Default Judgments against Military Personnel.

Debtors have rights! This has been the purpose of this blog. To explain the rights of debtors as it pertains to collection efforts, lawsuits and judgments. I have a new one that I will not go into detail about the background, but take from it what you need and feel free to email me if you have further questions.

Pursuant to the Soldiers and Sailors Civil Relief Act (SSCRA) a default judgment may not be obtained against an active soldier or sailor. An affidavit of non-military service is required to obtain a default judgment, but is often overlooked by the plaintiff's attorney and the ruling judge.

While I am not an attorney and do not provide legal advice, I have studied the SSCRA and the use of it in vacating default judgments. Any active duty military personnel receiving a default judgment may file a motion to vacate judgment and pray for relief under SSCRA. In doing so, the defendant should request the affidavit of non-military status that should have been filed by the plaintiff with the motion for default judgment. This may sound confusing, but it is a simple process. Sample forms are available online. The instructions may be a little overwhelming, but go the simple route, find the form you need, fill in your info and go to the clerk of the court. They will help you.

Soldiers & Sailors Civil Relief Act (SSCRA)
Main Menu
Join the Discussion Visit Our Message Forum Related Resources • SSCRA Simplified • SSCRA Resources • Employment Rights • Military Lawyers Note: On 19 December, 2003, President Bush has signed the “Servicemembers Civil Relief Act,” new legislation to help ease the economic and legal burdens on military personnel called to active duty status in Operation Iraqi Freedom. Authored by Veterans’ Affairs Committee Chairman Chris Smith, the Servicemembers Civil Relief Act updates and strengthens the previous Soldiers & Sailors Civil Relief Act of 1940 (SSCRA). For complete details, see Servicemembers Civil Relief Act, Simplified, and Servicemembers Civil Relief Act in Detail. Chapter 1 - Introduction Chapter 2 - General Provisions Chapter 3 - General Relief, Interest Rates, and Judicial Proceedings Chapter 4 - Rents, Mortgages, and Foreclosures Chapter 5 - Insurance Chapter 6 -Taxation Chapter 7 - Public Lands

FDCPA Section 801 & 802

§ 801. Short Title [15 USC 1601 note]

This title may be cited as the "Fair Debt Collection Practices Act."

This is the initial post written to dissect the Fair Debt Collection Practices Act for ease of comprehension for consumers. Section 801 really has nothing to interpret as it is just the "Short Title".

It says the Fair Debt Collection Practices Act is called The Fair Debt Collection Practices Act. Now that I have wowed you with my mastery of the English language and interpretation of congressional writings, I'll move on to another section.

§ 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.

Section 802 is a declaration of the problems addressed and need for the FDCPA. Subtitle a addresses the adverse effects of not having regulation in collection practices. It states that harassment and abuse from collectors is invading privacy, causing tension in households and causing consumers to lose their jobs.

Subtitle b cites "inadequate" consumer protection suggesting reform to the Consumer Credit Collections Act. It's pretty straight forward and needs no interpretation.

Subtitle c says the abusive acts are not necessary, there is a means to collect the debt without causing the afore mentioned "injuries" to consumers. As many of us will agree, there is no need for collectors to be nasty and aggressive when collecting a debt. The majority of the time, consumers are not running from it because they don't want to pay, just their inability to do so. Financial hardship can come to anyone at anytime. Whether it be an illness to you or your family, a loss of income, the adjustable rate killer that is sweeping the nation with ARM's locking so high home owners have to choose between a credit card or their home, or just getting in too far.

Subtitle d refers to collectors operating outside of the state in which the consumer lives. Interstate commerce, or commerce from two different states falls under a different code of laws than intrastate or same state commerce. The FDCPA transcends the boundary of interstate commerce and encompasses collectors operating in any state to be regulated at the Federal level.

Subtitle e is a statement of purpose for the FDCPA. In short, it's to regulate collectors so as to not advantage those who use abusive practices and to set a guide in which all collectors should maintain a professional non-threatening manner when collecting from consumers.

That's it for now, more sections to come later. These are the easy ones!

Nationwide Debt Collector fined $1.3 Million by the FTC

Debt collectors are a peculiar bunch. While some are friendly and at least give off the appearance to be "helping" you resolve your debts there are some out there who choose to use the "scare" approach. They will call you repeatedly, use buzz words like lawsuit, garnish, and judgment. As average Joe Consumer you may not be aware that most of these buzz words are illegal and considered bad practices. In continuing to publish and make you aware of your rights You will see an FTC release below regarding one of these bad collectors as well as a link to the FTC website to file a complaint.

For Release: November 6, 2007

Nationwide Debt Collector Will Pay $1.3 Million to Settle FTC Charges

A Texas-based debt collection company will pay more than $1.3 million to settle Federal Trade Commission charges that it misled, threatened, and harassed consumers in violation of federal law.

