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THE FAIR DEBT
COLLECTION PRACTICES ACT
With Selected Portions of the FTC Staff Commentary
(Warning: The Official Commentary does not carry force of law,
and some portions have been superseded by conflicting court decisions. The
commentary is provided for informational purposes and not for business
guidance.)
§ 801. Short Title [15 U.S.C. § 1601]
This
title may be cited as the "Fair Debt Collection Practices Act."
§ 802. Congressional findings and declarations of purpose
[15 U.S.C. § 1692]
(a)
There is abundant evidence of the use of abusive, deceptive, and unfair debt
collection practices by many debt collectors. Abusive debt collection practices
contribute to the number of personal bankruptcies, to marital instability, to
the loss of jobs, and to invasions of individual privacy.
(b)
Existing laws and procedures for redressing these injuries 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.
§ 803. Definitions [15 U.S.C. § 1692a]
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 term does not include any person to
the extent that he receives an assignment or transfer of a debt in default
solely for the purpose of facilitating collection of such debt for another.
(5) The term "debt" means any obligation or alleged obligation of a consumer
to pay money arising out of a transaction in which the money, property,
insurance or services which are the subject of the transaction are primarily
for personal, family, or household purposes, whether or not such obligation
has been reduced to judgment.
(6) The term "debt collector" means any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of
which is the collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be owed or
due another. Notwithstanding the exclusion provided by clause (F) of the last
sentence of this paragraph, the term includes any creditor who, in the process
of collecting his own debts, uses any name other than his own which would
indicate that a third person is collecting or attempting to collect such
debts. For the purpose of section 808(6), such term also includes any person
who uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the enforcement of security
interests. The term does not include --
(A) any officer or employee of a creditor while, in the name of the
creditor, collecting debts for such creditor;
(B) any person while acting as a debt collector for another person, both of
whom are related by common ownership or affiliated by corporate control, if
the person acting as a debt collector does so only for persons to whom it is
so related or affiliated and if the principal business of such person is not
the collection of debts;
(C) any officer or employee of the United States or any State to the extent
that collecting or attempting to collect any debt is in the performance of
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; and
(F) any person collecting or attempting to collect any debt owed or due or
asserted to be owed or due another to the extent such activity (i) is
incidental to a bona fide fiduciary obligation or a bona fide escrow
arrangement; (ii) concerns a debt which was originated by such person; (iii)
concerns a debt which was not in default at the time it was obtained by such
person; or (iv) concerns a debt obtained by such person as a secured party
in a commercial credit transaction involving the creditor.
(7) The term "location information" means a consumer's place of abode and his
telephone number at such place, or his place of employment.
(8) The term "State" means any State, territory, or possession of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, or any
political subdivision of any of the foregoing.
FTC STAFF
COMMENTARY ON SECTION 803:
Section
803(1) defines "Commission" as the Federal Trade Commission.
1.
General. The definition includes only the Federal Trade Commission, not
necessarily the staff acting on its behalf.
Section
803(2) defines "communication" as the "conveying of information regarding a
debt directly or indirectly to any person through any medium."
1.
General. The definition includes oral and written transmission of
messages which refer to a debt.
2.
Exclusions. The term does not include formal legal action (e.g., filing
of a lawsuit or other petition/pleadings with a court; service of a
complaint or other legal papers in connection with a lawsuit, or activities
directly related to such service). Similarly, it does not include a notice
that is required by law as a prerequisite to enforcing a contractual
obligation between creditor and debtor, by judicial or nonjudicial legal
process.
The term
does not include situations in which the debt collector does not convey
information regarding the debt, such as:
 | A
request to a third party for a consumer to return a telephone call to the
debt collector, if the debt collector does not refer to the debt or the
caller's status as (or affiliation with) a debt collector.
|
| A
request to a third party for information about the consumer's assets, if
the debt collector does not reveal the existence of a debt.
|
| A
request to a third party in connection with litigation (e.g., requesting a
third party to complete a military affidavit that must be filed as a
prerequisite to enforcing a default judgment, if the debt collector does
not reveal the existence of the debt). |
Section
803(3) defines "consumer" as "any natural person obligated or allegedly
obligated to pay any debt."
1.
General. The definition includes only a "natural person" and not an
artificial person such as a corporation or other entity created by statute.
Section
803(4) defines "creditor" as "any person who offers or extends credit creating
a debt or to whom a debt is owed." However, the definition excludes a party
who "receives an assignment or transfer of a debt in default solely for the
purpose of facilitating collection of such debt for another."
1.
General. The definition includes the party that actually extended
credit or became the obligee on an account in the normal course of business,
and excludes [53 Fed. Reg. 50102] a party that was assigned a
delinquent debt only for collection purposes.
Section
803(5) defines "debt" as a consumer's "obligation . . . to pay money arising
out of a transaction in which the money, property, insurance, or services
(being purchased) are primarily for personal, family, or household purposes .
. .."
1.
Examples. The term includes:
|
Overdue obligations such as medical bills that were originally payable in
full within a certain time period (e.g., 30 days).
|
| A
dishonored check that was tendered in payment for goods or services
acquired or used primarily for personal, family, or household purposes.
|
| A
student loan, because the consumer is purchasing "services" (education)
for personal use. |
2.
Exclusions. The term does not include:
| Unpaid
taxes, fines, alimony, or tort claims, because they are not debts incurred
from a "transaction (involving purchase of) property . . . or services . .
. for personal, family or household purposes."
|
| A
credit card that a cardholder retains after the card issuer has demanded
its return. The cardholder's account balance is the debt.
|
| A
non-pecuniary obligation of the consumer such as the responsibility to
maintain adequate insurance on the collateral, because it does not involve
an "obligation . . . to pay money." |
Section
803(6) defines "debt collector" as a party "who uses any instrumentality of
interstate commerce or the mails in . . . collection of . . . debts owed . . .
another."
1.
Examples. The term includes:
|
Employees of a debt collection business, including a corporation,
partnership, or other entity whose business is the collection of debts
owed another. |
| A firm
that regularly collects overdue rent on behalf of real estate owners, or
periodic assessments on behalf of condominium associations, because it
"regularly collects . . . debts owed or due another."
|
| A
party based in the United States who collects debts owed by consumers
residing outside the United States, because he "uses . . . the mails" in
the collection business. The residence of the debtor is irrelevant.
|
| A firm
that collects debts in its own name for a creditor solely by mechanical
techniques, such as (1) placing phone calls with pre-recorded messages and
recording consumer responses, or (2) making computer-generated mailings.
|
| An
attorney or law firm whose efforts to collect consumer debts on behalf of
its clients regularly include activities traditionally associated with
debt collection, such as sending demand letters (dunning notices) or
making collection telephone calls to the consumer. However, an attorney is
not considered to be a debt collector simply because he responds to an
inquiry from the consumer following the filing of a lawsuit.
|
2.
