940 CMR 7.00: Debt Collection Regulations

7.01: Purpose Of Regulations
7.02: Scope
7.03: Definitions
7.04: Contact with Debtors
7.05: Contact With Persons Residing In The Household Of A Debtor
7.06: Contact With Persons Other Than Debtors Or Persons Residing In The Household Of A Debtor
7.07: General Deceptive Acts Or Practices
7.08: Inspection
7.09: Post Dated Checks
7.10: Relation To Other Laws
7.11: Preemption By Federal Law

7.01: Purpose Of Regulations

The purpose of 940 CMR 7.00 is to establish standards, by defining unfair or deceptive acts or practices, for the collection of debts from persons within the Commonwealth of Massachusetts.

7.02: Scope

940 CMR 7.00 apply only to the collection of debts, as defined herein, and no conduct which is not the collection of debts or any part thereof is affected.

7.03: Definitions

Communication or communicating means conveying information directly or indirectly to any person orally through any medium excluding nonidentifying communications.

Creditor means any person and his agents, servants, employees, or attorneys engaged in collecting a debt owed or alleged to be owed to him by a debtor provided, however, that a person shall not be deemed to be engaged in collecting a debt, for the purpose of 940 CMR 7.00, if his activities are solely for the purpose of repossessing any collateral or property of the creditor securing such a debt.

Debt means 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; provided, however, that money which is, or is alleged to be, owing as a result of a loan secured by a first mortgage on real property, or in an amount in excess of $25,000, shall not be included within this definition of "debt".

Debtor means a natural person, or his guardian, administrator or executor, present or residing in Massachusetts who is allegedly personally liable for a debt.

Nonidentifying communication means any communication with any person other than the debtor in which the creditor does not convey any information except the name of the creditor and in which the creditor makes no inquiry other than to determine a convenient time and place to contact the debtor.

Person means any natural person, corporation, trust, partnership, incorporated or unincorporated association and any other legal entity; provided, however, that if a creditor comprises or employs more than one natural person, all such individuals shall be deemed to be one and the same "person" with respect to any debt owed or alleged to be owed to such a creditor.

7.04: Contact With Debtors

(1) It shall constitute an unfair or deceptive act or practice for a creditor to contact a debtor in any of the following ways:

(a) Threatening to sell or assign to another the obligation of a debtor with an attending representation or implication that the result of such sale or assignment would be that a debtor would lose any defense to the claim or would be subjected to harsh, vindictive or abusive collection attempts;

(b) Threatening that nonpayment of a debt will result in:

1. Arrest of any debtor; or

2. Garnishment of any wages of any debtor or the taking of other action requiring judicial order without informing the debtor that there must be in effect a judicial order permitting such garnishment or such other action before it can be taken;

(c) Using profane or obscene language;

(d) Communicating by telephone without disclosure of the name of the business or company of the creditor and without disclosure of the personal name of the individual making such communication provided, however, that any such individual utilizing a personal name other than his own shall use only one such personal name at all times and provided that a mechanism is established by such creditor to identify the person using such personal name;

(e) Causing expense to any debtor in the form of long distance telephone calls, or other similar charges;

(f) Engaging any debtor in communication via telephone, initiated by the creditor, in excess of two calls in each seven-day period at a debtor's residence and two calls in each 30-day period other than at a debtor's residence, for each debt, provided that for purposes of this division, a creditor may treat any billing address of the debtor as his place of residence;

(g) Placing telephone calls at times known to be times other than the normal waking hours of a debtor called, or if normal waking hours are not known, at any time other than between 8:00 a.m. and 9:00 p.m.;

(h) Placing any telephone calls to the debtor's place of employment if the debtor has made a written or oral request that such telephone calls not be made at the place of employment, provided, that any oral request shall be valid for only ten days unless the debtor provides written confirmation postmarked or delivered within seven days of such request. A debtor may at any time terminate such a request by written communication to the creditor;

