FEDERAL TRADE COMMISSION
Staff Commentary on the Fair Debt Collection Practices Act
Statements of General Policy or Interpretation
801. Short Title.
802. Findings and purpose.
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.
813. Civil liability.
814. Administrative enforcement.
815. Reports to Congress by the Commission.
816. Relation to State laws.
817. Exemption for State regulation.
818. Effective date.
[53 Fed. Reg. 50097-50110 (Dec. 13, 1988)]
AGENCY: Federal Trade Commission.
ACTION: Publication of staff commentary.
SUMMARY: The Commission staff is issuing its Commentary on the Fair
Debt Collection Practices Act that will supersede all previously issued staff
interpretations of the Act. The purpose of the Commentary is to clarify and codify these
DATE: December 13, 1988.
ADDRESS: Federal Trade Commission, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: On March 7, 1986, the staff of the Federal
Trade Commission ("staff" or "FTC staff") published its proposed Staff
Commentary on the Fair Debt Collection Practices Act ("FDCPA") in the Federal
Register (51 FR 8019). That notice set forth the text of the proposed Commentary, along
with (1) the staff's rationale for issuing the Commentary and (2) a list of the principal
areas where it varied in appreciable measure from the informal opinions previously offered
by the FTC staff. That notice also briefly described the FDCPA, the Commission's role in
enforcing the statute, and the FTC staff's interest in improving the present method of
providing advice by making informal staff letters available to the public. It explained
that the staff viewed the publication of the Commentary as an opportunity to provide a
more comprehensive vehicle for providing staff opinions concerning the FDCPA, and to
revise previous advice that the staff had come to believe was inconsistent or inaccurate.
Both the notice dated March 7, 1986, and the introduction to the proposed Commentary
specified that it does not have the force of a trade regulation rule or formal agency
action, and that it is not binding on the Commission or the public.
The notice in the Federal Register dated March 7, 1986, stated that the FTC staff would
accept public comments on the proposed Commentary to aid in preparation of the final
product. Three trade associations, six corporations, the consumer protection division of
the offices of three state Attorneys General, one state regulatory agency, one national
consumer organization, two local consumer groups, and two law firms responded to this
invitation. Although the notice stated the FTC staff was requesting comments until May 6,
1986, all comments were taken into account in preparing the Commentary, even those
received after that date.
On July 9, 1986, four months after publication of the proposed Commentary, the
President signed into law a bill (Pub. L. 99-3610) repealing former section 803(6)(F),
which had exempted "any attorney-at-law collecting a debt as an attorney on behalf of
and in the name of a client." The FTC staff has responded to a large number of
inquiries from attorneys seeking its views on how the FDCPA applies to their practices.
Therefore, the staff has added comments in appropriate locations to reflect the advice it
has provided to attorneys on these issues.
This notice (1) summarizes comments received from the public in response to the FTC
staff's 1986 publication of the Fair Debt Collection Practices Act Commentary in
"proposed" form, (2) highlights the major areas where the staff revised the
Commentary based on those comments or refused to do so, and (3) outlines the major issues
added to the Commentary, reflecting written advice which the staff has provided to
attorneys following repeal of the [53 Fed. Reg. 50098] "attorney-at-law
collecting a debt" exemption in July 1986.
In this notice, the word "comment" refers to an opinion set forth in the
Commentary by the staff, "public commenter" refers to a party that submitted
views on the proposed Commentary following its publication in the Federal Register, and
"public comments" refers to those views.
PRINCIPAL REVISIONS TO COMMENTARY BASED ON PUBLIC COMMENTS
Generally, the FTC staff found the public comments helpful in preparing the final
version of the Commentary, although not all the proposals were adopted. Most of the public
comments were aimed at clarifying the staff's intent. The redraft adopted these
suggestions where it appeared that they resulted in an appreciable improvement. The
overwhelming majority of the revisions the FTC staff made in the Commentary involved only
minor changes (adding a word or parenthetical phrase or making some minor editorial
change), and were designed to clarify points or to avoid possible unintended inferences.