Exclusions. The term does not include:
| Any
person who collects debts (or attempts to do so) only in isolated
instances, because the definition includes only those who "regularly"
collect debts. |
| A
credit card issuer that collects its cardholder's account, even when the
account is based upon purchases from participating merchants, because the
issuer is collecting its own debts, not those "owed or due another."
|
| An
attorney whose practice is limited to legal activities (e.g., the filing
and prosecution of lawsuits to reduce debts to judgment).
|
3.
Application of definition to creditor using another name. Creditors are
generally excluded from the definition of "debt collector" to the extent
that they collect their own debts in their own name. However, the term
specifically applies to "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" involved in the collection.
A
creditor is a debt collector for purposes of this act if:
| He
uses a name other than his own to collect his debts, including a
fictitious name. |
| His
salaried attorney employees who collect debts use stationery that
indicates that attorneys are employed by someone other than the creditor
or are independent or separate from the creditor (e.g., ABC Corp. sends
collection letters on stationery of "John Jones, Attorney-at-Law").
|
| He
regularly collects debts for another creditor; however, he is a debt
collector only for purposes of collecting these debts, not when he
collects his own debt in his own name. |
| The
creditor's collection division or related corporate collector is not
clearly designated as being affiliated with the creditor; however, the
creditor is not a debt collector if the creditor's correspondence is
clearly labeled as being from the "collection unit of the (creditor's
name)," since the creditor is not using a "name other than his own" in
that instance. |
Relation to other sections. A creditor who is covered by the FDCPA
because he uses a "name other than his own" also may violate section
807(14), which prohibits using a false business name. When he falsely uses
an attorney's name, he violates section 807(3).
4.
Specific exemptions from definition of debt collector.
(a)
Creditor employees. Section 803(6)(A) provides that "debt collector"
does not include "any officer or employee of a creditor while, in the name
of the creditor, collecting debts for such creditor."
The
exemption includes a collection agency employee, who works for a creditor
to collect in the creditor's name at the creditor's office under the
creditor's supervision, because he has become the de facto
employee of the creditor.
The
exemption includes a creditor's salaried attorney (or other) employee who
collects debts on behalf of, and in the name of, that creditor.
The
exemption does not include a creditor's former employee who continues to
collect accounts on the creditor's behalf, if he acts under his own name
rather than the creditor's.
(b)
Creditor-controlled collector. Section 803(6)(B) provides that "debt
collector" does not include a party collecting for another, where they are
both "related by common ownership or affiliated by corporate control, if
the (party collects) only for persons to whom it is so related or
affiliated and if the principal business of such person is not the
collection of debts."
The
exemption applies where the collector and creditor have "common ownership
or . . . corporate control." For example, a company is exempt when it
attempts to collect debts of another company after the two entities have
merged.
The
exemption does not apply to a party related to a creditor if it also
collects debts for others in addition to the related creditors.
(c)
State and federal officials. Section 803(6)(C) provides that "debt
collector" does not include any state or federal employee "to the extent
that collecting or attempting to collect any debt is in the performance of
his official duties."
The
exemption applies only to such governmental employees in the performance
of their "official duties" and, therefore, does not apply to an attorney
employed by a county government who also collects bad checks for local
merchants where that activity is outside his official duties. [53 Fed.
Reg. 50103]
The
exemption includes a state educational agency that is engaged in the
collection of student loans.
(d)
Process servers. Section 803(6)(D) provides that "debt collector"
does not include "any person while serving or attempting to serve legal
process on any other person in connection with the judicial enforcement of
any debt."
The
exemption covers marshals, sheriffs, and any other process servers while
conducting their normal duties relating to serving legal papers.
(e)
Non-profit counselors. Section 803(6)(E) provides that "debt
collector" does not include "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."
This
exemption applies only to non-profit organizations; it does not apply to
for-profit credit counseling services that accept fees from debtors and
regularly transmit such funds to creditors.
(f)
Miscellaneous. Section 803(6)(F) provides that "debt collector" does
not include collection activity by a party about a debt that "(i) is
incidental to a bona fide fiduciary obligation or . . . escrow
arrangement; (ii) . . . was originated by such person; (iii) . . . was not
in default at the time it was obtained by such person; or (iv) [was]
obtained by such person as a secured party in a commercial credit
transaction involving the creditor."
The
exemption (i) for bona fide fiduciary obligations or escrow arrangements
applies to entities such as trust departments of banks, and escrow
companies. It does not include a party who is named as a debtor's trustee
solely for the purpose of conducting a foreclosure sale (i.e., exercising
a power of sale in the event of default on a loan).
The
exemption (ii) for a party that originated the debt applies to the
original creditor collecting his own debts in his own name. It also
applies when a creditor assigns a debt originally owed to him, but retains
the authority to collect the obligation on behalf of the assignee to whom
the debt becomes owed. For example, the exemption applies to a creditor
who makes a mortgage or school loan and continues to handle the account
after assigning it to a third party. However, it does not apply to a party
that takes assignment of retail installment contracts from the original
creditor and then reassigns them to another creditor but continues to
collect the debt arising from the contracts, because the debt was not
"originated by" the collector/first assignee.
The
exception (iii) for debts not in default when obtained applies to parties
such as mortgage service companies whose business is servicing current
accounts.
The
exemption (iv) for a secured party in a commercial transaction applies to
a commercial lender who acquires a consumer account that was used as
collateral, following default on a loan from the commercial lender to the
original creditor.
(g)
Attorneys. A provision of the FDCPA, as enacted in 1977 (former
section 803(6)(F)), providing that "debt collector" does not include "any
attorney-at-law collecting a debt as an attorney on behalf of and in the
name of a client," was repealed by Pub. L. 99-361, which became effective
in July 1986. Therefore, an attorney who meets the definition set forth in
section 803(6) is now covered by the FDCPA.
Section
803(7) defines "location information" as "a consumer's place of abode and his
telephone number at such place, or his place of employment."
This
definition includes only residence, home phone number, and place of
employment. It does not cover work phone numbers, names of supervisors and
their telephone numbers, salaries or dates of paydays.
