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SECTION 808 --
Unfair
Practices
Section
808 prohibits a debt
collector from using "unfair or
unconscionable means" in his
debt collection activity. It
provides eight examples of
unfair practices.
1.
Scope. Prohibited actions
are not limited to the
eight subsections listed as
examples of activities that
violate this
provision.
2.
Elements of unfairness. A
debt collector's act in
collecting a debt may be
"unfair" if it causes
injury to the consumer that
is (1) substantial, (2) not
outweighed by
countervailing benefits to
consumers or competition,
and (3) not reasonably
avoidable by the
consumer.
Section
808(1) prohibits
collecting any amount unless
the amount is expressly
authorized by the agreement
creating the debt or is
permitted by law.
1.
Kinds of amounts
covered. For purposes
of this section, "amount"
includes not only the debt,
but also any incidental
charges, such as collection
[53 Fed. Reg. 50108]
charges, interest, service
charges, late fees, and bad
check handling
charges.
2.
Legality of
charges. A debt
collector may attempt to
collect a fee or charge in
addition to the debt if
either (a) the charge is
expressly provided for in
the contract creating the
debt and the charge is not
prohibited by state law, or
(b) the contract is silent
but the charge is otherwise
expressly permitted by
state law. Conversely, a
debt collector may not
collect an additional
amount if either (a) state
law expressly prohibits
collection of the amount or
(b) the contract does not
provide for collection of
the amount and state law is
silent.
3.
Legality of fee under
state law. If state
law permits collection of
reasonable fees, the
reasonableness (and
consequential legality) of
these fees is determined by
state law.
4.
Agreement not in
writing. A debt
collector may establish an
"agreement" without a
written contract. For
example, he may collect a
service charge on a
dishonored check based on a
posted sign on the
merchant's premises
allowing such a charge, if
he can demonstrate that the
consumer knew of the
charge.
Section
808(2) prohibits
accepting a check postdated by
more than five days unless
timely written notice is given
to the consumer prior to
deposit.
Section
808(3) prohibits
soliciting any postdated check
for purposes of threatening or
instituting criminal
prosecution.
Section
808(4) prohibits
depositing a postdated check
prior to its date.
1.
Postdated checks. These
provisions do not totally
prohibit debt collectors
from accepting postdated
checks from consumers, but
rather prohibit debt
collectors from misusing
such
instruments.
Section
808(5) prohibits
causing any person to incur
telephone or telegram charges
by concealing the true purpose
of the
communication.
1.
Long distance calls to the
debt collector. A debt
collector may not call the
consumer collect or ask a
consumer to call him long
distance without disclosing
the debt collector's
identity and the
communication's
purpose.
2.
Relation to other section.
A debt collector who
conceals his purpose in
asking consumers to call
long distance may also
violate section 807(11),
which requires the debt
collector to disclose his
purpose in some
communications.
Section
808(6) prohibits
taking nonjudicial action to
enforce a security interest on
property, or threatening to do
so, where (A) there is not
present right to the
collateral, (B) there is no
present intent to exercise such
rights, or (C) the property is
exempt by law.
1.
Security
enforcers. Because the
FDCPA's definition of "debt
collection" includes
parties whose principal
business is enforcing
security interests only for
section 808(6) purposes,
such parties (if they do
not otherwise fall within
the definition) are subject
only to this provision and
not to the rest of the
FDCPA.
Section
808(7) prohibits
"Communicating with a consumer
regarding a debt by post
card."
1.
Debt. A debt
collector does not violate
this section if he sends a
post card to a consumer
that does not communicate
the existence of the debt.
However, if he had not
previously disclosed that
he is attempting to collect
a debt, he would violate
section 807(11), which
requires this
disclosure.
Section
808(8) prohibits
showing anything other than the
debt collector's address, on
any envelope in any written
communication to the consumer,
except that a debt collector
may use his business name if it
does not indicate that he is in
the debt collection
business.
1.
Business names
prohibited on
envelopes. A debt
collector may not put on
his envelope any business
name with "debt" or
"collector" in it, or any
other name that indicates
he is in the debt
collection business. A debt
collector may not use the
American Collectors
Association logo on an
envelope.
2.
Collector's name.
Whether a debt
collector/consumer
reporting agency's use of
his own "credit bureau" or
other name indicates that
he is in the collection
business, and thus violates
the section, is a factual
issue to be determined in
each individual
case.
3.
Harmless words or
symbols. A debt
collector does not violate
this section by using an
envelope printed with words
or notations that do not
suggest the purpose of the
communication. For example,
a collector may communicate
via an actual telegram or
similar service that uses a
Western Union (or other
provider) logo and the word
"telegram" (or similar
word) on the envelope, or a
letter with the word
"Personal" or
"Confidential" on the
envelope.
4.
Transparent
envelopes. A debt
collector may not use a
transparent envelope, which
reveals language or symbols
indicating his debt
collection business,
because it is the
equivalent of putting
information on an
envelope.
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