“Debt collectors who get complaints from consumers should not only take notice, but also take action,” said Lydia B. Parnes, Director of the FTC’s Bureau of Consumer Protection. “The message from this case is clear: Either comply with the law or face stiff penalties.”

According to an FTC complaint, in many instances, collectors for LTD Financial Services, L.P., which collects on about 1.25 million consumer accounts per year, violated the FTC Act and the Fair Debt Collection Practices Act by falsely threatening or implying that LTD would garnish consumers’ wages, seize or attach their property, or initiate lawsuits or criminal actions against them if they failed to pay.

LTD collectors, who collect in English and Spanish, allegedly called consumers at their place of work despite knowing it was inconvenient for them to receive calls there, and disclosed the existence of debts to family members, employers, co-workers, and neighbors. They also allegedly harassed consumers and used abusive tactics such as immediately calling back after consumers hung up on them, and sometimes used racial slurs and profanity. According to the complaint, in some instances, front-line supervisors and mid-level managers either participated or were aware of such practices under their supervision but failed to impose sufficient discipline.

Hundreds of consumer complaints against LTD are filed with the FTC, the Houston Better Business Bureau (BBB), various state attorneys general, and the company itself, the FTC’s complaint states, noting that LTD’s response to complaints “is cavalier at best,” that complaints from attorneys general and the BBB alleging egregious law violations frequently are dismissed without significant investigation, and that collectors often go unpunished or merely receive a warning. The complaint also alleges that LTD’s internal compliance program regularly catches collectors violating federal law, but even multiple egregious violations often go without serious punishment, and that senior managers either turn a blind eye to the unlawful acts or fail to exercise the supervision necessary to recognize the problems.

Under the proposed settlement, LTD will pay a $1.375 million civil penalty. In addition, LTD and its owners, Timothy Feldman and Leonard Pruzansky, and its top managers, John Brewster and Derrek Davis, are permanently prohibited from misrepresenting to consumers that nonpayment of a debt will result in garnishment of wages, seizure or attachment of property, or lawsuits. They also are permanently barred from using false, deceptive, or misleading representations in connection with the collection of any debt, communicating with a consumer at any unusual time or place, including their place of employment, or harassing, oppressing, or abusing any person.

The settlement requires the defendants to clearly and conspicuously disclose to consumers that they may stop the company from contacting them about the debt, and to notify consumers that they may contact a special LTD physical address, e-mail address, or toll-free phone number if they have a complaint about the way the company is collecting the debt.

The Commission vote to refer the complaint and consent decree to the Department of Justice for filing was 5-0. On behalf of the FTC, the documents were filed by the Department of Justice in the U.S. District Court for the Southern District of Texas, Houston Division.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A consent decree is subject to court approval and has the force of law when signed by the judge.

Copies of the complaint and proposed consent decree are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

MEDIA CONTACT:

Frank Dorman
Office of Public Affairs
202-326-2674

STAFF CONTACT:

Thomas B. Carter
FTC Southwest Region, Dallas
214-979-9372

To file a complaint against a collector contact your State Attorney General and the FTC.

FTC Complaints
State Attorney Generals

Fair Debt Collection Practices Act (FDCPA)

Over the next month or so I'm going to assist in dissecting and putting into plain English the Fair Debt Collection Practices Act (FDCPA). This should assist consumers in knowing what the collection agencies can and cannot do and make you aware of violations when dealing with collectors. Keep in mind, the original creditor or bank does not fall under the same guidelines as collectors and are not governed by the FTC, but rather the OCC.

Here is the FDCPA in it's entirety. I'll start with the first section in my next post.

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 post judgment 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 1692e]

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.

(2) The false representation of --

(A) the character, amount, or legal status of any debt; or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to --

(A) lose any claim or defense to payment of the debt; or

(B) become subject to any practice prohibited by this title.

(7) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.

(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.

(13) The false representation or implication that documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization.

(15) The false representation or implication that documents are not legal process forms or do not require action by the consumer.

(16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 603(f) of this Act.

§ 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).

Pros & Cons of Popular Debt Solutions.

Today consumers have several options for resolving outstanding unsecured debts. There is plenty of press proving the positive of one method or the negative of another, but I have yet to find an unbiased informative piece that shows both pro and con of each vessel. Consumer options range from a Consolidation Loan, CCCS, Bankruptcy, or Debt Settlement and are all useful and viable dependent upon the consumers' needs and situation.

Consolidation Loans are an option for consumers who have maintained good credit history and can be taken out to pay off credit cards and make one payment to a finance company. While some may see this as robbing Peter to pay Paul, it can be very helpful for those driven to get rid of debt and cut interest while not sacrificing their credit score. On the downside, it is very easy to get in much further if a consumer falls back into the rut of using their credit cards.