Section
803(8) defines "state" as "any State, territory, or possession of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, or any
political subdivision of any of the foregoing."
§ 804. Acquisition of location information
[15 U.S.C. § 1692b]
Any debt
collector communicating with any person other than the consumer for the purpose
of acquiring location information about the consumer shall --
(1)
identify 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 debt;
(3) not
communicate with any such person more than once unless requested to do so by
such person or unless the debt collector reasonably believes that the earlier
response of such person is erroneous or incomplete and that such person now
has correct or complete location information;
(4) not
communicate by post card;
(5) not use
any language or symbol on any envelope or in the contents of any communication
effected by the mails or telegram that indicates that the debt collector is in
the debt collection business or that the communication relates to the
collection of a debt; and
(6) after
the debt collector knows the consumer is represented by an attorney with
regard to the subject debt and has knowledge of, or can readily ascertain,
such attorney's name and address, not communicate with any person other than
that attorney, unless the attorney fails to respond within a reasonable period
of time to the communication from the debt collector.
FTC STAFF
COMMENTARY ON SECTION 804:
Section 804
requires a debt collector, when communicating with third parties for the
purpose of acquiring information about the consumer's location to (1)
"identify himself, state that he is confirming or correcting location
information concerning the consumer, and, only if expressly requested,
identify his employer"; (2) not refer to the debt, (3) usually make only a
single contact with each third party, (4) not communicate by post card, (5)
not indicate the collection nature of his business purpose in any written
communication, and (6) limit communications to the consumer's attorney, where
the collector knows of the attorney, unless the attorney fails to respond to
the communication.
1.
General. Although the FDCPA generally protects the consumer's privacy by
limiting debt collector communications about personal affairs to third
parties, it recognizes the need for some third party contact by collectors
to seek the whereabouts of the consumer.
2.
Identification of debt collector (Section 804(1)). An individual employed by
a debt collector seeking location information must identify himself, but
must not identify his employer unless asked. When asked, however, he must
give the true and full name of the employer, to comply with this provision
and avoid a violation of section 807(14).
An
individual debt collector may use an alias if it is used consistently and if
it does not interfere with another party's ability to identify him (e.g.,
the true identity can be ascertained by the employer).
3.
Referral to debt (Section 804(2)). A debt collector may not refer to the
consumer's debt in any third party communication seeking location
information, including those with other creditors.
4.
Reference to debt collector's business (Section 804(5)). A debt collector
may not use his actual name in his letterhead or elsewhere in a written
communication seeking location information, if the name indicates collection
activity (such as a name containing the word "debt," "collector," or
"collection"), except when the person contacted has expressly requested that
the debt collector identify himself.
5.
Communication with consumer's attorney (Section 804(6)). Once a debt
collector learns a consumer is represented by an attorney in connection with
the debt, he must confine his request for location information to the
attorney. (See also comments on section 805(a)(2).)
§ 805. Communication in connection with debt
collection [15 U.S.C. § 1692c]
(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 in connection with the collection of any debt --
(1) at any
unusual time or place or a time or place known or which should be known to be
inconvenient to the consumer. In the absence of knowledge of circumstances to
the contrary, a debt collector shall assume that the convenient time for
communicating with a consumer is after 8 o'clock antimeridian and before 9
o'clock postmeridian, local time at the consumer's 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 attorney's
name and address, unless the attorney fails to respond within a reasonable
period of time to a communication from the debt collector or unless the
attorney consents to direct communication with the consumer; or
(3) at the
consumer's place of employment if the debt collector knows or has reason to
know that the consumer's employer prohibits the consumer from receiving 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 postjudgment judicial remedy, a debt collector may not
communicate, in connection with the collection of any debt, with any person
other than a consumer, his attorney, a consumer reporting agency if otherwise
permitted by law, the creditor, the attorney of the creditor, or the attorney of
the debt collector.
(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 collector's 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 specified remedy.
If such
notice from the consumer is made by mail, notification shall be complete upon
receipt.
(d) 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.
FTC STAFF
COMMENTARY ON SECTION 805:
Section
805(a) -- Communication with the consumer. Unless the consumer has
consented or a court order permits, a debt collector may not communicate with
a consumer to collect a debt (1) at any time or place which is unusual or
known to be inconvenient to the consumer (8AM-9PM is presumed to be
convenient), (2) where he knows the consumer is represented by an attorney
with respect to the debt, unless the attorney fails to respond to the
communication in a reasonable time period, or (3) at work if he knows the
consumer's employer prohibits such contacts.
1.
Scope. For purposes of this section, the term "communicate" is given
its commonly accepted meaning. Thus, the section applies to contacts with
the consumer related to the collection of the debt, whether or not the debt
is specifically mentioned. [53 Fed. Reg. 50104]
2.
Inconvenient or unusual times or places (Section 805(a)(1)). A debt
collector may not call the consumer at any time, or on any particular day,
if he has credible information (from the consumer or elsewhere) that it is
inconvenient. If the debt collector does not have such information, a call
on Sunday is not per se illegal.
3.
Consumer represented by attorney (Section 805(a)(2)). If a debt
collector learns that a consumer is represented by an attorney in connection
with the debt, even if not formally notified of this fact, the debt
collector must contact only the attorney and must not contact the consumer.
A debt
collector who knows a consumer is represented by counsel with respect to a
debt is not required to assume similar representation on other debts;
however, if a consumer notifies the debt collector that the attorney has
been retained to represent him for other debts placed with the debt
collector, the debt collector must deal only with that attorney with respect
to such debts.
The
creditor's knowledge that the consumer has an attorney is not automatically
imputed to the debt collector.
4.
Calls at work (Section 805(a)(3)). A debt collector may not call the
consumer at work if he has reason to know the employer forbids such
communication (e.g., if the consumer has so informed the debt collector).
Section
805(b) -- Communication with third parties. Unless the consumer
consents, or a court order or section 804 permits, "or as reasonably necessary
to effectuate a postjudgment judicial remedy," a debt collector "may not
communicate, in connection with the collection of any debt, with any person
other than the 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."
1.
Consumer consent to the third party contact. The consumer's consent
need not be in writing. For example, if a third party volunteers that a
consumer has authorized him to pay the consumer's account, the debt
collector may normally presume the consumer's consent, and may accept the
payment and provide a receipt to the party that makes the payment. However,
consent may not be inferred only from a consumer's inaction when the debt
collector requests such consent.
2.
Location information. Although a debt collector's search for
information concerning the consumer's location (provided in section 804) is
expressly excepted from the ban on third party contacts, a debt collector
may not call third parties under the pretense of gaining information already
in his possession.
3.
Incidental contacts with telephone operator or telegraph clerk. A debt
collector may contact an employee of a telephone or telegraph company in
order to contact the consumer, without violating the prohibition on
communication to third parties, if the only information given is that
necessary to enable the collector to transmit the message to, or make the
contact with, the consumer.
4.
Accessibility by third party. A debt collector may not send a written
message that is easily accessible to third parties. For example, he may not
use a computerized billing statement that can be seen on the envelope
itself.
A debt
collector may use an "in care of" letter only if the consumer lives at, or
accepts mail at, the other party's address.
A debt
collector does not violate this provision when an eavesdropper overhears a
conversation with the consumer, unless the debt collector has reason to
anticipate the conversation will be overhead.
5.
Non-excepted parties. A debt collector may discuss the debt only with
the parties specified in this section (consumer, creditor, a party's
attorney, or credit bureau). For example, unless the consumer has authorized
the communication, a collector may not discuss the debt (such as a
dishonored check) with a bank, or make a report on a consumer to a
non-profit counseling service.
6.
Judicial remedy. The words "as reasonably necessary to effectuate a
postjudgment judicial remedy" mean a communication necessary for execution
or enforcement of the remedy. A debt collector may not send a copy of the
judgment to an employer, except as part of a formal service of papers to
achieve a garnishment or other remedy.
7.
Audits or inquiries. A debt collector may disclose his files to a
government official or an auditor, to respond to an inquiry or conduct an
audit, because the disclosure would not be "in connection with the
collection of any debt."
8.
Communications by attorney debt collectors. An attorney who represents
either a creditor or debt collector that has previously tried to collect an
account may communicate his efforts to collect the account to the debt
collector. Because the section permits a debt collector to communicate with
"the attorney of the creditor, or the attorney of the debt collector,"
communications between these parties (even if the attorney is also a debt
collector) are not forbidden.
An
attorney may communicate with a potential witness in connection with a
lawsuit he has filed (e.g., in order to establish the existence of a debt),
because the section was not intended to prohibit communications by attorneys
that are necessary to conduct lawsuits on behalf of their clients.
Section
805(c) -- Ceasing communication. Once a debt collector receives
written notice from a consumer that he or she refuses to pay the debt or wants
the collector to stop further collection efforts, the debt collector must
cease any further communication with the consumer except "(1) to advise the
consumer that the debt collector's 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 specified remedy."
1.
Scope. For purposes of this section, the term "communicate" is given
its commonly accepted meaning. Thus, the section applies to any contact with
the consumer related to the collection of the debt, whether or not the debt
is specifically mentioned.
2.
Request for payment. A debt collector's response to a "cease
communication" notice from the consumer may not include a demand for
payment, but is limited to the three statutory exceptions.
Section
805(d) -- "consumer" definition. For section 805 purposes, the term
"consumer" includes the "consumer's spouse, parent (if the consumer is a
minor), guardian, executor, or administrator."
1.
Broad "consumer" definition. Because of the broad statutory definition
of "consumer" for the purposes of this section, many of its protections
extend to parties close to the consumer. For example, the debt collector may
not call the consumer's spouse at a time or place known to be inconvenient
to the spouse. Conversely, he may call the spouse (guardian, executor, etc.)
at any time or place that would be in accord with the limitations of section
805(a).
§ 806.
Harassment or abuse [15 U.S.C.
§ 1692d]
A debt
collector may not engage in any conduct the natural consequence of which is to
harass, oppress, or abuse any person in connection with the collection of a
debt. Without limiting the general application of the foregoing, the following
conduct is a violation of this section:
(1) The use
or threat of use of violence or other criminal means to harm the physical
person, reputation, or property of any person.
(2) The use
of obscene or profane language or language the natural consequence of which is
to abuse the hearer or reader.
(3) The
publication of a list of consumers who allegedly refuse to pay debts, except
to a consumer reporting agency or to persons meeting the requirements of
section 603(f) or 604(3)1
of this Act.
(4) The
advertisement for sale of any debt to coerce payment of the debt.
(5) Causing
a telephone to ring or engaging any person in telephone conversation
repeatedly or continuously with intent to annoy, abuse, or harass any person
at the called number.
(6) Except
as provided in section 804, the placement of telephone calls without
meaningful disclosure of the caller's identity.
FTC STAFF
COMMENTARY ON SECTION 806:
Section 806
prohibits a debt collector from any conduct that would "Harass, oppress, or
abuse any person in connection with the collection of a debt." It provides six
examples of harassment or abuse.
1.
Scope. Prohibited actions are not limited to the six subsections listed
as [53 Fed. Reg. 50105] examples of activities that violate this
provision.
2.
Unnecessary calls to third parties. A debt collector may not leave
telephone messages with neighbors when the debt collector knows the
consumer's name and telephone number and could have reached him directly.
3.
Multiple contacts with consumer. A debt collector may not engage in
repeated personal contacts with a consumer with such frequency as to harass
him. Subsection (5) deals specifically with harassment by multiple phone
calls.
4.
Abusive conduct. A debt collector may not pose a lengthy series of
questions or comments to the consumer without giving the consumer a chance
to reply. Subsection (2) deals specifically with harassment involving
obscene, profane, or abusive language.
Section
806(1) prohibits the "use or threat of use of violence or other criminal means
to harm . . . any person."
1.
Implied threat. A debt collector may violate this section by an implied
threat of violence. For example, a debt collector may not pressure a
consumer with statements such as "We're not playing around here--we can play
tough" or "We're going to send somebody to collect for us one way or the
other."
Section
806(2) prohibits the use of obscene, profane, or abusive language.
1.
Abusive language. Abusive language includes religious slurs, profanity,
obscenity, calling the consumer a liar or a deadbeat, and the use of racial
or sexual epithets.
Section
806(3) prohibits the "publication of a list of consumers who allegedly refuse
to pay debts," except to report the items to a "consumer reporting agency," as
defined in the Fair Credit Reporting Act or to a party otherwise authorized to
receive it under that Act.
Section
806(4) prohibits the "advertisement for sale of any debt to coerce payment of
the debt."
1.
Shaming prohibited. These provisions are designed to prohibit debt
collectors from "shaming" a customer into payment, by publicizing the debt.
2.
Exchange of lists. Debt collectors may not exchange lists of consumers
who allegedly refuse to pay their debts.
3.
Information to creditor subscribers. A debt collector may not
distribute a list of alleged debtors to its creditor subscribers.