However, besides the addition of comments relating to attorney debt collectors, there were
some changes of a substantive nature that were made based on public comments. This section
highlights the most significant of the clarifications and revisions that were made based
on public comments.
1. Location information (Section 804 (1,5))
The FTC staff has made adjustments to two comments to acknowledge that a debt collector
who is seeking location information by mail may identify his employer when expressly asked
to do so. The staff added parenthetical references to comment #4 to section 804, and to
comment #4 to section 807(14), which discusses section 804(1) and (5) under the heading
"relation to other sections."
One public commenter pointed out that if the person from whom the location information
is sought replies by expressly requesting the name of the employer of the individual debt
collector who sent the letter,(1) sections 804(1) and
804(5) may appear to place conflicting obligations on the debt collection firm. On the one
hand, section 804(1) requires a debt collector employee, in communications seeking
location information, to "identify his employer" if "expressly
requested." Yet section 804(5) generally prohibits a debt collector from using
"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."
The FTC staff believes a proper interpretation of the FDCPA is to read section 804(1)
as controlling this situation, because it specifically addresses the situation in which an
individual expressly requests the name of the debt collection firm. In that case, we
believe that the debt collection firm must reveal its identity in order to acquire
location information. The comments bearing on this issue have therefore been changed to
reflect that position.
2. Contact limited to consumer's attorney (Section 805(a))
Public commenters argued forcefully that comment #3, stating that a debt collector
could not communicate with a consumer who stated that an attorney would represent him with
respect to all future debts, would place an unreasonable burden on the debt
collector. They reported that the standard operating procedure for many debt collectors is
to close the consumer's file once a debt is collected or efforts to collect it cease.
Should a second debt from the same consumer be assigned to the debt collector, therefore,
the collector might be unaware of the previous file on that debtor and would not know
whether the consumer was represented by an attorney with respect to all future debts.
These commenters contend that the only way a debt collector could comply with our proposed
interpretation would be to check every new debtor file against the closed files to
determine whether (1) the collector had ever previously contacted that debtor, (2) the
debtor had previously been represented by an attorney, and (3) the debtor had given the
collector a blanket notice of legal representation. They suggested instead that, when
contacted about a subsequent debt, the consumer should simply inform the debt collector
that he is still represented by an attorney and that the debt collector should contact the
The FTC staff now believes that the portion of comment #3 in the proposed Commentary
regarding future representation is simply not supported by the statute, or envisioned by
its legislative history. Furthermore, it could easily be the case that the attorney in
fact no longer represents the consumer. Accordingly, the staff has modified the second
paragraph of comment #3 to section 805(a) to replace the broad reference to "all
current and future debts" with the more appropriate "other debts."
3. Consumer consent to third party contacts (Section 805(b))
The statement in comment #1 that consumers consent to third party contacts "may be
presumed from circumstances" has been deleted. One public commenter expressed concern
that this formulation might open the door to overreaching by debt collectors. The deleted
phrase was not necessary to the point involved--that consent need not necessarily be in
writing--which is better made by providing a clear example of such consent.
4. Lists of debtors (Section 806(3))
One public commenter noted that this section of the proposed Commentary did not
completely reflect the FDCPA's reference to sections of the Fair Credit Reporting Act. The
description has been amended and a comment has been added to reflect that relationship, in
accord with a prior staff opinion on the section and a Commission interpretation on the
5. Statement by debt collector of possible action (Section 807(5))
A revision was made to correct the Commentary's inadvertent reference to the creditor,
rather than to the debt collector, in comment #3 to this section. Comment #3
concerns statements by the debt collector about action that is unlikely to be taken in a
particular case. Obviously, as several public commenters pointed out, the creditor's
knowledge that action is unlikely is not automatically imputed to the debt collector.
6. Documents deceptive as to authorship (Section 807(9))
An appropriate clause has been added to the description and to comment #1, to give a
more complete discussion of this section than in the proposed Commentary, which focused
only on documents that fraudulently appear to be government documents. One public
commenter correctly pointed out that the statute covers a much wider range of deceptive
practices as to the source of the document.
