HOUSE AMENDED PRIOR PRINTER'S NOS. 1264, 1452 PRINTER'S NO. 1798
No. 1038 Session of 1999
INTRODUCED BY PICCOLA, DENT, HART, SALVATORE, BOSCOLA, MUSTO, WAGNER, WENGER, MOWERY, MADIGAN, PUNT, LEMMOND, MELLOW, TARTAGLIONE AND SLOCUM, JUNE 18, 1999
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, MARCH 20, 2000
AN ACT 1 Establishing the Fair Credit Extension Uniformity Act; and 2 providing for debt collection trade practices and penalties. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Short title. 6 This act shall be known and may be cited as the Fair Credit 7 Extension Uniformity Act. 8 Section 2. Scope of act. 9 This act establishes what shall be considered unfair methods 10 of competition and unfair or deceptive acts or practices with 11 regard to the collection of debts. 12 Section 3. Definitions. 13 The following words and phrases when used in this act shall 14 have the meanings given to them in this section unless the 15 context clearly indicates otherwise: 16 "Communication." The conveying of information regarding a
1 debt directly or indirectly to any person through any medium. 2 "Consumer." A natural person residing in this Commonwealth 3 who owes or is alleged to owe a debt or one who has incurred or 4 is alleged to have incurred liability for the debt within this 5 Commonwealth, including, but not limited to, a comaker, 6 guarantor, surety or parent if the consumer is under 18 years of 7 age. The term includes the consumer's guardian, executor or 8 administrator. 9 "Creditor." A person, including agents, servants or 10 employees conducting business under the name of a creditor and 11 within this Commonwealth, to whom a debt is owed or alleged to 12 be owed. 13 "Debt." An actual or alleged past due obligation, claim, 14 demand, note or other similar liability of a consumer to pay 15 money, arising out of a single account as a result of a 16 purchase, lease or loan of goods, services or real or personal 17 property for personal, family or household purposes or as a 18 result of a loan of money or extension of credit which is 19 obtained primarily for personal, family or household purposes, 20 provided, however, that money which is owed or alleged to be 21 owed as a result of a loan secured by a purchase money mortgage 22 on real estate shall not be included within the definition of 23 debt. The term also includes any amount owed as a tax to any 24 political subdivision of this Commonwealth. Tax includes an 25 assessment, any interest, penalty, fee or other amount permitted 26 by law to be collected. Debt does not include any such amount 27 owed to the United States or the Commonwealth. 28 "Debt collector." 29 (1) A person not a creditor conducting business within 30 this Commonwealth, acting on behalf of a creditor, engaging 19990S1038B1798 - 2 -
1 or aiding directly or indirectly in collecting a debt owed or 2 alleged to be owed a creditor or assignee of a creditor. 3 (2) The term does not include: 4 (i) Any officer or employee of a creditor while, in 5 the name of the creditor, collecting debts for such 6 creditor. 7 (ii) A person while attempting to collect a debt on 8 behalf of a creditor, both of whom are related by common 9 ownership or affiliated by corporate control, if the 10 person acting as a debt collector does so only for 11 creditors to whom it is so related or affiliated and if 12 the principal business of the person is not the 13 collection of debts. 14 (iii) A person while collecting or attempting to 15 collect any debt owed or due or asserted to be owed or 16 due to another to the extent such activity: 17 (A) is incidental to a bona fide fiduciary 18 obligation or a bona fide escrow arrangement; 19 (B) concerns a debt which was originated by such 20 person; 21 (C) concerns a debt which was not in default at 22 the time it was obtained by such person; or 23 (D) concerns a debt obtained by such person as a 24 secured party in a commercial credit transaction 25 involving the creditor. 26 Persons included within this subparagraph shall be 27 considered creditors and not debt collectors for purposes 28 of this subchapter. 29 (iv) A person while serving or attempting to serve 30 legal process on another person in connection with the 19990S1038B1798 - 3 -