4.
Coded lists. A debt collector that publishes a list of consumers who
have had bad debts, coded to avoid generally disclosing the consumer's
identity (e.g., showing only the drivers license number and first three
letters of each consumer's name) does not violate this provision, because
such publication is permitted under the Fair Credit Reporting Act.
5.
List for use by investigator. A debtor collector does not violate these
provisions by providing a list of consumers against whom judgments have been
entered to a private investigator in order to locate such individuals,
because section 805(b) specifically permits contacts "reasonably necessary
to effectuate a post-judgment judicial remedy."
6.
Public notice required by law. A debt collector does not violate these
provisions by providing public notices that are required by law as a
prerequisite to enforcement of a security interest in connection with a
debt.
Section
806(5) prohibits contacting the consumer by telephone "repeatedly or
continuously with intent to annoy, abuse, or harass any person at the called
number."
1.
Multiple phone calls. "Continuously" means making a series of telephone
calls, one right after the other. "Repeatedly" means calling with excessive
frequency under the circumstances.
Section
806(6) prohibits, except where section 804 applies, "the placement of
telephone calls without meaningful disclosure of the caller's identity."
1.
Aliases. A debt collector employee's use of an alias that permits
identification of the debt collector (i.e., where he uses the alias
consistently, and his true identity can be ascertained by the employer)
constitutes a "meaningful disclosure of the caller's identity."
2.
Identification of caller. An individual debt collector must disclose
his employer's identity, when discussing the debt on the telephone with
consumers or third parties permitted by section 805(b).
3.
Relation to other sections. A debt collector who uses a false business
name in a phone call to conceal his identity violates section 807(14), as
well as this section.
§ 807. False or misleading representations
[15 U.S.C. § 1692e]
A debt
collector may not use any false, deceptive, or misleading representation or
means in connection with the collection of any debt. Without limiting the
general application of the foregoing, the following conduct is a violation of
this section:
(1) The
false representation or implication that the debt collector is vouched for,
bonded by, or affiliated with the United States or any State, including the
use of any badge, uniform, or facsimile thereof.
(2) The
false representation of --
(A) the
character, amount, or legal status of any debt; or
(B) any
services rendered or compensation which may be lawfully received by any debt
collector for the collection of a debt.
(3) The
false representation or implication that any individual is an attorney or that
any communication is from an attorney.
(4) The
representation or implication that nonpayment of any debt will result in the
arrest or imprisonment of any person or the seizure, garnishment, attachment,
or sale of any property or wages of any person unless such action is lawful
and the debt collector or creditor intends to take such action.
(5) The
threat to take any action that cannot legally be taken or that is not intended
to be taken.
(6) The
false representation or implication that a sale, referral, or other transfer
of any interest in a debt shall cause the consumer to --
(A) lose
any claim or defense to payment of the debt; or
(B)
become subject to any practice prohibited by this title.
(7) The
false representation or implication that the consumer committed any crime or
other 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 creates a
false impression as to its source, authorization, or approval.
(10) The
use of any false representation or deceptive means to collect or attempt to
collect any debt or to obtain information concerning a consumer.
(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.
(12) The
false representation or implication that accounts have been turned over to
innocent purchasers for value.
(13) The
false representation or implication that documents are legal process.
(14) The
use of any business, company, or organization name other than the true name of
the debt collector's business, company, or organization.
(15) The
false representation or implication that documents are not legal process 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.
FTC STAFF
COMMENTARY ON SECTION 807:
Section 807
prohibits a debt collector from using any "false, deceptive, or misleading
representation or means in connection with the collection of any debt." It
provides sixteen examples of false or misleading representations.
1.
Scope. Prohibited actions are not limited to the sixteen subsections
listed as examples of activities that violate this provision. In addition,
section 807(10), which prohibits the "use of any false representation or
deceptive means" by a debt collector, is particularly broad and encompasses
virtually every violation, including those not covered by the other
subsections.
Section
807(1) prohibits "the false representation or implication that the
debt collector is vouched for, bonded by, or affiliated with the United States
or any State . . ."
1.
Symbol on dunning notice. A debt collector may not use a symbol in
correspondence that makes him appear to be a government official. For
example, a collection letter depicting a police badge, a judge, or the
scales of justice, normally violates this section.
Section
807(2) prohibits falsely representing either "(A) the character,
amount, or legal status of any debt; or (B) any services rendered or
compensation which may be lawfully received by" the collector.
1.
Legal status of debt. A debt collector may not falsely imply that legal
action has begun.
2.
Amount of debt. A debt collector may not claim an amount more than
actually owed, or falsely assert that the debt has matured or that it is
immediately due and payable, when it is not.
3.
Judgment. When a debt collector provides the validation notice required
by section 809(a)(4), the notice may include the words "copy of a judgment"
whether or not a judgment exists, because section 809(a)(4) provides for a
statement including these words. Compliance with section 809(a)(4) in this
manner will not be considered a violation of section 807(2)(A).
Section
807(3) prohibits falsely representing or implying that "any
individual is an attorney or that any communication is from an attorney."
1.
Form of legal correspondence. A debt collector may not send a
collection letter from a "Pre-Legal Department," where no legal department
exists. An attorney may use a computer service to send letters on his own
behalf, but a debt collector may not send a computer-generated letter
deceptively using an attorney's name.
2.
Named individual. A debt collector may not falsely represent that a
person named in a letter is his attorney.
3.
Relation to other sections. If a creditor falsely uses an attorney's
name rather than his own in his collection communications, he both loses his
exemption from the FDCPA's definition of "debt collector" (Section 803(6))
and violates this provision.
Section
807(4) prohibits falsely representing or implying to the consumer
that nonpayment "will result in the arrest or imprisonment of any [53 Fed.
Reg. 50106] person or the seizure, garnishment, attachment, or sale of
any property or wages of any person . . ."
Section
807(5) prohibits the "threat to take any action that cannot legally
be taken or that is not intended to be taken."
1.
Debt collector's statement of his own definite action. A debt collector
may not state that he will take any action unless he intends to take the
action when the statement is made, or ordinarily takes the action in similar
circumstances.
2.
Debt collector's statement of definite action by third party. A debt
collector may not state that a third party will take any action unless he
has reason to believe, at the time the statement is made, that such action
will be taken.
3.