7. Letters marked "personal" or "confidential" (Section 808(8))
Comment #3 to this section has been expanded to assert that use of the term
"Personal" or "Confidential," as well as [53 Fed. Reg. 50099]
the word "Telegram" or the like, does not violate this section.
One public commenter stated that debt collectors use designations of this sort to
protect the consumer's privacy by attempting to ensure that the envelope is not opened by
unauthorized persons, and argued that such terms are essentially part of the letter's
The FTC staff agrees that the proposed change is logical. The staff has already
recognized that a rigid, literal approach to section 808(8) would lead to absurd results
(i.e., taken literally, it would prohibit showing any part of the consumer's address on
the envelope). The legislative purpose was to prohibit a debt collector from using symbols
or language on envelopes that would reveal that the contents pertain to debt
collection--not to totally bar the use of harmless words or symbols on an envelope.
Indeed, it was for this reason that comment #3 to this section of the proposed Commentary
(in accord with prior informal staff advice) explicitly recognized that the term
"Telegram" or similar designation on an envelope does not violate this section.
8. Waiver of venue provision (Section 811)
Numerous public commenters objected to comment #1 to this section, indicating a fear
that the staff's interpretation would lead to a flood of waiver provisions hidden in the
fine print of consumer credit contracts. Although the FTC staff believes that these
parties misread the comment, which clearly stated that any waiver "must be provided
to the debt collector," the comment has been expanded to be even more explicit on the
SIGNIFICANT PUBLIC COMMENTS NOT ADOPTED
There were several areas in which public commenters suggested changes in the Commentary
that were not adopted. This section discusses the most significant of those proposals, and
sets forth the staff's principal reasons for maintaining its position.
1. Contacts in which the collector does not mention the debt (Sections 803(2),
Several public commenters contended that the FTC staff's treatment of certain contacts
consumers as violations of the FDCPA was incorrect because the contacts did not involve a
"communication" under the definition provided in section 803(2), which refers to
"conveying of information regarding a debt directly or indirectly to any
person." These commenters argued that contacts that do not explicitly refer to the
debt are not "communications" and, hence, do not violate any provision where
that term is used.
The FTC staff continues to believe that some contacts with consumers can violate
section 805(a) or section 805(c) because they at least "indirectly" refer to the
debt, even if the obligation isn't specifically mentioned. For example, there is no doubt
that a debt collector who has previously contacted a consumer about a debt violates
section 805(a) if he calls the consumer at 3 AM and says only "Hi, this is Joe, I
haven't forgotten you"--the words may not refer to the debt, but the consumer will
know from previous collection efforts by "Joe" what the call is about. The words
"or indirectly" in the definition make it clear that Congress intended a common
sense approach to this situation. Furthermore, the word "communication" (or
variations thereof) is used six times in section 804, which authorizes the seeking of
location information from third parties with the general requirement that the debt will not
be disclosed to such parties, demonstrating that this term was not intended to be limited
throughout the statute to acts that specifically refer to the debt, regardless of the
definition set forth in section 803(2).
2. Definition of "location information" (Section 803(7))
Public commenters made varying suggestions that would effectively amend the section's
definition of "location information"--i.e., "a consumer's place of abode
and his telephone number at such place, or his place of employment." One public
commenter expressed the view that a debt collector was somehow limited by this language to
obtaining only one of the three enumerated items (home address or home phone or work
address), while others suggested that we interpret the definition to include a fourth item
(work phone). Because no public commenter provided a convincing rationale for its
position, and because the FTC staff believes that the definition is clear, both
suggestions were declined.
