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Consumer Legal Rights
You as a consumer have various legal rights enacted by Congress to protect you. The information in this section contains a brief description of your general legal rights. For additional information on your legal rights, visit the United States Federal Trade Commission (FTC) web site at www.ftc.gov.
· Fair Debt Collection Practices Act
· Fair Credit Reporting Act
· Fair Credit Billing Act
· Fair Credit and Charge Card Disclosure Act
· Equal Credit Opportunity Act
FAIR DEBT COLLECTION PRACTICES ACT (FDCPA)
Violations of the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act, commonly referred to as the FDCPA, is a Federal law designed to protect you, the consumer. It clearly spells out the rights you have. It prohibits debt collectors from using dishonest and abusive methods of collecting money owed. If you communicate to the debt collector, in writing, that you wish for them to cease and desist further collection tactics, they are required by law to honor that request. In other words, once you have sent a collector a cease-and-desist letter, the collectors are required by law to stop any verbal communication with you. You also have the right to dispute any debt. Upon first contact to you by a debt collector, that debt collector has 5 days to send you a letter stating you have 30-days to dispute the debt. If, within 30-days, you send a letter to the debt collector disputing the debt and requesting verification of the debt, the debt collector must cease all further collection activities until the debt is properly verified.
The following actions are illegal practices in attempting to collect a debt:
· A debt collector calls your work after you tell the collector not to call your work.
· A debt collector calls before 8 a.m. or after 9 p.m. in your time zone.
· A debt collector makes an excessive number of phone calls. (More than 1 call per day.)
· A debt collector claims to be an attorney or sends letters that looks like they are from a law office. (Unless that debt collector is actually an attorney.)
· A debt collector continues to contact you even after they have been made aware that you are being represented by an attorney.
· A debt collector tells someone other than you, your spouse, or your attorney that you owe them money.
· A debt collector misrepresents the amount of money owed, or the legal status of the debt.
· A debt collector fails to honor your request for them to cease communication to you.
· A debt collector gives false information regarding your credit.
· A debt collector threatens to garnish your wages or take your personal property. (This can only be done with a court order.)
· A debt collector uses obscene language.
· A debt collector threatens you, or your family.
· A debt collector does not give you a 3-10 day notice before cashing a check post-dated issued by five (5) or more days.
· A debt collector threatens you with criminal prosecution or tries to imply your committing a crime that you could be arrested for and go to jail.
If the debt collector has violated any of your rights under the Fair Debt Collection Practices Act, contact us at Financial Solutions Legal Center, to submit copies (not originals) of all correspondence (including proof of payment, letters, call logs, etc.) and we will refer you to the State Attorney General's Office and to the Federal Trade Commission who will notify the debt collector that they are in violation of the FDCPA. The debt collector may be required to pay you money in fines and damages, or we can refer you to one of our network of attorneys to represent you.
FAIR DEBT COLLECTION PRACTICES ACT
15 USC Section 1692
THE FAIR DEBT COLLECTION PRACTICES ACT
As amended by Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996)
To amend the Consumer Credit Protection Act to prohibit abusive practices by debt collectors.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) is amended by adding at the end thereof the following new title:
TITLE VIII - DEBT COLLECTION PRACTICES [Fair Debt Collection Practices Act]
Sec.
801. Short Title
802. Congressional findings and declaration of purpose
803. Definitions
804. Acquisition of location information
805. Communication in connection with debt collection
806. Harassment or abuse
807. False or misleading representations
808. Unfair practice
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
¤ 801. Short Title [15 USC 1601 note]
This title may be cited as the "Fair Debt Collection Practices Act."
¤ 802. Congressional findings and declarations of purpose [15 USC 1692]
(a) There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
(b) Existing laws and procedures for redressing these injuries are inadequate to protect consumers.
(c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.
(d) Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce.
(e) It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
¤ 803. Definitions [15 USC 1692a]
As used in this title --
(1) The term "Commission" means the Federal Trade Commission.
(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.
(3) The term "consumer" means any natural person obligated or allegedly obligated to pay any debt.