1 judicial enforcement of a debt. 2 (v) A person who is an elected or appointed official 3 of any political subdivision of this Commonwealth, who 4 collects or attempts to collect a tax or assessment owed 5 to the political subdivision which employs the person, 6 while that person is acting within the scope of his 7 elected or appointed position or employment. 8 (VI) ANY OFFICER OR EMPLOYEE OF THE COMMONWEALTH, TO <-- 9 THE EXTENT THAT COLLECTING OR ATTEMPTING TO COLLECT ANY 10 STUDENT LOAN DEBT IS IN THE PERFORMANCE OF HIS OR HER 11 OFFICIAL DUTIES. 12 (3) The term does include: 13 (i) A creditor who, in the process of collecting his 14 or her own debt, uses a name other than his or her own 15 which would indicate that a third person is collecting or 16 attempting to collect the debt. 17 (ii) An attorney, whenever such attorney attempts to 18 collect a debt, as herein defined, except in connection 19 with the filing or service of pleadings or discovery or 20 the prosecution of a lawsuit to reduce a debt to 21 judgment. 22 (iii) A person who sells or offers to sell forms 23 represented to be a collection system, device or scheme 24 which is intended or designed to collect debts. 25 (iv) A person, other than an elected or appointed 26 official of any political subdivision of this 27 Commonwealth, who collects or attempts to collect a tax 28 or assessment owed to any political subdivision of this 29 Commonwealth. 30 "Location information." A consumer's place of abode and his 19990S1038B1798 - 4 -
1 telephone number at such place or his place of employment. 2 "State." Any state, territory or possession of the United 3 States, the District of Columbia, the Commonwealth of Puerto 4 Rico or any political subdivision of any of the above. 5 Section 4. Unfair or deceptive acts or practices. 6 (a) By debt collectors.--It shall constitute an unfair or 7 deceptive debt collection act or practice under this act if a 8 debt collector violates any of the provisions of the Fair Debt 9 Collection Practices Act (Public Law 95-109, 15 U.S.C. § 1692 et 10 seq.). 11 (b) By creditors.--With respect to debt collection 12 activities of creditors in this Commonwealth, it shall 13 constitute an unfair or deceptive debt collection act or 14 practice under this act if a creditor violates any of the 15 following provisions: 16 (1) Any creditor communicating with any person other 17 than the consumer for the purpose of acquiring location 18 information about the consumer shall: 19 (i) identify himself, state that he is confirming or 20 correcting location information concerning the consumer, 21 and, only if expressly requested, identify his employer; 22 (ii) not state that such consumer owes any debt; 23 (iii) not communicate with any such person more than 24 once unless requested to do so by such person or unless 25 the creditor reasonably believes that the earlier 26 response of such person is erroneous or incomplete and 27 that such person now has correct or complete location 28 information; 29 (iv) not communicate by post card; 30 (v) not use any language or symbol on any envelope 19990S1038B1798 - 5 -
1 or in the contents of any communication effected by the 2 mails or telegram that indicates that the communication 3 relates to the collection of a debt; and 4 (vi) after the creditor knows the consumer is 5 represented by an attorney with regard to the subject 6 debt and has knowledge of or can readily ascertain such 7 attorney's name and address, not communicate with any 8 person other than that attorney unless the attorney fails 9 to respond within a reasonable period of time to 10 communication from the creditor. 11 (2) Without the prior consent of the consumer given 12 directly to the creditor or the express permission of a court 13 of competent jurisdiction, a creditor may not communicate 14 with a consumer in connection with the collection of any 15 debt: 16 (i) at any unusual time or place or a time or place 17 known or which should be known to be inconvenient to the 18 consumer. In the absence of knowledge of circumstances to 19 the contrary, a creditor shall assume that the convenient 20 time for communicating with a consumer is after 8 a.m. 21 and before 9 p.m., local time at the consumer's location; 22 (ii) if the creditor knows the consumer is 23 represented by an attorney with respect to such debt and 24 has knowledge of or can readily ascertain such attorney's 25 name and address unless the attorney fails to respond 26 within a reasonable period of time to a communication 27 from the creditor or unless the attorney consents to 28 direct communication with the consumer; or 29 (iii) at the consumer's place of employment if the 30 creditor knows or has reason to know that the consumer's 19990S1038B1798 - 6 -