3. Use of "copy of a judgment" in notice (Section 807(2)(A))
Some public commenters criticized the staff's statement in comment #3 to section 807(2)
that the validation notice provided by a debt collector to comply with section 809(a)(4)
may use the phrase "copy of a judgment" even where no judgment exists. Staff had
previously advised in informal opinion letters that the use of those words violated
section 807(2)(A) because they suggested that a judgment existed when it did not. Because
the practical effect of these interpretations was to make verbatim use of the statutory
language of section 809(a)(4) a violation of section 807(2)(A), they were rejected by the
leading court decision(2) and by the staff in the proposed
Commentary. The FTC staff continues to believe its reasons for revising prior staff
opinions (discussed in item 5 of the notice in the Federal Register dated March 7, 1986)
are well-founded, and thus it has adhered to that position.
One public commenter suggested that we might also permit the phrase "copy of the
judgment" as well. Because the phrase used in section 809(a)(4) is "copy of a
judgment" (emphasis added) and this language led to the staff's current
interpretation, the Commentary has not been revised on this point.
4. False allegations of fraud (Section 807(7))
Some public commenters contended that the language of this section, which outlaws the
"false representation or implication that the consumer committed any crime or other
conduct in order to disgrace the consumer" (emphasis added) demonstrates
that specific intent is essential to a violation. The FTC staff agrees that some element
of intent is involved, but believes that an intent to disgrace can be inferred from the
nature of the acts the consumer is being accused of--fraud (comment 1) or crime (comment
2). Therefore, the comments on this section have not been changed.
5. Disclosure of debt collection purpose (Section 807(11))
Several public commenters questioned the staff's refusal to construe section 807(11) as
requiring debt collectors to disclose the purpose of each and every written and oral
contact, pointing out that court decisions have gone both ways on the issue. The staff's
position, reflected in the Commission's Sixth and Seventh Annual Reports to Congress--that
such disclosures need not be made where they are obvious or have already been made--has
not changed, and the comments provide no new argument for revising that view.
Other public commenters asked the staff to retract the comment stating that a debt
collector may not send a note saying only "please call me right away" to a
consumer whom the collector has not previously contacted. They argued that such a note
could not violate this [53 Fed. Reg. 50100] section because it made no reference
to the debt and therefore was not a "communication," as defined in section
803(2). Because the staff believes that (1) the intent of section 807(11) was to require
that debt collectors' purposes be known to parties they contact, and (2) the use of the
term "communication" in other sections of the FDCPA shows that its construction
is not always limited to the definition set forth in section 803(2), this comment was
6. Elements of unfairness (Section 808)
Some public commenters criticized comment #2, which concerns general violations of this
section of the FDCPA, for construing the term "unfair" in the same way as the
Commission has construed it under section 5 of the FTC Act. They argued that the comment
would, in effect, repeal some of the subsections of section 808 because the proscribed
conduct would not cause the type of injury required, or would not be considered unfair
based on a cost/benefit analysis. Because the location of the comment--under section 808 generally,
as opposed to any of its subsections--makes it clear that the staff did not intend to
negate any of the eight types of conduct specified by Congress to be a violation of this
provision in subsections (1) through (8), the staff retained this comment.
Other public commenters asked that comment #2 be expanded to state that section 808
does not cover inadvertent acts or any act that was reasonably calculated to collect the
debt. Because this comment was meant simply to reflect the FTC staff's view that the
Commission's approach to "unfair practices" (as reflected in its treatment of
that concept in section 5 of the FTC Act) is applicable in analyzing general violations of
section 808, comment #2 has not been substantially revised.
7. Details of validation notices (Section 809(a))
Some public commenters objected to the staff's view that section 809(a) imposes no
requirements as to form, sequence, location, or type size of the notice (comment 3); to
our reasons for reversing prior informal opinions to the contrary (item 10 in the March 7,
1986 notice in the Federal Register); and to our view that the notice may be provided
orally (comment 5). However, the public commenters provided no new analysis to change the
staff's reading of the section. Therefore, the Commentary has not been changed on this
8. Proper forum for suit on an oral contract (Section 811(a)(2))
One public commenter suggested deletion of comment 4 to section 811. Section 811(a)(2)
clearly states that there are only two districts where suit may be brought by a debt
collector on a debt--where the consumer "signed the contract sued upon" and
where the consumer "resides at the commencement of the action." The staff
decided to retain the comment, which simply notes the obvious fact that if there is only
an oral agreement (which by definition can not be "signed"), suit may only be
brought where the consumer resides.