(4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.
(5) The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.
(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include --
(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;
(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;
(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;
(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;
(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and
(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.
(7) The term "location information" means a consumer's place of abode and his telephone number at such place, or his place of employment.
(8) The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing.
¤ 804. Acquisition of location information [15 USC 1692b]
Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall --
(1) identify himself, state that he is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify his employer;
(2) not state that such consumer owes any debt;
(3) not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information;
(4) not communicate by post card;
(5) not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt; and
(6) after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney's name and address, not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to the communication from the debt collector.
¤ 805. Communication in connection with debt collection [15 USC 1692c]
(a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt --
(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antimeridian and before 9 o'clock postmeridian, local time at the consumer's location;
(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or
(3) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication.
(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except --
(1) to advise the consumer that the debt collector's further efforts are being terminated;
(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
If such notice from the consumer is made by mail, notification shall be complete upon receipt.
(d) For the purpose of this section, the term "consumer" includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator.
¤ 806. Harassment or abuse [15 USC 1692d]
A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)1 of this Act.
(4) The advertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller's identity.
¤ 807. False or misleading representations [15 USC 1962e]
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.
(2) The false representation of --
(A) the character, amount, or legal status of any debt; or
(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.
(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.
(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.
(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.
(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to --
(A) lose any claim or defense to payment of the debt; or
(B) become subject to any practice prohibited by this title.
(7) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.
(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.
(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.
(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.
(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.
(13) The false representation or implication that documents are legal process.
(14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization.
(15) The false representation or implication that documents are not legal process forms or do not require action by the consumer.
(16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 603(f) of this Act.
¤ 808. Unfair practices [15 USC 1692f]
A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
(2) The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collector's intent to deposit such check or instrument not more than ten nor less than three business days prior to such deposit.
(3) The solicitation by a debt collector of any postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.
(4) Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.
(5) Causing charges to be made to any person for communications by concealment of the true propose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.
(6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if --
(A) there is no present right to possession of the property claimed as collateral through an enforceable security interest;
(B) there is no present intention to take possession of the property; or
(C) the property is exempt by law from such dispossession or disablement.
(7) Communicating with a consumer regarding a debt by post card.
(8) Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.
¤ 809. Validation of debts [15 USC 1692g]
(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.
¤ 810. Multiple debts [15 USC 1692h]
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 directions.
¤ 811. Legal actions by debt collectors [15 USC 1692i]
(a) Any debt collector who brings any legal action on a debt against any consumer shall --
(1) in the case of an action to enforce an interest in real property securing the consumer's obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or
(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity --
(A) in which such consumer signed the contract sued upon; or
(B) in which such consumer resides at the commencement of the action.
(b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt collectors.
¤ 812. Furnishing certain deceptive forms [15 USC 1692j]
(a) It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.
(b) Any person who violates this section shall be liable to the same extent and in the same manner as a debt collector is liable under section 813 for failure to comply with a provision of this title.
¤ 813. Civil liability [15 USC 1692k]
(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of --
(1) any actual damage sustained by such person as a result of such failure;
(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or
(B) in the case of a class action, (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and
(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs.
(b) In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors --
(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional; or
(2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the extent to which the debt collector's noncompliance was intentional.
(c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
(d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.
(e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
¤ 814. Administrative enforcement [15 USC 1692l]
(a) Compliance with this title shall be enforced by the Commission, except to the extend that enforcement of the requirements imposed under this title is specifically committed to another agency under subsection (b). For purpose of the exercise by the Commission of its functions and powers under the Federal Trade Commission Act, a violation of this title shall be deemed an unfair or deceptive act or practice in violation of that Act. All of the functions and powers of the Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance by any person with this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act, including the power to enforce the provisions of this title in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.
