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Fair Debt Collection: 15 U.S.C. § 1692m. Reports to Congress by the Bureau; views of other Federal agencies [FDCPA § 815]

(a) Not later than one year after the effective date of this subchapter and at one-year intervals thereafter, the Bureau shall make reports to the Congress concerning the administration of its functions under this subchapter, including such recommendations as the Bureau deems necessary or appropriate. In addition, each report of the Bureau shall include its assessment of the extent to which compliance with this subchapter is being achieved and a summary of the enforcement actions taken by the Bureau under section 1692l of this title.

Fair Debt Collection: 15 U.S.C. § 1692n. Relation to State laws [FDCPA § 816]

This subchapter does not annul, alter, or affect, or exempt any person subject to the provisions of this subchapter from complying with the laws of any State with respect to debt collection practices, except to the extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection provided by this subchapter.

Fair Debt Collection: 15 U.S.C. § 1692o. Exemption for State regulation [FDCPA § 817]

The Bureau shall by regulation exempt from the requirements of this subchapter any class of debt collection practices within any State if the Bureau determines that under the law of that State that class of debt collection practices is subject to requirements substantially similar to those imposed by this subchapter, and that there is adequate provision for enforcement.

[Pub. L. No. 111–203, tit. X, § 1089(1), 124 Stat. 2092 (July 21, 2010)]

Fair Debt Collection: 15 U.S.C. § 1692p. Exception for certain bad check enforcement programs operated by private entities [FDCPA § 818]

(a) In general—

(1) Treatment of certain private entities

Subject to paragraph (2), a private entity shall be excluded from the definition of a debt collector, pursuant to the exception provided in section 1692a(6) of this title, with respect to the operation by the entity of a program described in paragraph (2)(A) under a contract described in paragraph (2)(B).

(2) Conditions of applicability

Fair Debt Collection: Introduction

[Editor’s Note.6]

Report of the Committee on Banking, Housing and Urban Affairs

U.S. Senate

Aug. 2, 1977

[Page 1]

The Committee on Banking, Housing, and Urban Affairs, to which was referred the bill (H.R. 5294) to amend the Consumer Credit Protection Act to prohibit abuses by debt collectors, having considered same, reports favorably thereon with an amendment and recommends that the bill as amended do pass.

Fair Debt Collection: History of the Legislation

On May 12 and 13, 1977, the Consumer Affairs Subcommittee held hearings on four bills to regulate debt collection practices: S. 656, introduced by Senator Biden; S. 918, introduced by Senator Riegle; S. 1130, introduced by Senator Garn for himself and Senators Schmitt and Tower; and H.R. 5294, passed by the House of Representatives on April 4, 1977. After these hearings and before markup by the committee, Senator Riegle offered a composite bill, designated Committee Print No. 1, as a substitute for S. 918.

Fair Debt Collection: Nature and Purpose of the Bill

This legislation would add a new title to the Consumer Credit Protection Act entitled the Fair Debt Collection Practices Act. Its purpose is to protect consumers from a host of unfair, harassing, and deceptive debt collection practices without imposing unnecessary [Page 2] restrictions on ethical debt collectors. This bill was strongly supported by consumer groups, labor unions, State and Federal law enforcement officials, and by both national organizations which represent the debt collection profession, the American Collectors Association and Associated Credit Bureaus.

Fair Debt Collection: Need for This Legislation

The committee has found that debt collection abuse by third party debt collectors is a widespread and serious national problem. Collection abuse takes many forms, including obscene or profane language, threats of violence, telephone calls at unreasonable hours, misrepresentation of a consumer’s legal rights, disclosing a consumer’s personal affairs to friends, neighbors, or an employer, obtaining information about a consumer through false pretense, impersonating public officials and attorneys, and simulating legal process.

Fair Debt Collection: Scope of the act

This bill applies only to debts contracted by consumers for personal, family, or household purposes; it has no application to the collection of commercial accounts.

Fair Debt Collection: Obtaining location information

While this legislation strongly protects the consumer’s right to privacy by prohibiting a debt collector from communicating the consumer’s personal affairs to third persons, the committee also recognizes the debt collector’s legitimate need to seek the whereabouts of missing debtors. Accordingly, this bill permits debt collectors to contact third persons for the purpose of obtaining the consumer’s location.