(i) Failing to send the debtor the following notice in writing within 30 days after the first communication to a debtor at his place of employment regarding any debt, provided that a copy of the notice shall be sent every six months thereafter so long as collection activity by the creditor on the debt continues and the debtor has not made a written request as described in the previous division, but only if such first communication is made after the effective date of 940 CMR 7.00:

NOTICE OF IMPORTANT RIGHTS

YOU HAVE THE RIGHT TO MAKE A WRITTEN OR ORAL REQUEST THAT TELEPHONE CALLS REGARDING YOUR DEBT NOT BE MADE TO YOU AT YOUR PLACE OF EMPLOYMENT. ANY SUCH ORAL REQUEST WILL BE VALID FOR ONLY TEN DAYS UNLESS YOU PROVIDE WRITTEN CONFIRMATION OF THE REQUEST POSTMARKED OR DELIVERED WITHIN SEVEN DAYS OF SUCH REQUEST. YOU MAY TERMINATE THIS REQUEST BY WRITING TO THE CREDITOR.

(j) Visiting the household of a debtor at times other than the normal waking hours of such debtor, or if normal waking hours are not known, at any time other than between 8:00 a.m. and 9:00 p.m., provided however that in no event shall such visits, initiated by the creditor, exceed one in any 30-day period for each debt, excluding visits where no person is contacted in the household, unless a debtor consents in writing to more frequent visits, provided, further, that at all times the creditor must remain outside the household unless expressly invited inside by such debtor; and provided further, that visits to the household of a debtor which are solely for the purpose of repossessing any collateral or property of the creditor (including but not limited to credit cards, drafts, notes or the like), are not limited under this division;

(k) Visiting the place of employment of a debtor, unless requested unless requested by the debtor, excluding visits which are solely for the purpose of repossessing any collateral or property of the creditor, or confrontations with a debtor regarding the collection of a debt initiated by a creditor in a public place excluding courthouses, the creditor's place of business, other places agreed to by a debtor, offices of an attorney for the creditor, or places where the conversation between the creditor and a debtor cannot be reasonably overheard by any other person not authorized by the debtor;

(l) Stating that the creditor will take any action, including legal action, which in fact is not taken or attempted on such debtor's account, unless an additional payment or a new agreement to pay has occurred within the stated time period. For purposes of this division the time period in connection with such statement shall be presumed to expire 14 days from the date the statement is made, unless otherwise indicated by the creditor;

(2) Subject to applicable law, after notification from an attorney for a debtor that all contacts relative to the particular debt in question should be addressed to the attorney, a creditor may contact the debtor only to perfect or preserve rights against the debtor or collateral securing the debt;

(3) 940 CMR 7.04(1)(j) and (l)(1) and (2) shall not apply to telephone, gas and electric utility companies regulated by M.G.L. c. 164 and the Department of Public Utilities.

7.05: Contact With Persons Residing In The Household Of A Debtor

(1) It shall not constitute an unfair or deceptive act or practice for a creditor to assume that all contacts directed to the debtor's household are received either by the debtor or persons residing in the household of the debtor unless the creditor knows or should know information to the contrary.

(2) It shall constitute an unfair or deceptive act or practice for a creditor to imply the fact of a debt, orally or in writing, to persons who reside in the household of a debtor, other than the debtor.

(3) It shall constitute an unfair or deceptive act or practice for a creditor or debt collector to contact or threaten to contact persons who reside in the household of a debtor, other than the debtor, in any of the following ways:

(a) Using profane or obscene language;

(b) Placing telephone calls, disclosing the name of the business, or company of the creditor, unless the recipient expressly requests disclosure of the business or company name;

(c) Causing expense to any person in the form of long distance telephone calls, or other similar charges;

(d) Engaging any person in non-identifying communication via telephone with such frequency as to be unreasonable or to constitute a harassment to such person under the circumstances, and engaging any person in communications via telephone, initiated by the creditor, in excess of two calls in each seven-day period at a debtor's residence and two calls in each 30-day period other than at a debtor's residence, for each debt;

