Mass. Division of Banks Fines Companies $10k for Collecting Without Proper License

The Massachusetts Division of Banks has entered into a consent order with a group of companies that were accused of operating in the state without a license in which the companies will pay a penalty of $10,000 while also ceasing from engaging in any business activity that is prohibited in Massachusetts, including collecting without a license.

A copy of the consent order with First American National, First American Funding, B&B Funding, and Coastal Financial can be accessed by clicking here.

The regulator was made aware last October that the companies were engaging in collection activity in Massachusetts without having the proper licenses, and that they had never applied for such a license. The companies allegedly engaged in the business of a debt collector in Massachusetts between May 2020 and December 2021 without the proper paperwork to do so, according to the consent order.

Interestingly enough, the May 2020 date is just a month after the Division of Banks issued a cease-and-desist order to First American Trust, an entity that is “related” to the companies in this latest consent order. First American Trust was accused of engaging in debt collection activity in Massachusetts between November 2019 and April 2020 without a license. Since receiving the cease-and-desist order, First American Trust has used a licensed company to collect in Massachusetts, according to the consent order.

Along with paying the $10,000 fine and promising to cease and desist from engaging in any business activity that is prohibited in Massachusetts, the companies will also “establish, implement, and maintain adequate internal policies and procedures” to ensure that they engage in any prohibited activity in Massachusetts, according to the consent order.

The Division of Banks said it will not “pursue any other remedial measures, sanctions, or penalties relative to this matter unless the Division is made aware of material information” that is not part of the consent order in question.

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