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Fair Debt Collection
Practices Act

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Fair Debt Collection
Practices Act

ApartmentsUSA red-blue horizontal rule

Fair Debt Collection Practices Act

TITLE VIII

DEBT COLLECTION PRACTICES

801. Short Title

802. Findings and Purpose

803. Definitions

804. Acquisition of location information

805. Communication in connection with debt collection

806. Harassment or abuse

807. False or misleading representations

808. Unfair Practices

809. Validation of Debts

810. Multiple debts

811. Legal actions by debt collectors

812. Furnishing certain deceptive forms

Section 801 Short Title

This title may be cited as the "Fair Debt Collection Practice Act."

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Section 802 Findings and Purpose

(a) There is an abundant evidence of the userís abusive, deceptive, and unfair debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to martial instability, to the loss of jobs, and to invasions of privacy.

(b) Existing laws and procedures for redressing these inquiries are inadequate to protect consumers.

(c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.

(d) Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce.

(e) It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.

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Section 803 Definitions

As used in this title-

(1) The term "Commission" means the Federal Trade Commission.

(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.

(3) The term "consumer" means any natural person obligated or allegedly obligated to pay any debt.

(4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

(5) The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails on 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 (G) 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(G), such term also includes any person who uses any instrumentality of interstate commerce or the mails on any business the principal purpose of which is the enforcement for security interest. The term does not include-

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of who are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for the persons to whom it is to related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors;

(F) any attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client; and

(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 a 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 a person as a secured party in commercial credit transaction involving the creditor.

(7) The term "location information" means a consumerís place of abode and his telephone number at such place, or his place of employment

(8) The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing.

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Section 804 Acquisition of Location Information

Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall -

(1) indemnify himself, state that he is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify his employer;

(2) not state that such consumer owes any debts;

(3) not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information;

(4) not communicate by postcard;

(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 of a debt; and

(6) after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorneyís 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 communicate with the debt collector.

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Section 805 Communication with Debt Collection

(a) Communication with the consumer generally, without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer with the collection for any debt-

(1) At any unusual item or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge or circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8am and before 9pm, local time at the consumerís location;

(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain such attorneyís 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 consumerís place of employment if the debt collector knows or has reason to know that the consumerís employer prohibits the consumer from receiving such communication.

(b) Communication with third parties. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post-judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any other person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

(c) Ceasing communication. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except-

(1) to advise the consumer that the debt collectorís further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specific remedy.

(d) For the purpose of this selection, the term "consumer" includes the consumerís spouse, parent (if the consumer is a minor), guardian, executor, or administrator.

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Section 806 Harassment or Abuse

A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of the section:

(1) The use or threat 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 the reader.

(3) The publication of a list of customers who allegedly refuse to pay debts, except a consumer reporting agency or to persons meeting the requirements of section 803(f) or 804(3) of this Act.

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging in any telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure to the callerís identity.

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Section 807 False or Misleading Representations

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.

Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.

(2) The false representation of-

(A) the character amount, or legal status of any debt, or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of debt.

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt with result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to-

(A) lose any claim or defense to payment of the debt; or

(B) become subject to any practices prohibited by this title

(7) The false representation or implication that the consumer committed any crime or any conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized issued, or approved by any court, official, or agency of the United States or any State, or which create a false impression as to its source, authorization, or approval.

(10) The use of any false representation or deceptive means to collect, or attempt to collect, any debt or to obtain information concerning a consumer.

(11) Except as otherwise provided for communication to acquire location information under section 804, failure to disclose clearly in all communications made to collect a debt or to obtain information about a consumer, that debt collector is attempting to collect a debt and that any information obtained will be used for that purpose.

(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.

(13) The false representation or implication the documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the debt collectorís business, company, or any other organization.

(15) The false representation or implication that documents are not legal process forms or do not require action by the consumer.

(16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 603(f) of this Act.

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Section 808 Unfair Practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of the section:

(1) The collection of any amount including any interest, fee, charge, or expense incidental to the expressly authorized by the agreement creating the debt or permitted by law.

(2) The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collectorís intent to deposit such a check or instrument not more than ten nor less than three business days prior to such deposit.

(3) The solicitation by a debt collector of any postdated check or other postdated payment instrument purpose of threatening or instituting criminal prosecution.

(4) Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.

(5) Causing charges to be made to any person for communications by the concealment of the true purpose of the communication. Such charges include, but are no limited to, collect telephone calls or telegram fees.

(6) Talking or threatening to take any non-judicial action to effect dispossession or disablement of the property if-

(A) there is no present right to the property claimed as collateral through an enforceable security interest;

(B) there is no present limitation to take possession of the property; or

(C) The property is exempt by law from such dispossession or disablement.

(7) Communicating with a consumer regarding a debt by postcard.

(8) Using any language or symbol, other than the debt collectorís 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 the debt collection business.

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Section 809 Validation of Debts

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication, or the consumer has paid the debt, send the consumer a written notice containing-

(1) the amount of the debt;

(2) the name of the creditor to whom it is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer by debt collector; and

(5) a statement that, upon the consumerís 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 or judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or the name and address of the original creditor, is mailed by the consumer by the debt collector.

(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

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Section 810 Multiple Debts

If any consumer owes multiple debts and makes any single payment to any debt collector with respect to such debts, such debt collector may not apply such payment to any debt which is disputed by the consumer, and, where applicable, shall not apply such payment in accordance with the consumerís directions.

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Section 811 Legal Actions by Debt Collectors

(a) Any debt collector who brings any legal action on a debt against any consumer shall-

(1) in case of any action to enforce an interest in real property securing the consumerís obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or

(2) in case of an action not described in paragraph (1), bring such action only in a judicial district or similar length entity-

(A) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the commencement of the action.

(b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt collectors.

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Section 812 Furnishing Certain Deceptive Forms

(a) It is unlawful to design, compile, and furnish any form knowing that such form would be used to create 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 the fact is such person is not so participating.

(b) Any person who violated this section shall be liable to the same extent and in the same manner as a debt collector is liable under section 813 for failure to comply with a provision of this title.

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