Most people that are looking for help with their debts will not fit into a consolidation loan because their debt to income ratio or previous payment history does not fit into conventional lending guidelines. When consumers are looking for help, it is usually past the point of loans for redemption.

CCCS is pushed by the credit card companies as "non-profit" and the preferred method of assisting consumers. CCCS programs run 7-10 years much like a bankruptcy and often have a higher monthly payment than your normal minimums. CCCS companies negotiate your interest rates down, you make one payment to them for your minimums plus their $75 "donation" or "maintenance" fee. One thing to keep in mind is that a CCCS shows on your credit report as a third party much like a bankruptcy. If a consumer can easily afford their minimums and does not mind the third party mark, this is a good way to go. It effectively eliminates your debt sooner than paying the minimums and does not allow for consumers to continue spending and get further in. CCCS companies receive kickbacks from the banks for their work in collecting the full balances. On the down side, CCCS companies ultimately work for the bank and not the consumer and banks are reporting only a 13% success rate.

Debt settlement is the quickest way to resolve unsecured debts without bankruptcy or a loan. Consumers hire a debt settlement or debt negotiation firm to assist them in saving money and reducing the balances owed by paying less than the full balance. Monthly savings and fee payments are less than normal minimums and ease household cash flow for consumers. The debt settlement process is normally completed in 18-36 months with all consumer accounts being settled at an average of 40-45% of the debts owed. While some banks are put off by debt settlement, it is an emerging and growing industry that the banks are recognizing and working to help improve relationships. Consumers have to weight the positive and negative here. Debt settlement is the fastest and most cost effective manner to eliminate debt, however it does come at a price and risk. Consumers put off their payments to creditors in order to save for settlement which reflects a poor pay history, but as accounts are settled, consumer debt to income ratio goes down which improves credit scoring. With no payments being made consumers are open for suit by the creditors. They still have a legal right to collect the monies owed.

Bankruptcy is the last option for consumers and with the obvious stigma surrounding it and the changing of laws in 2005 is it the least desirable. While it does structure the repayment of your debts for less than full balance like debt settlement and take 7-10 years like CCCS it has the most impact on your credit while granting you the most protection. Always seek counsel for a bankruptcy and research the attorney you choose to make sure they have your best interests in mind.

There are several other places to look for information about your options, I would suggest you speak with a representative from both a CCCS and debt settlement agency when making your decision. Debt settlement is a relatively open industry and buyer beware when choosing which company to use. You can visit www.tascsite.org for a list of settlement companies that have set standards of operation and are reputable companies driven to assist consumers.

Dealing with Summary Judgments.

I know this is boring to most, but hopefully someone will find it helpful.

If you read the first part about answering a summons, this is a continuation and involves a different type of answer and suit. Creditor's are awarded default judgments when a debtor does not show or answer. Even after answering a creditor will sometimes attempt a summary judgment. Summary judgments are like murder cases with no witnesses or evidence and consumer's are not given a fair trial. You as the debtor have a right to know how they arrived at the balance they claim.

If a creditor attempts summary judgment you can file a motion to dismiss the motion for summary judgment. In your motion, request a bill of particulars and an itemization of the charges and claim filed. This will protect you from creditors charging unlawful interest and obtaining a judgment for a much higher amount than is actually owed.

Feel free to email me if you have unanswered questions and I'll see if I can steer you in the right direction to find answers.

Answering a Court Summons for a Debt.

This is just a little informational piece for anyone who might be dealing with delinquent debts. It's an overwhelming problem today and many debtors are left with no options and take the ostrich approach and bury their heads in the sand. Don't run or hide! Face your debts and speak the truth. Most debtors have the sense of obligation and want to make right on their debts, but have the inability to do so. Everyone has had some sort of hardship in their life that may have left them behind the eight ball when it comes to finances.

A few things to keep in mind, there is no such thing as a debtors prison. Just because you got behind on something does not mean you are a bad person, or that you are a criminal and need to be taken to jail.

You may receive a summons to appear or file a written answer. Be mindful of the dates and make sure you do file some type of written answer. In most cases the balance that a creditor is suing for will be much higher than the balance you actually owe. You have a right to dispute that balance. The creditor will be going for a summary judgment which is like a murder trial with no evidence or witnesses. In your answer, request a bill of particulars or a time for discovery in which the plaintiff should produce your original signature on a cardholder agreement, every statement from the initial opening of the account through the last charge added to the account. The last charge may be a late fee, over-limit fee, or interest.

Once your answer has been filed with the court clerk, send a certified copy to the opposing attorney to insure that it is properly delivered. From there sit back and wait. watch the correspondence and make sure that you do not miss a court date or appearance. Many people fought hard for your right to a fair trial and you deserve one. Don't let the big banks or collectors bully you.

*This is not intended to be legal advice, just an example of ways in which to help yourself when dealing with consumer debt and attempting to regain financial control.