Statement of possible action. A debt collector may not state or imply
that he or any third party may take any action unless such action is legal
and there is a reasonable likelihood, at the time the statement is made,
that such action will be taken. A debt collector may state that certain
action is possible, if it is true that such action is legal and is
frequently taken by the collector or creditor with respect to similar debts;
however, if the debt collector has reason to know there are facts that make
the action unlikely in the particular case, a statement that the action was
possible would be misleading.
4.
Threat of criminal action. A debt collector may not threaten to report
a dishonored check or other fact to the police, unless he actually intends
to take this action.
5.
Threat of attachment. A debt collector may not threaten to attach a
consumer's tax refund, when he has no authority to do so.
6.
Threat of legal or other action. Section 807(5) refers not only to a
false threat of legal action, but also a false threat by a debt collector
that he will report a debt to a credit bureau, assess a collection fee, or
undertake any other action if the debt is not paid. A debt collector may
also not misrepresent the imminence of such action.
A debt
collector's implication, as well as a direct statement, of planned legal
action may be an unlawful deception. For example, reference to an attorney
or to legal proceedings may mislead the debtor as to the likelihood or
imminence of legal action.
A debt
collector's statement that legal action has been recommended is a
representation that legal action may be taken, since such a recommendation
implies that the creditor will act on it at least some of the time.
Lack of
intent may be inferred when the amount of the debt is so small as to make
the action totally unfeasible or when the debt collector is unable to take
the action because the creditor has not authorized him to do so.
7.
Illegality of threatened act. A debt collector may not threaten that he
will illegally contact an employer, or other third party, or take some other
"action that cannot legally be taken" (such as advising the creditor to sue
where such advice would violate state rules governing the unauthorized
practice of law). If state law forbids a debt collector from suing in his
own name (or from doing so without first obtaining a formal assignment and
that has not been done), the debt collector may not represent that he will
sue in that state.
Section
807(6) prohibits falsely representing or implying that a transfer of
the debt will cause the consumer to (A) lose any claim or defense, or (B)
become subject to any practice prohibited by the FDCPA.
1.
Referral to creditor. A debt collector may not falsely state that the
consumer's account will be referred back to the original creditor, who would
take action the FDCPA prohibits the debt collector to take.
Section
807(7) prohibits falsely representing or implying that the "consumer
committed any crime or other conduct in order to disgrace the consumer."
1.
False allegation of fraud. A debt collector may not falsely allege that
the consumer has committed fraud.
2.
Misrepresentation of criminal law. A debt collector may not make a
misleading statement of law, falsely implying that the consumer has
committed a crime, or mischaracterize what constitutes an offense by
misstating or omitting significant elements of the offense. For example, a
debt collector may not tell the consumer that he has committed a crime by
issuing a check that is dishonored, when the statute applies only where
there is a "scheme to defraud."
Section
807(8) prohibits "Communicating or threatening to communicate to any
person [false] credit information . . ., including the failure to communicate
that a disputed debt is disputed."
1.
Disputed debt. If a debt collector knows that a debt is disputed by the
consumer, either from receipt of written notice (section 809) or other
means, and reports it to a credit bureau, he must report it as disputed.
2.
Post-report dispute. When a debt collector learns of a dispute after
reporting the debt to a credit bureau, the dispute need not also be
reported.
Section
807(9) prohibits the use of any document designed to falsely imply
that it issued from a state or federal source, or "which creates a false
impression as to its source, authorization, or approval."
1.
Relation to other sections. Most of the violations of this section
involve simulated legal process, which is more specifically covered by
section 807(13). However, this subsection is broader in that it also covers
documents that fraudulently appear to be official government documents, or
otherwise mislead the recipient as to their authorship.
Section
807(10) prohibits the "use of any false representation or deceptive
means to collect or attempt to collect any debt or to obtain information
concerning a consumer."
1.
Relation to other sections. The prohibition is so comprehensive that
violation of any part of section 807 will usually also violate subsection
(10). Actions that violate more specific provisions are discussed in those
sections.
2.
Communication format. A debt collector may not communicate by a format
or envelope that misrepresents the nature, purpose, or urgency of the
message. It is a violation to send any communication that conveys to the
consumer a false sense of urgency. However, it is usually permissible to
send a letter generated by a machine, such as a computer or other printing
device. A bona fide contest entry form, which provides a clearly optional
location to enter employment information, enclosed with request for payment,
is not deceptive.
3.
False statement or implications. A debt collector may not falsely state
or imply that a consumer is required to assign his wages to his creditor
when he is not, that the debt collector has counseled the creditor to sue
when he has not, that adverse credit information has been entered on the
consumer's credit record when it has not, that the entire amount is due when
it is not, or that he cannot accept partial payments when in fact he is
authorized to accept them.
4.
Misrepresentation of law. A debt collector may not mislead the consumer
as to the legal consequences of the consumer's actions (e.g., by falsely
implying that a failure to respond is an admission of liability).
A debt
collector may not state that federal law requires a notice of the debt
collector's intent to contact third parties.
5.
Misleading letterhead. A debt collector's employee who is an attorney
may not use "attorney-at-law" [53 Fed. Reg. 50107] stationery
without referring to his employer, so as to falsely imply to the consumer
that the debt collector had retained a private attorney to bring suit on the
account.
Section
807(11) requires the debt collector to "disclose clearly in all
communications made to collect a debt or to obtain information about a
consumer, that the debt collector is attempting to collect a debt and that any
information obtained will be used for that purpose," except where section 804
provides otherwise.
1.
Oral communications. A debt collector must make the required
disclosures in both oral and written communications.
2.
Disclosure to consumers. When a debt collector contacts a consumer and
clearly discloses that he is seeking payment of a debt, he need not state
that all information will be used to collect a debt, since that should be
apparent to the consumer. The debt collector need not repeat the required
disclosure in subsequent contacts.
A debt
collector may not send the consumer a note saying only "please call me right
away" unless there has been prior contact between the parties and the
collector is thus known to the consumer.
3.
Disclosures to third parties. Except when seeking location information,
the debt collector must state in the first communication with a third party
that he is attempting to collect the debt and that information will be used
for that purpose, but need not do so in subsequent communications with that
party.
Section
807(12) prohibits falsely representing or implying that "accounts
have been turned over to innocent purchasers for value."
1.
Relation to other sections. Section 807(6)(A) prohibits a false
statement or implication that threatening to affect the consumer's rights
may be affected by transferring the account; this subsection forbids falsely
stating or implying that a transfer to certain parties has occurred.
Section
807(13) prohibits falsely representing or implying that "documents
are legal process."
1.