9. Miscellaneous requests for added comments
Some public commenters made a number of suggestions that the FTC staff establish new
principles in the Commentary.(4)
Although not all of the proposals were without merit, the staff believes it is unwise
to add major new sections to the final version of the Commentary to address issues that
have never been the subject of staff correspondence.
NEW COMMENTS BASED ON RECENT STAFF LETTERS TO ATTORNEYS
The staff has added comments to reflect the large volume of written advice it has
provided to attorneys following repeal of the "attorney-at-law" exemption in
July 1986. (5)
This section synthesizes the conclusions reached in the most significant additions made
to the Commentary based on this recent correspondence.
1. Coverage (Sections 803(2, 5, 6), 811)
Attorneys or law firms that engage in traditional debt collection activities (sending
dunning letters, making collection calls to consumers) are covered by the FDCPA, but those
whose practice is limited to legal activities are not covered.(6)
Similarly, filing or service of a complaint or other legal paper (or transmission of a
notice that is a legal prerequisite to enforcement of a debt) is not a
"communication" covered by the FDCPA, but traditional collection efforts are
A student loan is a "debt" covered by the FDCPA;(8)
however, alimony, tort claims, and non-pecuniary obligations are not covered.(9)
A salaried attorney who collects debts on behalf of, and in the name of, his creditor
employer,(10) and a state educational agency that collects
student loans,(11) are exempt from coverage by the FDCPA.
Debt collectors (including attorney debt collectors) are subject to the venue
limitations of the FDCPA.(12)
2. Communications by debt collectors (Sections 805(b), 806(3-4))
An attorney debt collector, who represents either (1) a creditor or (2) a debt
collector that previously tried to collect an account, may report his collection efforts
to the debt collector.(13)
An attorney may communicate with a witness in a lawsuit that has been filed.(14)
A debt collector may provide a list of consumers, against whom judgments have been
entered, to an investigator in order to locate such individuals.(15)
A debt collector may place a public notice required by law as a prerequisite to
enforcing the debt.(16)
3. Dispute and verification (Section 809)
An attorney debt collector must provide the required validation notice, even if a
previous debt collector (or the creditor) has given such notice.(17)
A debt collector does not comply with the obligation to verify the debt simply by
including proof with the first communication to the consumer.(18)
[53 Fed. Reg. 50101]
An attorney debt collector may take legal action within 30 days of sending the required
validation notice, regardless of whether the consumer disputes the debt; if the consumer
disputes the debt, the attorney may still take legal action but must cease other
collection efforts (e.g., letters or calls to the consumer) until verification is obtained
and mailed to the consumer.(19)
4. Permissible forum to enforce a judgment on a debt (Section 811)
If a judgment has been obtained from a forum that satisfies the requirements of this
section, a debt collector may bring suit to enforce it in another jurisdiction.(20)
By direction of the Commission.
Donald S. Clark,
FEDERAL TRADE COMMISSION STAFF COMMENTARY ON
THE FAIR DEBT COLLECTION PRACTICES ACT
This Commentary is the vehicle by which the staff of the Federal Trade Commission
publishes its interpretations of the Fair Debt Collection Practices Act (FDCPA). It is a
guideline intended to clarify the staff interpretations of the statute, but does not have
the force or effect of statutory provisions. It is not a formal trade regulation rule or
advisory opinion of the Commission, and thus is not binding on the Commission or the
The Commentary is based primarily on issues discussed in informal staff letters
responding to public requests for interpretations and on the Commission's enforcement
program, subsequent to the FDCPA's enactment. It is intended to synthesize staff views on
important issues and to give clear advice where inconsistencies have been discovered among
staff letters. In some cases, reflection on the issues posed or relevant court decisions
have resulted in a different interpretation from that expressed by the staff in those
informal letters. Therefore, the Commentary supersedes the staff views expressed in such
In many cases several different sections or subsections of the FDCPA may apply to a
given factual situation. This results from the effort by Congress in drafting the FDCPA to
be both explicit and comprehensive, in order to limit the opportunities for debt
collectors to evade the underlying legislative intention. Although it may be of only
technical interest whether a given act violates one, two, or three sections of the FDCPA,
the Commentary frequently provides cross references to other applicable sections so that
it may serve as a more comprehensive guide for its users. The Commentary attempts to
discuss the more common overlapping references, usually under the heading "Relation
to other sections," and deals with issues raised by each factual situation under the
section or subsection that the staff deems most directly applicable to it.
