Third-party debt collectors may also need to comply with state attorney general’s consumer protection regulations.
Aside from state statutory law requirements, Massachusetts has two sets of consumer protection regulations related to debt collection. One set is mandated by the Massachusetts Division of Banks and the other is mandated by the Massachusetts Attorney General. The Attorney General’s office issued a press release in 2007 stating that, “the Massachusetts Attorney General’s Debt Collection Regulations prohibit many unfair debt collection practices by creditors, 940 C.M.R. 7.00, and regulations of the Massachusetts Division of Banks prohibit unfair debt collection practices by debt collection agencies, 209 CMR 18.00.” However, this understanding has recently been called into question.
As part of a state-wide effort to update state government webpages, the Massachusetts Attorney General has added the following information to its webpage concerning the regulations, stating, “the regulations apply to original creditors (including their attorneys), third-party debt collection agencies, and buyers of delinquent debt who hire third parties, including attorneys, who collect debt on their behalf.” Currently, per a plain reading of the Attorney General’s Regulations, as well as the statement on the Attorney General’s website, it is most likely that third-party debt collectors will need to comply with both the regulations prescribed by the Massachusetts Division of Banks and the regulations prescribed by the state Attorney General.
Some compliance issues related to the Attorney General Regulations may include:
- The ability to speak to spouses; the Attorney General Regulations appear to prohibit discussions with a consumer’s spouse.
- The number of communications per week under Attorney General Regulations is two, whether or not the debt collector makes contact or leaves a message.
- When validating a debt and the debt collector is unable to obtain certain documentation, under the Attorney General Regulations the agency may continue collection efforts but should send notice along with any documentation. An example of such a notice might state: Pursuant to 940 CMR 7, our office requested documentation of this debt from our client. They are not in possession, custody or control at this time of any other documentation listed in 940 CMR 7 other than that which has been provided here. Should my client locate and provide my office with additional documents we reserve the right to supplement this response.
Currently, those who collect in Massachusetts should review their policies and procedures for any compliance concerns and seek the advice of an attorney familiar with the laws of the state with any questions. Until the Attorney General provides clarity on this issue, as a general compliance measure, debt collectors may want to comply with the most stringent of the two sets of regulations to the extent they differ.
Andy Madden, vice president of government and state affairs of ACA International, along with members of the New England Collector’s Association, have been in regular discussions with the Massachusetts Attorney General’s office and the Massachusetts Division of Banks since February of this year to obtain clarity for the industry on these, at times, inconsistent regulations and corresponding compliance obligations related to them. ACA will continue to monitor this issue and will provide its members with updates as they become available.
Additionally, ACA has updated the following SearchPoint documents to include the Massachusetts Attorney General Regulations: