2092.) But since so many people do not know their rights, collectors violate them wholesale. Any debt collector who brings any legal action on a debt against any consumer shall --, (1) in the case of an action to enforce an interest in real property securing the consumer's obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or, (2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity --, (A) in which such consumer signed the contract sued upon; or. The statute's stated purposes are: to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an aven… (Pub. Existing laws and procedures for redressing these injuries are inadequate to protect consumers. (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. (c) Intent Multiple debts§811. House Report: No. (d) Interstate commerce (3) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication. § 1692 –1692p, approved on September 20, 1977 (and as subsequently amended) is a consumer protection amendment, establishing legal protection from abusive debt collection practices, to the Consumer Credit Protection Act, as Title VIII of that Act. (1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. 874, codified as 15 U.S.C. In addition, each report of the Bureau shall include its assessment of the extent to which compliance with this subchapter is being achieved and a summary of the enforcement actions taken by the Bureau under section 1692l of this title. 881; amended Pub. Communication in connection with debt collection§806. [35] However, under the sweeping reforms of the 2010 Dodd-Frank Act, the FDCPA is enforced primarily by the Consumer Financial Protection Bureau. Even still, both consumers and … 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. Subject to paragraph (2), a private entity shall be excluded from the definition of a debt collector, pursuant to the exception provided in section 1692a(6) of this title, with respect to the operation by the entity of a program described in paragraph (2)(A) under a contract described in paragraph (2)(B). The federal law, enacted in 1977 to curb abuses by third-party debt collection agencies, carries protections against harassment, threats, unwanted calls to the workplace and disclosing the existence of debts to friends and neighbors. (16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 1681a(f) of this title. 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. (d) Jurisdiction Exemption for State regulation§818. In determining the amount of liability in any action under subsection (a) of this section, the court shall consider, among other relevant factors --, (1) in any individual action under subsection (a)(2)(A) of this section, the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional; or. (iv) contacts any alleged offender referred to in subparagraph (A) for purposes of participating in a program referred to in such paragraph-- (1) a postdated check presented in connection with a payday loan, or other similar transaction, where the payee of the check knew that the issuer had insufficient funds at the time the check was made, drawn, or delivered; The FTC enforces the Fair Debt Collection Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts. (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. The Fair Debt Collection Practices Act (FDCPA), passed in 1977, is the first federal law to address abusive debt collection practices in the United States. (2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader. Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. (ii) conforms with the terms of the contract and directives of the State or district attorney; The Fair Debt Collection Practices Act, commonly referred to as the FDCPA, is a federal law that governs the actions of parties acting as third-party debt collectors for personal debts. (C) in the course of performing duties delegated to it by a State or district attorney under the contract, the private entity referred to in subparagraph (B)-- 1751 et seq. The term “check” has the same meaning as in section 5002(6) of title 12. (e) Advisory opinions of Bureau Enactment: Public Law 95-109 (September 20, 1977) (A) a State or district attorney establishes, within the jurisdiction of such State or district attorney and with respect to alleged bad check violations that do not involve a check described in subsection (b), a pretrial diversion program for alleged bad check offenders who agree to participate voluntarily in such program to avoid criminal prosecution; on Banking, Finance, and Urban Affairs). A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. In the federal tax case of Smith v. United States, the United States Court of Appeals for the Fifth Circuit stated that the taxpayer's: ". At the same time, a collection agency cannot disclose the debt of a consumer to anyone else. (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. This subchapter does not annul, alter, or affect, or exempt any person subject to the provisions of this subchapter 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 subchapter, and then only to the extent of the inconsistency. (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. There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. (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. The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts,[2] including the following: The Act requires debt collectors to do the following (among other requirements): The Federal Trade Commission originally had the authority to administratively enforce the FDCPA using its powers under the Federal Trade Commission Act. The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer. 95-382 (Comm. Section 604(3) has been renumbered as Section 604(a)(3). 181 et seq.] Case law has tackled this issue but has not yet resolved it. (11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action. Furnishing certain deceptive forms§813. (c) Agency powers Debt collection is a multi-billion dollar industry with more than 8,000 debt collection firms in the United States. (B) become subject to any practice prohibited by this subchapter. In addition, there are state laws that provide protections. [36], Aggrieved consumers may also file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney's fees, and court costs) from third-party debt collectors. 