Iowa Code: Debt Collection Definitions & Prohibited Practices
537.7101 Short title.
This article shall be known and may be cited as the “Iowa Debt Collection Practices Act”.
[C75, 77, 79, 81, §537.7101 ]
As used in this article, unless the context otherwise requires:
1. “Administrator” means the person designated in section 537.6103.
2. “Creditor”, for the purposes of this article, means the person to whom a debtor is obligated, either directly or indirectly, on a debt.
3. “Debt” means an actual or alleged obligation arising out of a consumer credit transaction, consumer rental purchase agreement, or a transaction which would have been a consumer credit transaction either if a finance charge was made, if the obligation was not payable in installments, if a lease was for a term of four months or less, or if a lease was of an interest in land. A debt includes a check as defined in section 554.3104 given in a transaction in connection with a consumer rental purchase agreement, in a transaction which was a consumer credit sale or in a transaction which would have been a consumer credit sale if credit was granted and if a finance charge was made, or in a transaction regulated under chapter 533D.
4. “Debt collection” means an action, conduct or practice in soliciting debts for collection or in the collection or attempted collection of a debt.
5. “Debt collector” means a person engaging, directly or indirectly, in debt collection, whether for the person, the person’s employer, or others, and includes a person who sells, or offers to sell, forms represented to be a collection system, device, or scheme, intended to be used to collect debts.
6. “Debtor”, for the purposes of this article, means the person obligated.
[C75, 77, 79, 81, §537.7102]
87 Acts, ch 137, §3; 89 Acts, ch 128, §4; 95 Acts, ch 139, §17
537.7103 Prohibited practices.
1. A debt collector shall not collect or attempt to collect a debt by means of an illegal threat, coercion or attempt to coerce. The conduct described in each of the following paragraphs is an illegal threat, coercion or attempt to coerce within the meaning of this subsection:
a. The use, or express or implicit threat of use, of force, violence or other criminal means, to cause harm to a person or to property of a person.
b. The false accusation or threat to falsely accuse a person of fraud or any other crime.
c. False accusations made to a person, including a credit reporting agency, or the threat to falsely accuse, that a debtor is willfully refusing to pay a just debt. However, a failure to reply to requests for payment and a failure to negotiate disputes in good faith are deemed willful refusal.
d. The threat to sell or assign to another an obligation of the debtor with an attending representation or implication that the result of the sale or assignment will be to subject the debtor to harsh, vindictive or abusive collection attempts.
e. The false threat that nonpayment of a debt may result in the arrest of a person or the seizure, garnishment, attachment or sale of property or wages of that person.
f. An action or threat to take an action prohibited by this chapter or any other law.
2. A debt collector shall not oppress, harass or abuse a person in connection with the collection or attempted collection of a debt of that person or another person. The following conduct is oppressive, harassing or abusive within the meaning of this subsection:
a. The use of profane or obscene language or language that is intended to abuse the hearer or reader and which by its utterance would tend to incite an immediate breach of the peace.
b. The placement of telephone calls to the debtor without disclosure of the name of the business or company the debt collector represents.
c. Causing expense to a person in the form of long distance telephone tolls, telegram fees or other charges incurred by a medium of communication by attempting to deceive or mislead persons as to the true purpose of the notice, letter, message or communication.
d. Causing a telephone to ring or engaging a person in telephone conversation repeatedly or continuously or at unusual hours or times known to be inconvenient, with intent to annoy, harass or threaten a person.
3. A debt collector shall not disseminate information relating to a debt or debtor as follows:
a. The communication or threat to communicate or imply the fact of a debt to a person other than the debtor or a person who might reasonably be expected to be liable for the debt, except with the written permission of the debtor given after default. For the purposes of this paragraph, the use of language on envelopes indicating that the communication relates to the collection of a debt is a communication of the debt. However, this paragraph does not prohibit a debt collector from any of the following:
(1) Notifying a debtor of the fact that the debt collector may report a debt to a credit bureau or engage an agent or an attorney for the purpose of collecting the debt.
(2) Reporting a debt to a credit reporting agency or any other person reasonably believed to have a legitimate business need for the information.
(3) Engaging an agent or attorney for the purpose of collecting a debt.
(4) Attempting to locate a debtor whom the debt collector has reasonable grounds to believe has moved from the debtor’s residence, where the purpose of the communication is to trace the debtor, and the content of the communication is restricted to requesting information on the debtor’s location.
(5) Communicating with the debtor’s employer or credit union not more than once during any three-month period when the purpose of the communication is to obtain an employer’s or credit union’s debt counseling services for the debtor. In the event no response is received by the debt collector from a communication to the debtor’s employer or credit union the debt collector may make one inquiry as to whether the communication was received. In addition a debt collector may respond to any communications by a debtor’s employer or credit union.
(6) Communicating with the debtor’s employer once during any one-month period, if the purpose of the communication is to verify with an employer the fact of the debtor’s employment and if the debt collector does not disclose, except as permitted in subparagraph (5), information other than the fact that a debt exists. This subparagraph does not authorize a debt collector to disclose to an employer the fact that a debt is in default.
(7) Communicating the fact of the debt not more than once in any three-month period, with the parents of a minor debtor, or with any trustee of any property of the debtor, conservator of the debtor or the debtor’s property, or guardian of the debtor. In addition, a debt collector may respond to inquiry from a parent, trustee, conservator or guardian.