Fair Debt Collection: Prohibited practices

This legislation expressly prohibits a host of harassing, deceptive, and unfair debt collection practices. These include: threats of violence; obscene language; the publishing of “shame lists;” harassing or anonymous telephone calls; impersonating a government official or attorney; misrepresenting the consumer’s legal rights; simulating court process; obtaining information under false pretenses; collecting more than is legally owing; and misusing postdated checks.

Fair Debt Collection: Validation of debts

Another significant feature of this legislation is its provision requiring the validation of debts. After initially contacting a consumer, a debt collector must send him or her written notice stating the name of the creditor and the amount owed. If the consumer disputes the validity of the debt within 30 days, the debt collector must cease collection until he sends the consumer verification.

Fair Debt Collection: Legal actions by debt collectors

This legislation also addresses the problem of “forum abuse,” an unfair practice in which debt collectors file suit against consumers in courts which are so distant or inconvenient that consumers are unable to appear. As a result, the debt collector obtains a default judgment and the consumer is denied his day in court.

Fair Debt Collection: Furnishing deceptive forms

Another common collection abuse is known colloquially as “flatrating.” A “flat-rater” is one who sells to creditors a set of dunning letters bearing the letter-head of the flat-rater’s collection agency and exhorting the debtor to pay the creditor at once. The creditor sends these letters to his debtors, giving the impression that a third party debt collector is collecting the debt. In fact, however, the flat-rater is not in the business of debt collection, but merely sells dunning letters.

Unfair and Deceptive Acts and Practices: Ala. Code §§ 8-19-1 through 8-19-15 Deceptive Trade Practices Act

Prohibited Practices: 27 enumerated practices, plus a catchall provision prohibiting other unconscionable or deceptive practices.

Scope: “Trade or commerce” includes advertising, buying, offering for sale, sale or distribution, or performance of any service, goods, article, commodity, or other thing of value. Goods include real estate, intangibles, and franchises. Leases and consignments are included. Private cause of action is limited to consumers, except for certain violations involving pyramid sales and seller-assisted marketing plans.

Unfair and Deceptive Acts and Practices: Ariz. Rev. Stat. Ann. §§ 44-1521 through 44-1534 Consumer Fraud Act

Prohibited Practices: Deception, omission of material fact with intent that others rely on it.

Scope: Sale, offer for sale, advertisement, or lease of goods, intangibles, real estate or services.

Exclusions: Advertisements of publisher, radio or television media without knowledge; advertising complying with FTC regulations.

Private Remedies: None specified. (Courts imply private right of action.)

Limitations: None specified.

Unfair and Deceptive Acts and Practices: Cal. Civ. Code §§ 1750 through 1785 (West) Consumers Legal Remedies Act

Prohibited Practices: 27 enumerated unfair practices and unfair or deceptive practices.

Scope: Transactions that are intended to result or which result in sale or lease of goods or services to any consumer.

Exclusions: Construction and/or sale of entire residence or all or part of commercial or industrial structure; sales of realty, including site preparation; dissemination of advertisements by any advertising medium with no knowledge of falsity; non-consumer transactions.

Unfair and Deceptive Acts and Practices: Colo. Rev. Stat. §§ 6-1-101 through 6-1-116 Consumer Protection Act

Prohibited Practices: Numerous enumerated deceptive practices, plus separate sections on specific industries. Catchall prohibition of knowingly or recklessly engaging in any unfair, unconscionable, deceptive, deliberately misleading, false, or fraudulent act or practice.

Scope: Practices in course of a person’s business, vocation or occupation. The term “property,” used in many substantive prohibitions, is broadly defined to include real property, personal property, intangible property, or services.

Unfair and Deceptive Acts and Practices: Conn. Gen. Stat. §§ 42-110a through 42-110q Connecticut Unfair Trade Practices Act

Prohibited Practices: Unfair methods of competition and unfair or deceptive acts or practices.

Scope: Trade or commerce means the advertising, sale, lease, offer for sale or lease, or distribution of any services or property, real, personal or intangible, or anything else of value.

Exclusions: Transactions or actions permitted under law as administered by board or officer of state or U.S.; advertisements by publisher, radio and television media, with no knowledge of falsity, and with no direct financial interest in the sale of the product.