The Commentary will be revised and updated by the staff as needed, based on the
experience of the Commission in responding to public inquiries about, and enforcing, the
FDCPA. The Commission welcomes input from interested industry, consumer, and other public
parties on the Commentary and on issues discussed in it.
The staff will continue to respond to requests for informal interpretations. Updates of
the Commentary will consider and, where appropriate, incorporate issues raised in
correspondence and other public contacts, as well as the Commission's enforcement efforts.
Therefore, a party who is interested in raising an issue for inclusion in future editions
of the Commentary does not need to make any formal submission or request to that effect.
The Commentary should be used in conjunction with the statute. The abbreviated
description of each section or subsection in the Commentary is designed only as a preamble
to discussion of issues pertaining to each section and is not intended as a substitute for
the statutory text.
The Commentary should not be considered as a reflection of all court rulings under the
FDCPA. For example, on some issues judicial interpretations of the statute vary depending
on the jurisdiction, with the result that the staff's enforcement position can not be in
accord with all decided cases.
SECTION 801 -- SHORT TITLE
Section 801 names the statute the "Fair Debt Collection Practices
The Fair Debt Collection Practices Act (FDCPA) is Title VIII of the Consumer Credit
Protection Act, which also includes other federal statutes relating to consumer credit,
such as the Truth in Lending Act (Title I), the Fair Credit Reporting Act (Title VI), and
the Equal Credit Opportunity Act (Title VII).
SECTION 802 -- FINDINGS AND PURPOSE
Section 802 recites the Congressional findings that serve as the basis
for the legislation.
SECTION 803 -- DEFINITIONS
Section 803(1) defines "Commission" as the Federal Trade
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
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
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
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
- 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
(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
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
(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
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
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."
SECTION 804 -- ACQUISITION OF LOCATION INFORMATION
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
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
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 -- COMMUNICATION IN CONNECTION WITH DEBT COLLECTION
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
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
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).
SECTION 806 -- HARASSMENT OR ABUSE
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
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
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
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
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
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
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.
SECTION 807 -- FALSE OR MISLEADING REPRESENTATIONS
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
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
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
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
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
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
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
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
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
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.
SECTION 808 -- UNFAIR PRACTICES
Section 808 prohibits a debt collector from using "unfair or
unconscionable means" in his debt collection activity. It provides eight examples of
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
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
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
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.
SECTION 809 -- VALIDATION OF DEBTS
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
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
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
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
Section 809(b) requires that, if the consumer disputes the debt or
requests identification of the original creditor in writing, the collector must cease
collection efforts until he verifies the debt and mails a response. Section 809(c) states
that a consumer's failure to dispute the validity of a debt under this section may not be
interpreted by a court as an admission of liability.
1. Pre-notice collection. A debt collector need not cease normal collection
activities within the consumer's 30-day period to give notice of a dispute until he
receives a notice from the consumer. An attorney debt collector may take legal action
within 30 days of sending the notice, regardless of whether the consumer disputes the
debt. If the consumer disputes the debt, the attorney may still take legal action but must
cease collection efforts until verification is obtained and mailed to the consumer.
A debt collector may report a debt to a credit bureau within the 30-day notice period,
before he receives a request for validation or a dispute notice from the consumer.