(b) Compliance with any requirements imposed under this title shall be enforced under --
(1) section 8 of the Federal Deposit Insurance Act, in the case of --
(A) national banks, by the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than national banks), by the Federal Reserve Board; and
(C) banks the deposits or accounts of which are insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation;
(2) section 5(d) of the Home Owners Loan Act of 1933, section 407 of the National Housing Act, and sections 6(i) and 17 of the Federal Home Loan Bank Act, by the Federal Home Loan Bank Board (acting directing or through the Federal Savings and Loan Insurance Corporation), in the case of any institution subject to any of those provisions;
(3) the Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any Federal credit union;
(4) subtitle IV of Title 49, by the Interstate Commerce Commission with respect to any common carrier subject to such subtitle;
(5) the Federal Aviation Act of 1958, by the Secretary of Transportation with respect to any air carrier or any foreign air carrier subject to that Act; and
(6) the Packers and Stockyards Act, 1921 (except as provided in section 406 of that Act), by the Secretary of Agriculture with respect to any activities subject to that Act.
(c) For the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (b), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this title any other authority conferred on it by law, except as provided in subsection (d).
(d) Neither the Commission nor any other agency referred to in subsection (b) may promulgate trade regulation rules or other regulations with respect to the collection of debts by debt collectors as defined in this title.
¤ 815. Reports to Congress by the Commission [15 USC 1692m]
(a) Not later than one year after the effective date of this title and at one-year intervals thereafter, the Commission shall make reports to the Congress concerning the administration of its functions under this title, including such recommendations as the Commission deems necessary or appropriate. In addition, each report of the Commission shall include its assessment of the extent to which compliance with this title is being achieved and a summary of the enforcement actions taken by the Commission under section 814 of this title.
(b) In the exercise of its functions under this title, the Commission may obtain upon request the views of any other Federal agency which exercises enforcement functions under section 814 of this title.
¤ 816. Relation to State laws [15 USC 1692n]
This title does not annul, alter, or affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to debt collection practices, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this title if the protection such law affords any consumer is greater than the protection provided by this title.
¤ 817. Exemption for State regulation [15 USC 1692o]
The Commission shall by regulation exempt from the requirements of this title any class of debt collection practices within any State if the Commission determines that under the law of that State that class of debt collection practices is subject to requirements substantially similar to those imposed by this title, and that there is adequate provision for enforcement.
¤ 818. Effective date [15 USC 1692 note]
This title takes effect upon the expiration of six months after the date of its enactment, but section 809 shall apply only with respect to debts for which the initial attempt to collect occurs after such effective date.
Approved September 20, 1977
ENDNOTES
1. So in original; however, should read "604(a)(3)."
LEGISLATIVE HISTORY:
Public Law 95-109 [H.R. 5294]
HOUSE REPORT No. 95-131 (Comm. on Banking, Finance, and Urban Affairs).
SENATE REPORT No. 95-382 (Comm. on Banking, Housing, and Urban Affairs).
CONGRESSIONAL RECORD, Vol. 123 (1977):
Apr. 4, considered and passed House.
Aug. 5, considered and passed Senate, amended.
Sept. 8, House agreed to Senate amendment.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 39:
Sept. 20, Presidential statement.
AMENDMENTS:
SECTION 621, SUBSECTIONS (b)(3), (b)(4) and (b)(5) were amended to transfer certain administrative enforcement responsibilities, pursuant to Pub. L. 95-473, ¤ 3(b), Oct. 17, 1978. 92 Stat. 166; Pub. L. 95-630, Title V. ¤ 501, November 10, 1978, 92 Stat. 3680; Pub. L. 98-443, ¤ 9(h), Oct. 4, 1984, 98 Stat. 708.
SECTION 803, SUBSECTION (6), defining "debt collector," was amended to repeal the attorney at law exemption at former Section (6)(F) and to redesignate Section 803(6)(G) pursuant to Pub. L. 99-361, July 9, 1986, 100 Stat. 768. For legislative history, see H.R. 237, HOUSE REPORT No. 99-405 (Comm. on Banking, Finance and Urban Affairs). CONGRESSIONAL RECORD: Vol. 131 (1985): Dec. 2, considered and passed House. Vol. 132 (1986): June 26, considered and passed Senate.