Simulated legal process. A debt collector may not send written
communications that deceptively resemble legal process forms. He may not
send a form or a dunning letter that, taken as a whole, appears to simulate
legal process. However, one legal phrase (such as "notice of legal action"
or "show just cause why") alone will not result in a violation of this
section unless it contributes to an erroneous impression that the document
is a legal form.
Section
807(14) prohibits the "use of any business, company, or organization
name other than the [collector's] true name."
1.
Permissible business name. A debt collector may use a name that does
not misrepresent his identity or deceive the consumer. Thus, a collector may
use its full business name, the name under which it usually transacts
business, or a commonly-used acronym. When the collector uses multiple names
in its various affairs, it does not violate this subsection if it
consistently uses the same name when dealing with a particular consumer.
2.
Creditor misrepresentation of identity. A creditor may not use any name
that would falsely imply that a third party is involved in the collection.
The in-house collection unit of "ABC Corp." may use the name "ABC Collection
Division," but not the name "XYZ Collection Agency" or some other unrelated
name.
A
creditor violates this section if he uses the name of a collection bureau as
a conduit for a collection process that the creditor controls in collecting
his own accounts. Similarly, a creditor may not use a fictitious name or
letterhead, or a "post office box address" name that implies someone else is
collecting his debts.
A
creditor does not violate this provision where an affiliated (and
differently named) debt collector undertakes collection activity, if the
debt collector does business separately from the creditor (e.g., where the
debt collector in fact has other clients that he treats similarly to the
creditor, has his own employees, deals at arms length with the creditor, and
controls the process himself).
3.
All collection activities covered. A debt collection business must use
its real business name, commonly-used name, or acronym in both written and
oral communications.
4.
Relation to other sections. If a creditor uses a false business name,
he both loses his exemption from the FDCPA's definition of "debt collector"
(section 803(6)) and violates this provision. If a debt collector falsely
uses the name of an attorney rather than his true business name, he violates
section 807(3) as well as this section. When a debt collector uses a false
business name in a phone call, he violates section 806(6) as well as this
section.
When
using the mails to obtain location information, a debt collector may not
(unless expressly requested by the recipient to identify the firm) use a
name that indicates he is in the debt collection business, or he will
violate section 804(5). When a debt collector's employee who is seeking
location information replies to an inquiry about his employer's identity
under section 804(1), he must give the true name of his employer.
Section
807(15) prohibits falsely representing or implying that documents are
not legal process forms or do not require action by the consumer.
1.
Disguised legal process. A debt collector may not deceive a consumer
into failing to respond to legal process by concealing the import of the
papers, thereby subjecting the consumer to a default judgment.
Section
807(16) prohibits falsely representing or implying that a debt
collector operates or is employed by a "consumer reporting agency" as defined
in the Fair Credit Reporting Act.
1.
Dual agencies. The FDCPA does not prohibit a debt collector from
operating a consumer reporting agency.
2.
Misleading names. Only a bona fide consumer reporting agency may use
names such as "Credit Bureau," "Credit Bureau Collection Agency," "General
Credit Control," "Credit Bureau Rating, Inc.," or "National Debtors Rating."
A debt collector's disclaimer in the text of a letter that the debt
collector is not affiliated with (or employed by) a consumer reporting
agency will not necessarily avoid a violation if the collector uses a name
that indicates otherwise.
3.
Factual issue. Whether a debt collector that has called itself a credit
bureau actually qualifies as such is a factual issue, to be decided
according to the debt collector's actual operation.
§ 808. Unfair practices
[15 U.S.C.
§ 1692f]
A debt
collector may not use unfair or unconscionable means to collect or attempt to
collect any debt. Without limiting the general application of the foregoing, the
following conduct is a violation of this section:
(1) The
collection of any amount (including any interest, fee, charge, or expense
incidental to the principal obligation) unless such amount is expressly
authorized by the agreement creating the debt or permitted by law.
(2) The
acceptance by a debt collector from any person of a check or other payment
instrument postdated by more than five days unless such person is notified in
writing of the debt collector's intent to deposit such check or instrument not
more than ten nor less than three business days prior to such deposit.
(3) The
solicitation by a debt collector of any postdated check or other postdated
payment instrument for the purpose of threatening or instituting criminal
prosecution.
(4)
Depositing or threatening to deposit any postdated check or other postdated
payment instrument prior to the date on such check or instrument.
(5) Causing
charges to be made to any person for communications by concealment of the true
propose of the communication. Such charges include, but are not limited to,
collect telephone calls and telegram fees.
(6) Taking
or threatening to take any nonjudicial action to effect dispossession or
disablement of property if --
(A) there
is no present right to possession of the property claimed as collateral
through an enforceable security interest;
(B) there
is no present intention to take possession of the property; or
(C) the
property is exempt by law from such dispossession or disablement.
(7)
Communicating with a consumer regarding a debt by post card.
(8) Using any
language or symbol, other than the debt collector's address, on any envelope
when communicating with a 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.
FTC STAFF
COMMENTARY ON SECTION 808:
Section 808
prohibits a debt collector from using "unfair or unconscionable means" in his
debt collection activity. It provides eight examples of unfair practices.
1.
Scope. Prohibited actions are not limited to the eight subsections listed
as examples of activities that violate this provision.
2.
Elements of unfairness. A debt collector's act in collecting a debt may
be "unfair" if it causes injury to the consumer that is (1) substantial, (2)
not outweighed by countervailing benefits to consumers or competition, and (3)
not reasonably avoidable by the consumer.
Section
808(1) prohibits collecting any amount unless the amount is expressly
authorized by the agreement creating the debt or is permitted by law.
1.
Kinds of amounts covered. For purposes of this section, "amount" includes
not only the debt, but also any incidental charges, such as collection [53
Fed. Reg. 50108] charges, interest, service charges, late fees, and bad
check handling charges.
2.
Legality of charges. A debt collector may attempt to collect a fee or
charge in addition to the debt if either (a) the charge is expressly provided
for in the contract creating the debt and the charge is not prohibited by
state law, or (b) the contract is silent but the charge is otherwise expressly
permitted by state law. Conversely, a debt collector may not collect an
additional amount if either (a) state law expressly prohibits collection of
the amount or (b) the contract does not provide for collection of the amount
and state law is silent.
3.
Legality of fee under state law. If state law permits collection of
reasonable fees, the reasonableness (and consequential legality) of these fees
is determined by state law.
4.
Agreement not in writing. A debt collector may establish an "agreement"
without a written contract. For example, he may collect a service charge on a
dishonored check based on a posted sign on the merchant's premises allowing
such a charge, if he can demonstrate that the consumer knew of the charge.