1 employer prohibits the consumer from receiving such 2 communication. 3 (3) Except as provided in paragraph (1), without the 4 prior consent of the consumer given directly to the creditor 5 or the express permission of a court of competent 6 jurisdiction or as reasonably necessary to effectuate a 7 postjudgment judicial remedy, a creditor may not communicate, 8 in connection with the collection of any debt, with any 9 person other than the consumer, his attorney, a consumer 10 reporting agency if otherwise permitted by law, a debt 11 collector, the attorney of the debt collector or the attorney 12 of the creditor. 13 (4) A creditor may not engage in any conduct the natural 14 consequence of which is to harass, oppress or abuse any 15 person in connection with the collection of a debt. Without 16 limiting the general application of the foregoing, the 17 following conduct is a violation of this paragraph: 18 (i) The use or threat of use of violence or other 19 criminal means to harm the physical person, reputation or 20 property of any person. 21 (ii) The use of obscene or profane language or 22 language the natural consequence of which is to abuse the 23 hearer or reader. 24 (iii) The publication of a list of consumers who 25 allegedly refuse to pay debts, except to a consumer 26 reporting agency or to persons meeting the requirements 27 of section 1681a(f) or 1681b(a)(3) of the Fair Credit 28 Reporting Act (Public Law 91-508, 15 U.S.C. § 1681 et 29 seq.). 30 (iv) The advertisement for sale of any debt to 19990S1038B1798 - 7 -
1 coerce payment of the debt. 2 (v) Causing a telephone to ring or engaging any 3 person in telephone conversation repeatedly or 4 continuously with intent to annoy, abuse or harass any 5 person at the called number. 6 (vi) Except as provided in paragraph (1), the 7 placement of telephone calls without meaningful 8 disclosure of the caller's identity. 9 (5) A creditor may not use any false, deceptive or 10 misleading representation or means in connection with the 11 collection of any debt. Without limiting the general 12 application of the foregoing, the following conduct is a 13 violation of this paragraph: 14 (i) The false representation or implication that the 15 creditor is vouched for, bonded by or affiliated with the 16 United States or any state, including the use of any 17 badge, uniform or facsimile thereof. 18 (ii) The false representation of the character, 19 amount or legal status of any debt. 20 (iii) The false representation or implication that 21 any individual is an attorney or that any communication 22 is from an attorney. 23 (iv) The representation or implication that 24 nonpayment of any debt will result in the arrest or 25 imprisonment of any person or the seizure, attachment or 26 sale of any property of any person unless such action is 27 lawful and the creditor intends to take such action. 28 (v) The threat to take any action that cannot 29 legally be taken or that is not intended to be taken. 30 (vi) The false representation or implication that a 19990S1038B1798 - 8 -
1 sale, referral or other transfer of any interest in a 2 debt shall cause the consumer to lose any claim or 3 defense to payment of the debt or become subject to any 4 practice prohibited by this subchapter. 5 (vii) The false representation or implication that 6 the consumer committed any crime or other conduct in 7 order to disgrace the consumer. 8 (viii) Communicating or threatening to communicate 9 to any person credit information which is known or which 10 should be known to be false, including the failure to 11 communicate that a debt is disputed. 12 (ix) The use or distribution of any written 13 communication which simulates or is falsely represented 14 to be a document authorized, issued or approved by any 15 court, official or agency of the United States or any 16 state, or which creates a false impression as to its 17 source, authorization or approval. 18 (x) The use of any false representation or deceptive 19 means to collect or attempt to collect any debt or to 20 obtain information concerning a consumer. 21 (xi) The false representation or implication that 22 accounts have been turned over to innocent purchasers for 23 value. 24 (xii) The false representation or implication that 25 documents are legal process. 26 (xiii) The false representation or implication that 27 documents are not legal process forms or do not require 28 action by the consumer. 29 (6) A creditor may not use unfair or unconscionable 30 means to collect or attempt to collect any debt. Without 19990S1038B1798 - 9 -