41 et seq. • Be it enacted hy the Senate and House of Representatives of the Consumer Credit United States of Anberica m Congress assembled.) (d) “Consumer” defined [44], The accounts receivable management industry has also raised concerns that the FDCPA contains contradictions that often lead to liability on the part of collection agencies in civil cases, especially when dealing with technology that did not exist when the law was written. U.S. debt collection agencies employ just under 130,000 people through about 4,900 agencies. §§ 1692-1692p. 99-361 (July 9, 1986) Public Law 95-109 95th Congress An Act Sept. 20, 1977 [H.R. It is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses. 2092 (2010) As a public service, the staff of the FTC has prepared this following complete text of the Fair Debt Collection Practices Act - §§1692-1692p. (a) Amount of damages An action to enforce any liability created by this subchapter 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. [7][8][9] The definitions and coverage have changed over time. Fair Debt Collection Practices Act (FDCPA) Congressional Research Service 2 their debt payments to creditors;12 and private entities that administer certain pretrial diversion programs for bad check offenders under a contract with a state or district attorney.13 The CFPB is a relatively new agency. (b) Disputed debts [37] The collector may, however, escape penalty if it shows that the violation (or violations) was unintentional and the result of a "bona fide error" that occurred despite procedures designed to avoid the error at issue. A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a). (4) part A of subtitle VII of title 49, by the Secretary of Transportation with respect to any air carrier or any foreign air carrier subject to that part; [40], Some consumer groups argue that the FDCPA does not go far enough, and does not provide sufficient deterrence against unscrupulous collection agencies. (12) The false representation or implication that accounts have been turned over to innocent purchasers for value. Civil liability§814. In 1977, Congress passed the federal Fair Debt Collection Practices Act (the “FDCPA” or “Act”) to prevent abusive, deceptive, and unfair debt collection practices by debt collectors. [45], For its part, the Federal Trade Commission (FTC) produces an annual report to Congress of its findings with respect to its FDCPA enforcement activities. 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. As a public service, the staff of the Federal Trade Commission (FTC) has prepared the following complete text of the Fair Debt Collection Practices Act. (2) a stop payment order where the issuer acted in good faith and with reasonable cause in stopping payment on the check; Shown Here: Introduced in Senate (03/04/1977) Fair Debt Collection Practices Act - Prohibits debt collectors from harassing or intimidating consumers in connection with the collection or attempted collection of any alleged debt arising from a consumer credit transaction. For purposes of this section, a State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection provided by this subchapter. Furnishing certain deceptive forms. The FDCPA's definitions of "consumers" and "debt" specifically restricts the coverage of the act to personal, family or household transactions. (6) after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney's name and address, not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to communication from the debt collector. Aug. 5, Senate considered and passed amended version of H.R. A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --. A check is described in this subsection if the check involves, or is subsequently found to involve-- [1] The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. (1) any actual damage sustained by such person as a result of such failure; (2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or, (B) in the case of a class action, (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and. Since it began accepting debt collection complaints through the en d of the calendar year, the CFPB has (c) Definitions For the purpose of the exercise by any agency referred to in subsection (b) of this section of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this subchapter shall be deemed to be a violation of a requirement imposed under that Act. (d) Rules and regulations Auto loans, home loans, medical bills, and credit card accounts are all considered personal debts. The Fair Debt Collection Practices Act (FDCPA), Pub. (a) Not later than one year after the effective date of this subchapter and at one-year intervals thereafter, the Bureau shall make reports to the Congress concerning the administration of its functions under this subchapter, including such recommendations as the Bureau deems necessary or appropriate. invocation of the Fair Debt Collection Act is entirely without merit, as the statute expressly excludes 'any officer or employee of the United States . (b) Factors considered by court Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall --. (a) Notice of debt; contents (7) The term "location information" means a consumer's place of abode and his telephone number at such place, or his place of employment. THE FAIR DEBT COLLECTION PRACTICES ACT As amended by Pub. (B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt. (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. Fair Debt Collection Practices Act (FDCPA) The Fair Debt Collection Practices Act is a consumer protection law passed by the U.S. Congress and signed into law by President Jimmy Carter in 1977. (a) In general(1) Treatment of certain private entities When a debt collector calls, it’s important to know your rights and what you need to do. [12], In Henson v. Santander Consumer USA Inc. the Supreme Court excluded collection companies that purchase consumer debt from the FDCPA when it unanimously held that a company may collect debts that it purchased for its own account without triggering the statutory definition of a "debt collector" under the Fair Debt Collection Practices Act. § 1692 –1692p, approved on September 20, 1977 (and as subsequently amended) is a consumer protection amendment, establishing legal protection from abusive debt collection practices, to the Consumer Credit Protection Act, as Title VIII of that Act. (3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 1681a(f) or 1681b(3)1 of this title. Exception for certain bad check enforcement programs operated by private entities§819. Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of --. 5511 et seq.]