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                                 HOUSE AMENDED
        PRIOR PRINTER'S NOS. 1264, 1452               PRINTER'S NO. 1798

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

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
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     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
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     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
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     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.










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