SECTION 807, SUBSECTION (11), was amended to affect when debt collectors must state (a) that they are attempting to collect a debt and (b) that information obtained will be used for that purpose, pursuant to Pub. L. 104-208 ¤ 2305, 110 Stat. 3009 (Sept. 30, 1996).
Fair Credit Reporting Act (FCRA)
Fair Credit Reporting Act (15 U.S.C. §§ 1681-1681(v), as amended)
The Act protects information collected by consumer reporting agencies such as credit bureaus, medical information companies and tenant screening services. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the Act. Companies that provide information to consumer reporting agencies also have specific legal obligations, including the duty to investigate disputed information. Also, users of the information for credit, insurance, or employment purposes must notify the consumer when an adverse action is taken on the basis of such reports. Further, users must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the consumer.
Under the Fair Credit Reporting Act, you have the right to the following:
Know all the information that's in your credit report. In most cases, you have the right to know the source of that information
Obtain a free copy of your report within 60 days of a credit denial. Otherwise, the credit bureau may charge you a nominal fee for this service. Know who has requested your report in the last year.
Confidentiality of personal medical information. Such information can only be released with your permission. Approve access to your credit record by prospective employers. Have the credit bureau investigate an error in your report. You must notify the bureau of your dispute in writing. The credit bureau must notify you within five days of a completed investigation and fix mistakes in your record within 30 days. Then it must send a corrected report to anyone who asked for a copy in the past six months. At your request, the bureau must also send a revised report to potential employers who have requested it within the past two years. If you disagree with the credit bureau's conclusion, you have a right to include a brief explanation in your credit report. Request credit bureaus stop selling your name to companies that make pre-approved credit offers.
Fair Credit Reporting Act
United States Code
TITLE 15 - COMMERCE AND TRADE
CHAPTER 41 - CONSUMER CREDIT PROTECTION
SUBCHAPTER III - CREDIT REPORTING AGENCIES
Section 1681. Congressional Findings And Statement Of Purpose
Section 1681a. Definitions; Rules Of Construction
Section 1681b. Permissible Purposes Of Consumer Reports
Section 1681c. Requirements Relating To Information Contained In Consumer Reports
Section 1681d Disclosure Of Investigative Consumer Reports
Section 1681e. Compliance Procedures
Section 1681f. Disclosures To Governmental Agencies
Section 1681g. Disclosures To Consumers
Section 1681h. Conditions And Form Of Disclosure To Consumers
Section 1681i. Procedure In Case Of Disputed Accuracy
Section 1681j. Charges For Certain Disclosures
Section 1681k. Public Record Information For Employment Purposes
Section 1681l. Restrictions On Investigative Consumer Reports
Section 1681m. Requirements On Users Of Consumer Reports
Section 1681n. Civil Liability For Willful Noncompliance
Section 1681o. Civil Liability For Negligent Noncompliance
Section 1681p. Jurisdiction Of Courts; Limitation Of Actions
Section 1681q. Obtaining Information Under False Pretenses
Section 1681r. Unauthorized Disclosures By Officers Or Employees
Section 1681s. Administrative Enforcement
Section 1681s-1. Information On Overdue Child Support Obligations
Section 1681s-2. Responsibilities Of Furnishers Of Information To Consumer Reporting Agencies
Section 1681t. Relation To State Laws
Section 1681u. Disclosures To FBI For Counterintelligence Purposes
Section 1681v. Disclosures To Governmental Agencies For Counterterrorism Purposes
Section 1681. Congressional findings and statement of purpose
(a) Accuracy and fairness of credit reporting
The Congress makes the following findings:
(1) The banking system is dependent upon fair and accurate credit
reporting. Inaccurate credit reports directly impair the
efficiency of the banking system, and unfair credit reporting
methods undermine the public confidence which is essential to the
continued functioning of the banking system.
(2) An elaborate mechanism has been developed for investigating
and evaluating the credit worthiness, (FOOTNOTE 1) credit standing,
credit capacity, character, and general reputation of consumers.
(FOOTNOTE 1) So in original. Probably should be
''creditworthiness,''.
