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Fair Debt Collection Practices Act

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The Fair Debt Collection Practices Act was a federal financial regulation law passed in 1977. The act prohibited certain debt collection practices and established guidelines under which debt collectors could conduct business.

HIGHLIGHTS
  • The Fair Debt Collection Practices Act was signed into law by President Jimmy Carter on September 20, 1977.
  • The act prohibited certain debt collection practices, and required debt collectors to identify themselves when communicating with a consumer and to validate the debt at the consumer's request.
  • The FDCPA did not apply to collections handled by the original creditor.

    • Legislative history

    The Fair Debt Collection Practices Act (FDCPA) was introduced into the United States House of Representatives on March 22, 1977. The act passed the House by a vote of 199-198 on April 4. The bill moved to the United States Senate Committee on Banking, Housing, and Urban Affairs. The committee amended the bill, and this amended version passed the Senate. The amended version was sent back to the House, which agreed to the Senate's amendments. President Jimmy Carter signed the bill into law on September 20.[1]

    Components

    The FDCPA established guidelines for how debt collectors could contact consumers and conduct business. According to the text of the law, these guidelines were intended to prevent the use of abusive and deceptive practices.[2]

    The FDCPA defined a debt collector as "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." The FDCPA covered the collection of mortgages, credit card debt, medical debt, and other personal debt, but did not cover business debt. Additionally, it did not apply to collection by the original creditor to whom the debt was owed.

    The act prohibited the following actions in the conduct of debt collection:[2]

    • Calling a consumer during hours that the collector was aware were inconvenient to the consumer. Generally, this allowed a collector to call between 8 a.m. and 9 p.m., unless they had knowledge to the contrary.
    • Continuing to contact a consumer after receiving written notice that the consumer wished no further communication or refused to pay, with the exception of informing the consumer that collection efforts were being terminated or a lawsuit was being filed.
    • Continuing to contact a consumer who requested validation of the debt before mailing the consumer the validation.
    • Threatening the consumer with violence or arrest.
    • Publishing a list of consumers who refused to pay, except to a credit reporting agency.
    • Advertising the sale of debt in an attempt to coerce payment of the debt.
    • Intentionally causing a phone to ring with the intent to annoy or harass the consumer.
    • Contacting a consumer's place of employment after having been advised not to by the employer.
    • Contacting a consumer that was represented by an attorney.
    • Using abusive or profane language.
    • Reporting false information on a consumer's credit report, or threatening to do so.
    • Misrepresenting the debt owed or the identity of the collector.

    In addition to these prohibitions, the act required debt collectors to perform certain actions during the collection process to identify themselves to consumers. The act required collectors to do the following:[2]

    • Identify themselves in every communication
    • Give the name and address of the original creditor
    • Notify the consumer of his or her right to dispute the debt
    • Provide verification of the debt

    As originally passed, the FDCPA granted enforcement authority to the Federal Trade Commission. The passage of the Dodd-Frank Act in 2010 transferred this responsibility to the Consumer Financial Protection Bureau.[2][3]

    See also

    External links

    Consumer Financial Protection Bureau

    Footnotes

    1. ↑ United States Congress, "H.R.5294 - Debt Collection Practices Act," accessed February 24, 2017
    2. ↑ 2.0 2.1 2.2 2.3 Federal Trade Commission, "Fair Debt Collection Practices Act," accessed February 24, 2017
    3. ↑ Consumer Financial Protection Bureau, "Are there laws that limit what debt collectors can say or do?" accessed February 24, 2017
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