SECTION 810 -- MULTIPLE DEBTS
Section 810 provides: "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 apply such payment in accordance with the consumer's
SECTION 811 -- LEGAL ACTIONS BY DEBT COLLECTORS
Section 811 provides that a debt collector may sue a consumer only in
the judicial district where the consumer resides or signed the contract sued upon, except
that an action to enforce a security interest in real property which secures the
obligation must be brought where the property is located.
1. Waiver. Any waiver by the consumer must be provided directly to the debt
collector (not to the creditor in the contract establishing the debt), because the forum
restriction applies to actions brought by the debt collector.
2. Multiple defendants. Since a debt collector may sue only where the consumer
(1) lives or (2) signed the contract, the collector may not join an ex-husband as a
defendant to a suit against the ex-wife in the district of her residence, unless he also
lives there or signed the contract there. The existence of community property at her
residence that is available to pay his debts does not alter the forum limitations on
3. Real estate security. A debt collector may sue based on the location of a
consumer's real property only when he seeks to enforce an interest in such property that
secures the debts.
4. Services without written contract. Where services were provided pursuant to
an oral agreement, the debt collector may sue only where the consumer resides. He may not
sue where services were performed (if that is different from the consumer's residence),
because that is not included as permissible forum location by this provision.
5. Enforcement of judgments. If a judgment is obtained in a forum that
satisfies the requirements of this section, it may be enforced in another jurisdiction,
because the consumer previously has had the opportunity to defend the original action in a
6. Scope. This provision applies to lawsuits brought by a debt collector,
including an attorney debt collector, when the debt collector is acting on his own behalf
or on behalf of his client.
SECTION 812 -- FURNISHING CERTAIN DECEPTIVE FORMS
Section 812 prohibits any party from designing and furnishing forms,
knowing they are or will be used to deceive a consumer to believe that someone other than
his creditor is collecting the debt, and imposes FDCPA civil liability on parties who
supply such forms.
1. Practice prohibited. This section prohibits the practice of selling to
creditors dunning letters that falsely imply that a debt collector is participating in
collection of the debt, when in fact only the creditor is collecting.
2. Coverage. This section applies to anyone who designs, complies, or
furnishes the forms prohibited by this section.
3. Pre-collection letters. A form seller may not furnish a creditor with (1) a
letter on a collector's letterhead to be used when the collector is not involved in
collecting the creditor's debts, or (2) a letter indicating "copy to (the
collector)" if the collector is not participating in collecting the creditor's debt.
A form seller may not avoid liability by including a statement in the text of a form
letter that the sender has not yet been assigned the account for collection, if the
communication as a whole, using the collector's letterhead, represents otherwise.
4. Knowledge required. A party does not violate this provision unless he knows
or should have known that his form letter will be used to mislead consumers into believing
that someone other than the creditor is involved in collecting the debt.
5. Participation by debt collector. A debt collector that uses letters as his
only collection tool does not violate this section, merely because he charges a flat rate
per letter, if he is meaningfully "participating in the collection of a debt."
The consumer is not misled in such cases, as he would be in the case of a party who
supplied the creditor with form letters and provided little or no additional service in
the collection process. The performance of other tasks associated with collection (e.g.,
handling verification requests, negotiating payment arrangements, keeping individual
records) is evidence that such a party is "participating in the collection."
SECTION 813 -- CIVIL LIABILITY
Section 813 (A) imposes civil liability in the form of (1)
actual damages, (2) discretionary penalties, and (3) costs and attorney's fees; (B)
discusses relevant factors a court should consider in assessing damages; (C) exculpates a
collector who maintains reasonable procedures from liability for an unintentional error;
(D) permits actions to be brought in federal or state courts within one year from the
violation; and (E) shields a defendant who relies on an advisory opinion of the
1. Employee liability. Since the employees of a debt collection agency are
"debt collectors," they are liable for violations to the same extent as the
2. Damages. The courts have awarded "actual damages" for FDCPA
violations that were not just out-of-pocket expenses, but included damages for personal
humiliation, embarrassment, mental anguish, or emotional distress.
