S ta te s distric t court without re g ard
to the am ount in controversy, o r in anv othe r court o f competent j u r i s
diction, w ithin one year from the date on which the violation occurs.
“ (e) No provision of th is section im posing any liability shall ap p ly
to any act done o r omitted in good faith in co nform ity with any
advisory opinion of the Commission, n o tw ith sta n d in g th at a f te r such
act or omission has occurred, such opinion is amended, rescinded, or
determ ined by judicial or o the r a u th o r ity to be invalid for any reason.
IS USC 16921.
Ҥ 814. Administrative enforcement
“ (a) Compliance with this title shall be enforced by the Commis
sion, except to the extent that enforcement of the requirement* imposed
under this title is specifically committed to another agency under
subsection (b). For purpose of the exorcise by the Commission of its
functions and powers under the. Federal Trade Commission Act. a IS USC 58.
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
PUBLIC LAW 95-109—SEPT. 20, 1977
91 STAT. 882
15 USC 58.
12 USC 1818.
tla* Commission under the Federal T ra d e Commission Act arc a v a il
able to the Commission to enforce, compliance hy any person with this
title, irrespective of w hether that person is enframed in commerce or
meets any oth er jurisdictional tests in the Federal Ti-ade Commission
Act, in cluding the power to enforce the provisions of th is title in the
same m a n n e r as if the violation had lieen a violation of a F ed e ra l
T r a d e Commission tra d e regulation rule.
" ( b ) Compliance with any i eq uirrm cnts imposed under this title
shall In' enforced u n d e r —
" ( 1 ) section 8 o f the Federal Deposit Insurance Act. in the case
of —
12 USC 1464.
12 USC 1730.
12 USC 1426,
1437.
12 USC 1751.
49 USC 1301
note.
7 USC 181.
7 USC 226, 227.
15 USC 1692m.
"( A ) national banks, by the C o m p tro lle r of the C u rre n c y ;
“ ( H) member banks of the Federal Reserve System (o the r
th a n national b a n k s), by the Federal Reserve H oard: an d
" ( C ) banks the. deposits or accounts of which are insured
by the Federal Deposit Insurance C o rp oration ( o th e r th an
members o f the Federal Reserve S y s te m ), by the Hoard of
Directors o f the Federal Deposit Insurance C o rp o r a tio n ;
"(•J) section .■) ( tl) o f the Home Ow ners Loan Act o f I!):’:’, sec
tion 4i)T of the National H ousing Act. and sections (>(i) and 17
of the Fed eral Home I » a n Hank Act. by the Fe de ra l Home Loan
Hank Hoard ( ac tin g directly o r t h ro u g h the Federal Saving s and
Fjoan Insurance C o r p o r a tio n ), in the ease of any institution sub
ject to any o f those p ro v is io n s :
“ (.'») the Fe de ra l Credit Union Act. by the A d m in is tr a to r of
the National C redit Cnion A d m in istra tio n with respect to any
Federal credit union :
*' ( 4 ) the Acts to regulate commerce, by the I n te rs ta te Commerce
Commission with respect to any common c a r r ie r subject to those
Acts:
"(;->) the Federal A viation Act o f 1!).'> < by the Civil A eronautics
>,
Hoard with respect to any a ir c a r r ie r o r any foreign a ir c a rrie r
subject to th a t A c t : and
"(<>) the Packers and Sto c k y a rd s Act. lil'Jl (except as provided
in section 4IK o f th a t A c t), by the Secretary o f A g ric ultu re with
>
respect to any activities subject to th a t Act.
"( c ) F o r the purpose o f the exercise hy an y agency referred to in
subsection (b) o f its powers u n d e r anv Act referred to in th a t su b
section. a violation of any requirement imposed u n d e r th is title shall
be deemed to be a violation of a requirement imposed u n d e r th a t Act.
In addition to its powers u nde r anv provision o f law specifically
referivd to in subsection ( b ) . each of the agencies referred to in th a t
subsection may exercise, for the purpose o f en fo rc in g compliance with
any requirement imposed u nd er this title anv o th e r au th o rity con
ferred on it by law. except as provided in subsection ( d ).
" ( d ) N either the Commission nor any o the r agency referred to in
subsection (b) may p ro m u lg ate tra d e regulation rules o r other re g u la
tions w ith respect to the collection of debts by debt collectors as defined
in this title.
Ҥ 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 neces
sary or appropriate. In addition, each n*|>ort of the Commission shall
include its assessment of the extent to which compliance with this title
PUBLIC LAW 95-109—SEPT. 20, 1977
is being achieved and a summary of the enforcement actions taken by
the (.'ommission under section 814 of this title.
“ (b) In tlu* exercise of its functions under this title, the Commis
sion may obtain upon request the views of any other Federal agency
winch exercises enforcement functions under section 814 of this title.
Ҥ 816. Relation to State laws
91 STAT. 883
15 USC 1692n.
‘‘T h i s title docs not annul, alter, or affect,, o r e x em p t any person su b
ject to the provisions of this title from co m p ly in g w ith the laws o f any
S ta te with respect to debt collection practices, except to the extent
t h a t those laws arc inconsistent with any provision o f this title, and
then itnly to the extent of the incoiiMStcncv. F o r p u r p o s o of th is
section, a S ta te law is not inconsistent with this title if the protection
such law affords a n y consum er is g re a te r t h a n the protection provided
bv this title.
Ҥ 817. Exemption for State regulation
“The ('ommission 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 inqiosed by this title, and that there is adequate pro
vision for enforcement.
Ҥ 818. Effective date
“This title takes effect upon the expiration of six months after the
date of its enactment, but section 80D shall apply only with respect to
debts for which the initial attempt to collect occurs after such clfective
date.”.
Approved September 20, 1977.
LEGISLATIVE HISTORY:
HOUSE REPORT No. 9 5 -1 3 1 (Comm, on Banking, Finance, and Urban Affairs).
SENATE REPORT No. 9 5 - 3 8 2 (Comm, on Banking, Housing, and Urban Affairs).
CONGRESSIONAL RECORD, Vol. 123 (1977):
Apr. 4, considered and passed House.
Aug. 5, considered and passed Senate, amended.
Sept. 8, House agreed to Senate amendment.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 39:
Sept. 20, Presidential statement.
O
15 USC 1692o.
15 USC 1692
@FedFRASER