. In addition, the relevant U.S. Code citation is included with each section heading. (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. L. 95-109; 91 Stat. (v) includes as part of an initial written communication with an alleged offender a clear and conspicuous statement that-- These two requirements are at odds when a collector leaves a message on an answering machine or voicemail system. 111-203 (July 21, 2010), Office of Equal Employment Opportunity and Workplace Inclusion, Reporting Fraud, Waste, Abuse or Mismanagement, What You Need to Know About the Office of the Inspector General, Companies and People Banned From Debt Relief, Statute, Rules and Formal Interpretations, Post-Consummation Filings (HSR Violations), Retrospective Review of FTC Rules and Guides, Other Applications, Petitions, and Requests, Magnuson-Moss Warranty Public Audit Filings, International Technical Assistance Program, Competition & Consumer Protection Authorities Worldwide, Hearings on Competition & Consumer Protection, List a Number on the National Do Not Call Registry, § 802. The Fair Debt Collection Practices Act (FDCPA), Pub. The FDCPA, passed in 1977, establishes legal regulations and protection from abusive debt collection practices. ], by the Bureau, with respect to any person subject to this subchapter. 1987), Credit by Banks and Persons Other Than Brokers or Dealers for the Purpose of Purchasing or Carrying Margin Stock (Reg U), Financial Services Regulatory Relief Act of 2006, "Your Rights Under the Fair Debt Collection Practices Act (FDCPA)", "Your Rights Under California's Fair Debt Collection Practices Act", "Federal Trade Commission Staff Opinion Letter Dated Dec. 22, 1993 (", "Henson vs. Satander Consumer USA, 582 U.S. ___ (2017)", https://www.consumerfinancialserviceslawmonitor.com/wp-content/uploads/sites/501/2019/02/Barbato-v-Crown.pdf, "Bates v. C & S Adjusters, Inc., 980 F.2d 865 (1992)", "Consumer Price Index (estimate) 1800–", "Courts, Congress send mixed messages to debt collectors", "O'Connor v. Check Rite, Ltd., 973 F.Supp. The term “bad check violation” means a violation of the applicable State criminal law relating to the writing of dishonored checks. For the purpose of this section, the term "consumer" includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator. Short title§802. (6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if --. L. 111-203, title X, 124 Stat. (b) Authorization of actions 102-550 (October 28, 1992) (except as provided in section 406 of that Act [7 U.S.C. (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. 104-208 (September 30, 1996) Table of Contents§801. Please note that the format of the text differs in minor ways from the U.S. Code and West’s U.S. Code Annotated. 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 Bureau, 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. to administer the Fair Debt Collection Practices Act (“F DCPA”). First, in July 2013, the Bureau began accepting debt collection complaints. The FDCPA gives rules that third-party debt collectors have to follow when it comes to collecting debts. It is part of a larger law, the Consumer Credit Protection Act, enacted in 1977. (III) if the alleged offender notifies the private entity or the district attorney in writing, not later than 30 days after being contacted for the first time pursuant to clause (iv), that there is a dispute pursuant to this subsection, before further restitution efforts are pursued, the district attorney or an employee of the district attorney authorized to make such a determination makes a determination that there is probable cause to believe that a crime has been committed; and 1. (5) a check issued by a person who was not competent, or was not of legal age, to enter into a legal contractual obligation at the time the check was made, drawn, or delivered; or Definitions§804. seq. Harassment or abuse§807. 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 --. If such notice from the consumer is made by mail, notification shall be complete upon receipt. The Fair Debt Collection Practices Act (FDCPA) (15 USC 1692 et seq. Congressional findings and declaration of purpose§803. 102-242 (December 19, 1991) Effective date, This subchapter may be cited as the "Fair Debt Collection Practices Act.". (8) Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business. (15) The false representation or implication that documents are not legal process forms or do not require action by the consumer. The Bureau shall by regulation exempt from the requirements of this subchapter any class of debt collection practices within any State if the Bureau 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 subchapter, and that there is adequate provision for enforcement. While it appears that the legislation is meant to protect the consumer, its purpose was originally geared towards protecting debt collectors. §801. (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. 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. (a) Abusive practices This can include harassment, misleading representation, legal actions and deceptive practices. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce. (3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy. (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. (I) only as a result of any determination by the State or district attorney that probable cause of a bad check violation under State penal law exists, and that contact with the alleged offender for purposes of participation in the program is appropriate; and Paragraph (1) shall apply if-- L. 90–321, title VIII, § 813, as added Pub. Among many activities related to debt collection in the past year, three are particularly noteworthy. 101-73 (August 9, 1989) "[11] In 1998, however, Congress amended the Internal Revenue Code by adding a new section 6304, "Fair Tax Collection Practices," which refers to and includes certain rules that are similar to some provisions of the Fair Debt Collection Practices Act. 5294. The FDCPA was designed to protect consumers from misleading, abusive, and unjust collection practices performed by collectors. (a) Venue The federal fair debt collection practices act of 1977 dictates how A. frequently debt collectors can contact your employer regarding your unpaid dent B. much debt a person is allowed to carry C. debt collectors can interact with individuals D. much interest a lender can charge (4) The advertisement for sale of any debt to coerce payment of the debt. Although the staff has made every effort to transcribe the statutory material accurately, this compendium is intended as a convenience for the public and not a substitute for the text in the U.S. Code.