(8) Communicating with the debtor’s spouse with the consent of the debtor, or responding to inquiry from the debtor’s spouse.
b. The disclosure, publication, or communication of information relating to a person’s indebtedness to another person, by publishing or posting a list of indebted persons, commonly known as “deadbeat lists”, or by advertising for sale a claim to enforce payment of a debt when the advertisement names the debtor.
c. The use of a form of communication to the debtor, except a telegram, an original notice or other court process, or an envelope displaying only the name and address of a debtor and the return address of the debt collector, intended or so designed as to display or convey information about the debt to another person other than the name, address, and phone number of the debt collector.
4. A debt collector shall not use a fraudulent, deceptive, or misleading representation or means to collect or attempt to collect a debt or to obtain information concerning debtors. The following conduct is fraudulent, deceptive, or misleading within the meaning of this subsection:
a. The use of a business, company or organization name while engaged in the collection of debts, other than the true name of the debt collector’s business, company, or organization or the name of the business or company the debt collector represents.
b. The failure to disclose in the initial written communication with the debtor and, in addition, if the initial communication with the debtor is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that 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 does not apply to either of the following:
(1) A formal pleading made in connection with a legal action.
(2) Communications issued directly by a state bank as defined in section 524.103 or its affiliate, a state bank chartered under the laws of any other state or its affiliate, a national banking association or its affiliate, a trust company, a federally chartered savings and loan association or savings bank or its affiliate, an out-of-state chartered savings and loan association or savings bank or its affiliate, a financial institution chartered by the federal home loan bank board, an association incorporated or authorized to do business under chapter 534, a state or federally chartered credit union, a credit union service organization, or a company or association organized or authorized to do business under chapter 515, 518, 518A, or 520, or an officer, employee, or agent of such company or association, provided the communication does not deceptively conceal its origin or its purpose.
c. A false representation that the debt collector has information in the debt collector’s possession or something of value for the debtor, which is made to solicit or discover information about the debtor.
d. The failure to clearly disclose the name and full business address of the person to whom the claim has been assigned at the time of making a demand for money.
e. An intentional misrepresentation, or a representation which tends to create a false impression of the character, extent or amount of a debt, or of its status in a legal proceeding.
f. A false representation, or a representation which tends to create a false impression, that a debt collector is vouched for, bonded by, affiliated with, or an instrumentality, agency or official of the state or an agency of federal, state or local government.
g. The use or distribution or sale of a written communication which simulates or is falsely represented to be a document authorized, issued or approved by a court, an official or other legally constituted or authorized authority, or which tends to create a false impression about its source, authorization or approval.
h. A representation that an existing obligation of the debtor may be increased by the addition of attorney’s fees, investigation fees, service fees or other fees or charges, when in fact such fees or charges may not legally be added to the existing obligation.
i. A false representation, or a representation which tends to create a false impression, about the status or true nature of, or services rendered by, the debt collector or the debt collector’s business.
5. A debt collector shall not engage in the following conduct to collect or attempt to collect a debt:
a. The seeking or obtaining of a written statement or acknowledgment in any form that specifies that a debtor’s obligation is one chargeable upon the property of either husband or wife or both, under section 597.14, when the original obligation was not in fact so chargeable.
b. The seeking or obtaining of a written statement or acknowledgment in any form containing an affirmation of an obligation which has been discharged in bankruptcy, without clearly disclosing the nature and consequences of the affirmation and the fact that the debtor is not legally obligated to make the affirmation. However, this subsection does not prohibit the accepting of promises to pay that are voluntarily written and offered by a bankrupt debtor.
c. The collection of or the attempt to collect from the debtor a part or all of the debt collector’s fee for services rendered, unless both of the following are applicable:
(1) The fee is reasonably related to the actions taken by the debt collector.
(2) The debt collector is legally entitled to collect the fee from the debtor.
d. The collection of or the attempt to collect interest or other charge, fee or expense incidental to the principal obligation unless the interest or incidental charge, fee, or expense is expressly authorized by the agreement creating the obligation and is legally chargeable to the debtor, or is otherwise legally chargeable.
e. A communication with a debtor when the debt collector knows that the debtor is represented by an attorney and the attorney’s name and address are known, or could be easily ascertained, unless the attorney fails to answer correspondence, return phone calls or discuss the obligation in question, within a reasonable time, or prior approval is obtained from the debtor’s attorney or when the communication is a response in the ordinary course of business to the debtor’s inquiry.
6. A debt collector shall not use or distribute, sell or prepare for use, a written communication that violates or fails to conform to United States postal laws and regulations.
7. A debt collector shall not collect or attempt to collect charges from an employee or an employee’s dependents for treatment rendered the employee by any health service provider, after receiving actual notice that a contested case proceeding for determination of liability of workers’ compensation benefits is pending as provided in section 85.27, subsection 6.
[C75, 77, 79, 81, §537.7103]
83 Acts, ch 101, §115; 87 Acts, ch 137, §4; 89 Acts, ch 296, §76; 97 Acts, ch 120, §1; 98 Acts, ch 1146, §1; 2005 Acts, ch 44, §2; 2007 Acts, ch 128, §4
Penalties, see §537.5301
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