(3) Consumer reporting agencies have assumed a vital role in
assembling and evaluating consumer credit and other information on
consumers.
(4) There is a need to insure that consumer reporting agencies
exercise their grave responsibilities with fairness, impartiality,
and a respect for the consumer's right to privacy.
(b) Reasonable procedures
It is the purpose of this subchapter to require that consumer
reporting agencies adopt reasonable procedures for meeting the
needs of commerce for consumer credit, personnel, insurance, and
other information in a manner which is fair and equitable to the
consumer, with regard to the confidentiality, accuracy, relevancy,
and proper utilization of such information in accordance with the
requirements of this subchapter.
Section 1681a. Definitions; rules of construction
(a) Definitions and rules of construction set forth in this
section are applicable for the purposes of this subchapter.
(b) The term ''person'' means any individual, partnership,
corporation, trust, estate, cooperative, association, government or
governmental subdivision or agency, or other entity.
(c) The term ''consumer'' means an individual.
(d) Consumer Report. -
(1) In general. - The term ''consumer report'' means any
written, oral, or other communication of any information by a
consumer reporting agency bearing on a consumer's credit
worthiness, (FOOTNOTE 1) credit standing, credit capacity,
character, general reputation, personal characteristics, or mode
of living which is used or expected to be used or collected in
whole or in part for the purpose of serving as a factor in
establishing the consumer's eligibility for -
(FOOTNOTE 1) So in original. Probably should be
''creditworthiness,''.
(A) credit or insurance to be used primarily for personal,
family, or household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 1681b of this
title.
(2) Exclusions. - The term ''consumer report'' does not include
-
(A) any -
(i) report containing information solely as to transactions
or experiences between the consumer and the person making the
report;
(ii) communication of that information among persons
related by common ownership or affiliated by corporate
control; or
(iii) communication of other information among persons
related by common ownership or affiliated by corporate
control, if it is clearly and conspicuously disclosed to the
consumer that the information may be communicated among such
persons and the consumer is given the opportunity, before the
time that the information is initially communicated, to
direct that such information not be communicated among such
persons;
(B) any authorization or approval of a specific extension of
credit directly or indirectly by the issuer of a credit card or
similar device;
(C) any report in which a person who has been requested by a
third party to make a specific extension of credit directly or
indirectly to a consumer conveys his or her decision with
respect to such request, if the third party advises the
consumer of the name and address of the person to whom the
request was made, and such person makes the disclosures to the
consumer required under section 1681m of this title; or
(D) a communication described in subsection (o) of this
section.
(e) The term ''investigative consumer report'' means a consumer
report or portion thereof in which information on a consumer's
character, general reputation, personal characteristics, or mode of
living is obtained through personal interviews with neighbors,
friends, or associates of the consumer reported on or with others
with whom he is acquainted or who may have knowledge concerning any
such items of information. However, such information shall not
include specific factual information on a consumer's credit record
obtained directly from a creditor of the consumer or from a
consumer reporting agency when such information was obtained
directly from a creditor of the consumer or from the consumer.
(f) The term ''consumer reporting agency'' means any person
which, for monetary fees, dues, or on a cooperative nonprofit
basis, regularly engages in whole or in part in the practice of
assembling or evaluating consumer credit information or other
information on consumers for the purpose of furnishing consumer
reports to third parties, and which uses any means or facility of
interstate commerce for the purpose of preparing or furnishing
consumer reports.
(g) The term ''file'', when used in connection with information
on any consumer, means all of the information on that consumer
recorded and retained by a consumer reporting agency regardless of
how the information is stored.
(h) The term ''employment purposes'' when used in connection with
a consumer report means a report used for the purpose of evaluating
a consumer for employment, promotion, reassignment or retention as
an employee.
(i) The term ''medical information'' means information or records
obtained, with the consent of the individual to whom it relates,
from licensed physicians or medical practitioners, hospitals,
clinics, or other medical or medically related facilities.
(j) Definitions Relating to Child Support Obligations. -
(1) Overdue support. - The term ''overdue support'' has the
meaning given to such term in section 666(e) of title 42.