Section
808(2) prohibits accepting a check postdated by more than five days
unless timely written notice is given to the consumer prior to deposit.
Section
808(3) prohibits soliciting any postdated check for purposes of
threatening or instituting criminal prosecution.
Section
808(4) prohibits depositing a postdated check prior to its date.
1.
Postdated checks. These provisions do not totally prohibit debt
collectors from accepting postdated checks from consumers, but rather prohibit
debt collectors from misusing such instruments.
Section
808(5) prohibits causing any person to incur telephone or telegram
charges by concealing the true purpose of the communication.
1. Long
distance calls to the debt collector. A debt collector may not call the
consumer collect or ask a consumer to call him long distance without
disclosing the debt collector's identity and the communication's purpose.
2.
Relation to other section. A debt collector who conceals his purpose in
asking consumers to call long distance may also violate section 807(11), which
requires the debt collector to disclose his purpose in some communications.
Section
808(6) prohibits taking nonjudicial action to enforce a security
interest on property, or threatening to do so, where (A) there is not present
right to the collateral, (B) there is no present intent to exercise such rights,
or (C) the property is exempt by law.
1.
Security enforcers. Because the FDCPA's definition of "debt collection"
includes parties whose principal business is enforcing security interests only
for section 808(6) purposes, such parties (if they do not otherwise fall
within the definition) are subject only to this provision and not to the rest
of the FDCPA.
Section
808(7) prohibits "Communicating with a consumer regarding a debt by
post card."
1.
Debt. A debt collector does not violate this section if he sends a post
card to a consumer that does not communicate the existence of the debt.
However, if he had not previously disclosed that he is attempting to collect a
debt, he would violate section 807(11), which requires this disclosure.
Section
808(8) prohibits showing anything other than the debt collector's
address, on any envelope in any written communication to the consumer, except
that a debt collector may use his business name if it does not indicate that he
is in the debt collection business.
1.
Business names prohibited on envelopes. A debt collector may not put on
his envelope any business name with "debt" or "collector" in it, or any other
name that indicates he is in the debt collection business. A debt collector
may not use the American Collectors Association logo on an envelope.
2.
Collector's name. Whether a debt collector/consumer reporting agency's
use of his own "credit bureau" or other name indicates that he is in the
collection business, and thus violates the section, is a factual issue to be
determined in each individual case.
3.
Harmless words or symbols. A debt collector does not violate this section
by using an envelope printed with words or notations that do not suggest the
purpose of the communication. For example, a collector may communicate via an
actual telegram or similar service that uses a Western Union (or other
provider) logo and the word "telegram" (or similar word) on the envelope, or a
letter with the word "Personal" or "Confidential" on the envelope.
4.
Transparent envelopes. A debt collector may not use a transparent
envelope, which reveals language or symbols indicating his debt collection
business, because it is the equivalent of putting information on an envelope.
§ 809. Validation of debts [15 U.S.C.
§ 1692g]
(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 the debt 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 and a copy of such verification or judgment will be mailed to the
consumer by the debt collector; and
(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.
(b) If the
consumer notifies the debt collector in writing within the thirty-day period
described in subsection (a) that the debt, or any portion thereof, is disputed,
or that the consumer requests the name and address of the original creditor, the
debt collector shall cease collection of the debt, or any disputed portion
thereof, until the debt collector obtains verification of the debt or any copy
of a judgment, or the name and address of the original creditor, and a copy of
such verification or judgment, or name and address of the original creditor, is
mailed to the consumer by the debt collector. Collection activities and
communications that do not otherwise violate this title 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. Any
collection activities and communication during the 30-day period may not
overshadow or be inconsistent with the disclosure of the consumer's right to
dispute the debt or request the name and address of the original creditor.
(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.
(d) Legal Pleadings- 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).
(e) Notice Provisions- The sending or delivery of any form or notice which
does not relate to the collection of a debt and is expressly required by the
Internal Revenue Code of 1986, title V of Gramm-Leach-Bliley Act, or any
provision of Federal or State law relating to notice of data security breach or
privacy, or any regulation prescribed under any such provision of law, shall not
be treated as an initial communication in connection with debt collection for
purposes of this section.
FTC STAFF
COMMENTARY ON SECTION 809:
Section
809(a) requires a collector, within 5 days of the first communication, to
provide the consumer a written notice (if not provided in that communication)
containing (1) the amount of the debt and (2) the name of the creditor, along
with a statement that he will (3) assume the debt's validity unless the consumer
disputes it within 30 days, (4) send a verification or copy of the judgment if
the consumer timely disputes the debt, and (5) identify the original creditor
upon written request.
1. Who
must provide notice. If the employer debt collection agency gives the
required notice, employee debt collectors need not also provide it. A debt
collector's agent may give the notice, as long as it is clear that the
information is being provided on behalf of the debt collector.
2.
Single notice required. The debt collector is not required to provide
more than one notice for each debt. A notice need not offer to identify the
original creditor unless the name and address of the original creditor are
different from the current creditor.
3. Form
of notices. The FDCPA imposes no requirements as to the form, sequence,
location, or typesize of the notice. However, an illegible notice does not
comply with this provision.
4.
Alternate terminology. A debt collector may condense and combine the
required disclosures, as long as he provides all required information.
5. Oral
notice. If a debt collector's first communication with the consumer is
oral, he may make the disclosures orally at that time in which case he need
not send a written notice.
6.
Legal action. A debt collector's institution of formal legal action
against a consumer (including the filing of a complaint or service of legal
papers by an attorney in connection with a lawsuit to collect a debt) or
transmission of a notice to a consumer that is required by law as a
prerequisite to enforcing a contractual obligation is not a "communication in
connection with collection of any debt," and thus does not confer section 809
notice-and-validation rights on the consumer.
7.
Collection activities by attorneys. An attorney who regularly attempts to
collect debts by means other than litigation, such as writing the consumer
demand letters (dunning notices) or calling the consumer on the phone about
the obligation (except in response to a consumer's call to him after suit has
been commenced), must provide the required notice, even if a previous debt
collector (or creditor) has given such a notice.
8.
Effect of including proof with first notice. A debt collector must verify
a disputed debt even if he has included proof of the debt with the first
communication, because the section is intended to assist the consumer when a
debt collector inadvertently contacts the [53 Fed. Reg. 50109] wrong
consumer at the start of his collection efforts.
Section
809(b) requires that, if the consumer disputes the debt or requests
identification of the original creditor in writing, the c |
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