1 limiting the general application of the foregoing, the 2 following conduct is a violation of this paragraph: 3 (i) The collection of any amount, including any 4 interest, fee, charge or expense incidental to the 5 principal obligation, unless such amount is expressly 6 authorized by the agreement creating the debt or 7 permitted by law. 8 (ii) The acceptance by a creditor from any person of 9 a check or other payment instrument postdated by more 10 than five days unless such person will be notified in 11 writing of the creditor's intent to deposit such check or 12 instrument not more than ten nor less than three business 13 days prior to such deposit. 14 (iii) The solicitation by a creditor of any 15 postdated check or other postdated payment instrument for 16 the purpose of threatening or instituting criminal 17 prosecution. 18 (iv) Depositing or threatening to deposit any 19 postdated check or other postdated payment instrument 20 prior to the date on such check or instrument. 21 (v) Causing charges to be made to any person for 22 communications by concealment of the true purpose of the 23 communication. Such charges include, but are not limited 24 to, collect telephone calls and telegram fees. 25 (vi) Taking or threatening to take any nonjudicial 26 action to effect dispossession or disablement of property 27 if: 28 (A) there is no present right to possession of 29 the property claimed as collateral through an 30 enforceable security interest; 19990S1038B1798 - 10 -
1 (B) there is no present intention to take 2 possession of the property; or 3 (C) the property is exempt by law from such 4 dispossession or disablement. 5 (vii) Communicating with a consumer regarding a debt 6 by post card. 7 (viii) Using any language or symbol, other than the 8 creditor's address, on any envelope when communicating 9 with a consumer by use of the mails or by telegram, 10 provided that a creditor may use its business name. 11 (c) Definition.--For the purpose of subsection (b)(2) and 12 (3), the term "consumer" includes the consumer's spouse, parent 13 (if the consumer is a minor), guardian, executor or 14 administrator. 15 Section 5. Enforcement and penalties. 16 (a) Unfair trade practices.--If a debt collector or creditor 17 engages in an unfair or deceptive debt collection act or 18 practice under this subchapter, it shall constitute a violation 19 of the act of December 17, 1968 (P.L.1224, No.387), known as the 20 Unfair Trade Practices and Consumer Protection Law. 21 (b) Jurisdiction.--An action to enforce any liability 22 created by this subchapter may be brought in any court of 23 competent jurisdiction in this Commonwealth within two years 24 from the date on which the violation occurs. 25 (c) Remedies.--Remedies available for violation of this 26 subchapter and the Fair Debt Collection Practices Act (Public 27 Law 95-109, 15 U.S.C. § 1692 et seq.) shall not be cumulative, 28 and debt collectors who violate this subchapter and the Federal 29 Fair Debt Collection Practices Act shall not incur cumulative 30 penalties. 19990S1038B1798 - 11 -
1 (d) Defenses.--A debt collector or creditor may not be held 2 liable in any action for a violation of this subchapter if the 3 debt collector or creditor shows by a preponderance of the 4 evidence that the violation was both not intentional and: 5 (1) resulted from a bona fide error, notwithstanding the 6 maintenance of procedures reasonably adapted to avoid any 7 such error; or 8 (2) resulted from good faith reliance upon incorrect 9 information offered by any person other than an agent, 10 servant or employee of the debt collector or creditor. 11 Section 6. Repeal. 12 The provisions of 37 Pa. Code Ch. 303 (relating to debt 13 collection trade practices) are repealed. 14 Section 7. Effective date. 15 This act shall take effect in 90 days. F11L42SFL/19990S1038B1798 - 12 -