(2) State or local child support enforcement agency. - The term
''State or local child support enforcement agency'' means a State
or local agency which administers a State or local program for
establishing and enforcing child support obligations.
(k) Adverse Action. -
(1) Actions included. - The term ''adverse action'' -
(A) has the same meaning as in section 1691(d)(6) of this
title; and
(B) means -
(i) a denial or cancellation of, an increase in any charge
for, or a reduction or other adverse or unfavorable change in
the terms of coverage or amount of, any insurance, existing
or applied for, in connection with the underwriting of
insurance;
(ii) a denial of employment or any other decision for
employment purposes that adversely affects any current or
prospective employee;
(iii) a denial or cancellation of, an increase in any
charge for, or any other adverse or unfavorable change in the
terms of, any license or benefit described in section
1681b(a)(3)(D) of this title; and
(iv) an action taken or determination that is -
(I) made in connection with an application that was made
by, or a transaction that was initiated by, any consumer,
or in connection with a review of an account under section
1681b(a)(3)(F)(ii) of this title; and
(II) adverse to the interests of the consumer.
(2) Applicable findings, decisions, commentary, and orders. -
For purposes of any determination of whether an action is an
adverse action under paragraph (1)(A), all appropriate final
findings, decisions, commentary, and orders issued under section
1691(d)(6) of this title by the Board of Governors of the Federal
Reserve System or any court shall apply.
(l) Firm Offer of Credit or Insurance. - The term ''firm offer of
credit or insurance'' means any offer of credit or insurance to a
consumer that will be honored if the consumer is determined, based
on information in a consumer report on the consumer, to meet the
specific criteria used to select the consumer for the offer, except
that the offer may be further conditioned on one or more of the
following:
(1) The consumer being determined, based on information in the
consumer's application for the credit or insurance, to meet
specific criteria bearing on credit worthiness (FOOTNOTE 2) or
insurability, as applicable, that are established -
(FOOTNOTE 2) So in original. Probably should be
''creditworthiness''.
(A) before selection of the consumer for the offer; and
(B) for the purpose of determining whether to extend credit
or insurance pursuant to the offer.
(2) Verification -
(A) that the consumer continues to meet the specific criteria
used to select the consumer for the offer, by using information
in a consumer report on the consumer, information in the
consumer's application for the credit or insurance, or other
information bearing on the credit worthiness (FOOTNOTE 2) or
insurability of the consumer; or
(B) of the information in the consumer's application for the
credit or insurance, to determine that the consumer meets the
specific criteria bearing on credit worthiness (FOOTNOTE 2) or
insurability.
(3) The consumer furnishing any collateral that is a
requirement for the extension of the credit or insurance that was
-
(A) established before selection of the consumer for the
offer of credit or insurance; and
(B) disclosed to the consumer in the offer of credit or
insurance.
(m) Credit or Insurance Transaction That Is Not Initiated by the
Consumer. - The term ''credit or insurance transaction that is not
initiated by the consumer'' does not include the use of a consumer
report by a person with which the consumer has an account or
insurance policy, for purposes of -
(1) reviewing the account or insurance policy; or
(2) collecting the account.
(n) State. - The term ''State'' means any State, the Commonwealth
of Puerto Rico, the District of Columbia, and any territory or
possession of the United States.
