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Mass. AG Adopts Regulation Deeming Most Collection Activity ‘Unfair and Deceptive’

The Massachusetts attorney general has adopted a regulation deeming it illegal for a debt collector to telephone a Massachusetts resident to request payment of a debt or for a debt collector or a creditor to file a lawsuit to collect a debt. The regulation is available here.

The regulation states it is made under the attorney general’s authority to issue regulations interpreting section 93A of the Massachusetts statutes, a general consumer protection statute. It is issued on an “emergency basis” and supplements the attorney general’s existing regulations (available here).

The prohibition extends to “debts” which are defined as:

money or its equivalent which is, or is alleged to be, more than 30 days past due and owing, unless a different period is agreed to by the debtor, under a single account as a result of a purchase, lease, or loan of goods, services, or real or personal property, for personal, family or household purposes or as a result of a loan of money which is obtained for personal, family or household purposes whether or not the obligation has been reduced to judgment.

The scope of the definition is broad and would encompass most past due consumer receivables.

The regulation is effective immediately and will last for 90 days “or until the State of Emergency Period Expires.”

Prohibits Most Legal Activities by Creditors and Debt Collectors

During the period of time the regulations are effective, neither creditors nor their agents may:

  • initiate, file, or threaten to file any new collection lawsuit;
  • initiate, threaten to initiate, or act upon any legal or equitable remedy for the garnishment, seizure, attachment, or withholding of wages, earnings, property or funds for the payment of a debt to a creditor;
  • initiate, threaten to initiate, or act upon any legal or equitable remedy for the repossession of any vehicle;
  • apply for, cause to be served, enforce, or threaten to apply for, cause to be served or enforce any capias warrant;
  • visit or threaten to visit the household of a debtor at any time;
  • visit or threaten to visit the place of employment of a debtor at any time; and
  • confront or communicate in person with a debtor regarding the collection of a debt in any public place at any time.

It excludes actions on mortgage debt or rent. In the case of “telephone, gas, and electric utility companies regulated by M.G.L. c. 164 and the Department of Public Utilities or the Department of Telecommunications and Cable,” such entities can continue to “visit or threaten to visit the household of a debtor at any time.”

Prohibits Debt Collectors from Making any Telephone Calls

Debt collectors are prohibited from making any telephone communication during the effective period of the emergency regulation unless it is made “in response to a request made by the debtor for said communication.” Also excepted are (1) “communications initiated solely for the purpose of informing a debtor of a rescheduled court appearance date or discussing a mutually convenient date for a rescheduled court appearance;” or (2) “(a) any attempt to collect a debt which is, or is alleged to be, owing as a result of a loan secured by a mortgage on real property; or (b) any attempt to collect a debt that is, or is alleged to be, owing by a tenant to an owner, as those terms are defined by 940 CMR 3:01.”

Creditors can continue to make telephone calls, subject to the preexisting regulations.

Our Boston office is prepared to assist in providing further guidance. Please contact Donald Maurice or Brady Hermann at (617) 861-6035.

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Donald Maurice provides counsel to the financial services industry, successfully litigating matters in the state and federal courts in individual and class actions. He has successfully argued before the Third, Fourth and Eighth Circuit U.S. Courts of Appeals, and has represented the financial services industry before several courts including as counsel for amicus curiae before the United States Supreme Court. He counsels clients in regulatory actions before the CFPB, and other federal and state regulators and in the development and testing of debt collection compliance systems. Don is peer-rated AV by Martindale-Hubbell, the worldwide guide to lawyers. In addition to being a frequent speaker and author on consumer financial services law, he serves as outside counsel to RMA International, on the governing Board of Regents of the American College of Consumer Financial Services Lawyers and on the Governing Committee of the Conference on Consumer Finance Law. From 2014 to 2017, he chaired the ABA's Bankruptcy and Debt Collection Subcommittee. For more information, see https://mauricewutscher.com/attorneys/donald-maurice/

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