Massachusetts Enacts Emergency Collection Regs, Bans Phone Calls to Debtors

The state of Massachusetts has enacted a number of emergency debt collection provisions regulating what collectors can do which will remain in effect until a month after the governor lifts the state of emergency.

For a copy of the new regulations, please click here.

Under the changes, a “debt collector” is defined as:

any person or business whose principal purpose is the collection of a debt, or who regularly collects or attempts to collect, directly or indirectly, a debt owed or due or asserted to be owed or due another. The term debt collector shall also include any person who buys or acquires debt that is in default at the time of purchase or acquisition and who seeks to collect such debt. The term debt collector shall include a creditor who, in the process of collecting his own debt, uses any name other than his own which would indicate that a third person is collecting or attempting to collect the debt. The term debt collector shall also include a person in a business the principal purpose of which is the enforcement of security interests.

The regulation also lists a number of exemptions that exclude certain individuals and entities from the definition of debt collector.

For the next 90 days, or until 30 days after the state of emergency in Massachusetts is lifted, it is now considered an unfair or deceptive act or practice for a debt collector to initiate a communication with any debtor via telephone, unless the collector was responding to a request from a debtor. The regulation does not apply to calls dealing with rescheduled court dates and does not apply to loans secured by a mortgage or debts owed by a tenant to an owner.

As well, under the new regulations, it is also now considered an unfair, or deceptive act or practice if collectors and creditors:

  • file or threaten to file a lawsuit
  • initiate or threaten to garnish an individual’s wages or seize other property or funds to repay a debt
  • initiate or threaten to have a vehicle repossessed
  • visit or threaten to visit the house of an individual with an unpaid debt
  • communicate in person with an individual with an unpaid debt in a public place

Among these regulations, they do not apply to loans secured by a mortgage or debts owed by a tenant to an owner. The regulation regarding visiting the household of a debtor does not apply to telephone, gas, or electric utility companies.

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