(o) Excluded Communications. - A communication is described in
this subsection if it is a communication -
(1) that, but for subsection (d)(2)(D) of this section, would
be an investigative consumer report;
(2) that is made to a prospective employer for the purpose of -
(A) procuring an employee for the employer; or
(B) procuring an opportunity for a natural person to work for
the employer;
(3) that is made by a person who regularly performs such
procurement;
(4) that is not used by any person for any purpose other than a
purpose described in subparagraph (A) or (B) of paragraph (2);
and
(5) with respect to which -
(A) the consumer who is the subject of the communication -
(i) consents orally or in writing to the nature and scope
of the communication, before the collection of any
information for the purpose of making the communication;
(ii) consents orally or in writing to the making of the
communication to a prospective employer, before the making of
the communication; and
(iii) in the case of consent under clause (i) or (ii) given
orally, is provided written confirmation of that consent by
the person making the communication, not later than 3
business days after the receipt of the consent by that
person;
(B) the person who makes the communication does not, for the
purpose of making the communication, make any inquiry that if
made by a prospective employer of the consumer who is the
subject of the communication would violate any applicable
Federal or State equal employment opportunity law or
regulation; and
(C) the person who makes the communication -
(i) discloses in writing to the consumer who is the subject
of the communication, not later than 5 business days after
receiving any request from the consumer for such disclosure,
the nature and substance of all information in the consumer's
file at the time of the request, except that the sources of
any information that is acquired solely for use in making the
communication and is actually used for no other purpose, need
not be disclosed other than under appropriate discovery
procedures in any court of competent jurisdiction in which an
action is brought; and
(ii) notifies the consumer who is the subject of the
communication, in writing, of the consumer's right to request
the information described in clause (i).
(p) Consumer Reporting Agency That Compiles and Maintains Files
on Consumers on a Nationwide Basis. - The term ''consumer reporting
agency that compiles and maintains files on consumers on a
nationwide basis'' means a consumer reporting agency that regularly
engages in the practice of assembling or evaluating, and
maintaining, for the purpose of furnishing consumer reports to
third parties bearing on a consumer's credit worthiness, (FOOTNOTE
3) credit standing, or credit capacity, each of the following
regarding consumers residing nationwide:
(FOOTNOTE 3) So in original. Probably should be
''creditworthiness,''.
(1) Public record information.
(2) Credit account information from persons who furnish that
information regularly and in the ordinary course of business.
Section 1681b. Permissible purposes of consumer reports
(a) In general
Subject to subsection (c) of this section, any consumer reporting
agency may furnish a consumer report under the following
circumstances and no other:
(1) In response to the order of a court having jurisdiction to
issue such an order, or a subpoena issued in connection with
proceedings before a Federal grand jury.
(2) In accordance with the written instructions of the consumer
to whom it relates.
(3) To a person which it has reason to believe -
(A) intends to use the information in connection with a credit
transaction involving the consumer on whom the information is to
be furnished and involving the extension of credit to, or review
or collection of an account of, the consumer; or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the
underwriting of insurance involving the consumer; or
(D) intends to use the information in connection with a
determination of the consumer's eligibility for a license or
other benefit granted by a governmental instrumentality required
by law to consider an applicant's financial responsibility or
status; or
(E) intends to use the information, as a potential investor or
servicer, or current insurer, in connection with a valuation of,
or an assessment of the credit or prepayment risks associated
with, an existing credit obligation; or
(F) otherwise has a legitimate business need for the
information -
(i) in connection with a business transaction that is
initiated by the consumer; or
(ii) to review an account to determine whether the consumer
continues to meet the terms of the account.
(4) In response to a request by the head of a State or local
child support enforcement agency (or a State or local government
official authorized by the head of such an agency), if the person
making the request certifies to the consumer reporting agency that
-
(A) the consumer report is needed for the purpose of
establishing an individual's capacity to make child support
payments or determining the appropriate level of such payments;
(B) the paternity of the consumer for the child to which the
obligation relates has been established or acknowledged by the
consumer in accordance with State laws under which the obligation
arises (if required by those laws);
(C) the person has provided at least 10 days' prior notice to
the consumer whose report is requested, by certified or
registered mail to the last known address of the consumer, that
the report will be requested; and
(D) the consumer report will be kept confidential, will be used
solely for a purpose described in subparagraph (A), and will not
be used in connection with any other civil, administrative, or
criminal proceeding, or for any other purpose.
(5) To an agency administering a State plan under section 654 of
title 42 for use to set an initial or modified child support award.
(b) Conditions for furnishing and using consumer reports for
employment purposes
(1) Certification from user
A consumer reporting agency may furnish a consumer report for
employment purposes only if -
(A) the person who obtains such report from the agency
certifies to the agency that -
(i) the person has complied with paragraph (2) with respect
to the consumer report, and the person will comply with
paragraph (3) with respect to the consumer report if
paragraph (3) becomes applicable; and
(ii) information from the consumer report will not be used
in violation of any applicable Federal or State equal
employment opportunity law or regulation; and
(B) the consumer reporting agency provides with the report,
or has previously provided, a summary of the consumer's rights
under this subchapter, as prescribed by the Federal Trade
Commission under section 1681g(c)(3) of this title.
(2) Disclosure to consumer
(A) In general
Except as provided in subparagraph (B), a person may not
procure a consumer report, or cause a consumer report to be
procured, for employment purposes with respect to any consumer,
unless -
(i) a clear and conspicuous disclosure has been made in
writing to the consumer at any time before the report is
procured or caused to be procured, in a document that
consists solely of the disclosure, that a consumer report may
be obtained for employment purposes; and
(ii) the consumer has authorized in writing (which
authorization may be made on the document referred to in
clause (i)) the procurement of the report by that person.
(B) Application by mail, telephone, computer, or other similar
means
If a consumer described in subparagraph (C) applies for
employment by mail, telephone, computer, or other similar
means, at any time before a consumer report is procured or
caused to be procured in connection with that application -
(i) the person who procures the consumer report on the
consumer for employment purposes shall provide to the
consumer, by oral, written, or electronic means, notice that
a consumer report may be obtained for employment purposes,
and a summary of the consumer's rights under section
1681m(a)(3) of this title; and
(ii) the consumer shall have consented, orally, in writing,
or electronically to the procurement of the report by that
person.
(C) Scope
Subparagraph (B) shall apply to a person procuring a consumer
report on a consumer in connection with the consumer's
application for employment only if -
(i) the consumer is applying for a position over which the
Secretary of Transportation has the power to establish
qualifications and maximum hours of service pursuant to the
provisions of section 31502 of title 49, or a position
subject to safety regulation by a State transportation
agency; and
(ii) as of the time at which the person procures the report
or causes the report to be procured the only interaction
between the consumer and the person in connection with that
employment application has been by mail, telephone, computer,
or other similar means.
(3) Conditions on use for adverse actions
(A) In general
Except as provided in subparagraph (B), in using a consumer
report for employment purposes, before taking any adverse
action based in whole or in part on the report, the person
intending to take such adverse action shall provide to the
consumer to whom the report relates -
(i) a copy of the report; and
(ii) a description in writing of the rights of the consumer
under this subchapter, as prescribed by the Federal Trade
Commission under section 1681g(c)(3) of this title.
(B) Application by mail, telephone, computer, or other similar
means
(i) If a consumer described in subparagraph (C) applies for
employment by mail, telephone, computer, or other similar
means, and if a person who has procured a consumer report on
the consumer for employment purposes takes adverse action on
the employment application based in whole or in part on the
report, then the person must provide to the consumer to whom
the report relates, in lieu of the notices required under
subparagraph (A) of this section and under section 1681m(a) of
this title, within 3 business days of taking such action, an
oral, written or electronic notification -
(I) that adverse action has been taken based in whole or in
part on a consumer report received from a consumer reporting
agency;
(II) of the name, address and telephone number of the
consumer reporting agency that furnished the consumer report
(including a toll-free telephone number established by the
agency if the agency compiles and maintains files on
consumers on a nationwide basis);
(III) that the consumer reporting agency did not make the
decision to take the adverse action and is unable to provide
to the consumer the specific reasons why the adverse action
was taken; and
(IV) that the consumer may, upon providing proper
identification, request a free copy of a report and may
dispute with the consumer reporting agency the accuracy or
completeness of any information in a report.
(ii) If, under clause (B)(i)(IV), the consumer requests a
copy of a consumer report from the person who procured the
report, then, within 3 business days of receiving the
consumer's request, together with proper identification, the
person must send or provide to the consumer a copy of a report
and a copy of the consumer's rights as prescribed by the
Federal Trade C |