3. Application of statute of limitation period. The section's one-year statute
of limitations applies only to private lawsuits, not to actions brought by a government
4. Advisory opinions. A party may act in reliance on a formal advisory opinion
of the Commission pursuant to 16 CFR 1.1-1.4, without risk of civil liability. This
protection does not extend to reliance on this Commentary or other informal staff
SECTION 814 -- ADMINISTRATIVE ENFORCEMENT
Section 814 provides that the principal [53 Fed. Reg. 50110]
federal enforcement agency for the FDCPA is the Federal Trade Commission, but assigns
enforcement power to other authorities empowered by certain federal statutes to regulate
financial, agricultural, and transportation activities, where FDCPA violations relate to
acts subject to those laws.
SECTION 815 -- REPORTS TO CONGRESS BY COMMISSION
Section 815 requires the Commission to submit an annual report to
Congress which discusses its enforcement and other activities administering the FDCPA,
assesses the degree of compliance, and makes recommendations.
SECTION 816 -- RELATIONS TO STATE LAWS
Section 816 provides that the FDCPA pre-empts state laws only to the
extent that those laws are inconsistent with any provision of the FDCPA, and then only to
the extent of the inconsistency. A state law is not inconsistent if it gives consumers
greater protection than the FDCPA.
1. Inconsistent laws. Where a state law provides protection to the consumer
equal to, or greater than, the FDCPA, it is not pre-empted by the federal statute.
SECTION 817 -- EXEMPTION FOR STATE REGULATION
Section 817 orders the Commission to exempt any class of debt
collection practices from the FDCPA within any state if it determines that state laws
regulating those practices are substantially similar to the FDCPA, and contain adequate
provision for enforcement.
1. State exemptions. A state with a debt collection law may apply to the
Commission for an exemption. The Commission must grant the exemption if the state's law is
substantially similar to the FDCPA, and there is adequate provision for enforcement. The
Commission has published procedures for processing such applications (16 CFR 901).
SECTION 818 -- EFFECTIVE DATE
Section 818 provides that the FDCPA took effect six months from the
date of its enactment.
1. Key dates. The FDCPA was approved September 20, 1977, and became effective
March 20, 1978.
[FR Doc. 88-28573 Filed 12-12-88; 8:45 am]
1. Such a communication would be signed by the individual debt
collector, without indicating that the letter is from a debt collection firm.
2. Blackwell v. Professional Business Services of Georgia, Inc., 526
F. Supp. 535, 538-39 (N.D. Ga. 1981).
3. See discussion of FDCPA section 804 in item 1 of this section of
4. The principal proposals were that the staff add to the Commentary
(1) a lengthy new comment in section 803(6) that a party could be a "debt
collector" with respect to some accounts but not others, (2) a definition of
"default" in connection with section 803(6)(G)(iii) (now section 803(6)(F)(iii))
concerning accounts not in default when received, (3) a statement that section 806(3) does
not prohibit a debt collector from responding to a specific credit reference inquiry from
a creditor, (4) substantial new material to various comments in section 807(14) to cover a
situation where one debt collector provides services as a contractor for another debt
collector, (5) a statement that section 808(1) does not prohibit an agreement between a
consumer and debt collector, and (6) a statement that the verification required by section
809(b) may be provided by an agent of the debt collector.
5. Although most of the issues raised in those letters related to
attorneys as debt collectors, a few of them also asked for interpretations on other issues
as well. For the sake of completeness, all significant staff opinions included in this
correspondence (which has been widely circulated already) have been included in the
6. Section 803(6), comments 1-2.
7. Section 803(2), comment 2; section 809(a), comments 6-7.
8. Section 803(5), comment 1.
9. Section 803(5), comment 2.
10. Section 803(6)(A), comment 4(a).
11. Section 803(6)(C), comment 4(c).
12. Section 811, comment 6.
13. Section 805(b), comment 8.
14. Section 805(b), comment 8.
15. Section 806(3-4), comment 5.
16. Section 806(3-4), comment 6.
17. Section 809(a), comment 7.
18. Section 809(b), comment 1.
19. Section 809(a), comment 8.
20. Section 811, comment 5.