(e) Placing telephone calls at times known to be times other than the normal waking hours of the person called, or if normal waking hours are not known, at any time other than between 8:00 a.m. and 9:00 p.m.;

(f) Visits to the place of employment of any person, unless requested by such person, or confrontations regarding the collection of a debt in a public place, excluding courthouses, the creditor's place of business, places agreed to by the person, offices of the person's attorney or of the attorney for the creditor or debtor, or places where the conversation between the creditor and such person cannot reasonably be overheard by anyone not authorized by such person;

(g) Using language on printed or written materials, except materials enclosed in sealed envelopes, indicating or implying that the communication relates to the collection of a debt, which in the normal course of business may be received or examined by any such person residing in the household of a debtor.

(4) Nothing in 940 CMR 7.05 shall prohibit any contact required by law to be made by a creditor or attorney acting on his behalf engaged in collection activities, including notices required prior or subsequent to repossession.

7.06: Contact with Persons Other Than Debtors Residing In The Household Of A Debtor

(1) It shall constitute an unfair or deceptive act or practice for a creditor to contact or threaten to contact persons, other than the debtor and those residing in the household of the debtor, in any of the following ways:

(a) Implying the fact of the debt to any such person;

(b) Using language on envelopes indicating or implying that the contact relates to the collection of a debt;

(c) Using language on any other printed or written materials, except materials enclosed in sealed envelopes, indicating or implying that the contact relates to the collection of a debt, which in the normal course of business, may be received or examined by persons other than the debtor.

(2) The following contacts shall not be deemed unlawful:

(a) Any contact with any such persons which results solely from efforts to contact the debtor at the debtor's place of residence or at places other than a debtor's residence pursuant to 940 CMR 7.04(1)(f), provided the creditor limits the contact to disclosing only his personal name unless the recipient expressly requests the disclosure of the business or company name, provided, however, that any such individual using a personal name other than his own shall use only one such name at all times and provided that a mechanism is established by such creditor to identify the person using such personal name; and provided further, that with respect to contacts made at the debtor's place of employment, the debtor has not made a request pursuant to 940 CMR 7.04(1)(h) that such contact not be made.

(b) Any contact with any such person made for the purpose of and limited to determining the current location of the debtor, provided the creditor, after making reasonable attempts to locate the debtor, does not have correct information as to the debtor's current residence or location and provided further, that the creditor reasonably believes that the earlier response of such person, if any, is erroneous or incomplete and that such person now has correct or complete locational information, and in no event shall such contacts exceed three per person contacted in any 12-month period for each debt. The creditor in making said contacts may reveal only his personal name unless the recipient expressly requests the disclosure of the business or company name, provided, however, that any such individual using a personal name other than his own shall use only one such personal name at all times and provided that a mechanism is established by such creditor to identify the person using such personal name. Any contacts at the debtor's place of employment, made pursuant to 940 CMR 7.06, shall be lawful, notwithstanding a request made by the debtor, pursuant to 940 CMR 7.04(1)(h), that such contacts not be made.

(c) Any contact with respect to such debt to any attorney or other person employing or employed by the creditor, or to any attorney employed by the debtor; to a consumer reporting agency; or, where there are actual negotiations or arrangements for assigning or purchasing or settling of accounts, to potential assignees or purchasers or the like; or to persons who have any interest in property securing all or part of the debt; or to any bona fide credit counseling agency not connected to the creditor and designated in writing by the debtor;

(d) Any communication of the fact of such debt by an attorney involved in litigation in connection with such debt, or after a judgment on the debt has been entered by a court of competent jurisdiction;

(e) Any contact required by law to be made by a creditor engaged in collection activities, including notices required prior or subsequent to repossession.

7.07: General Deceptive Acts Or Practices

It shall constitute a deceptive act or practice to engage in any of the following practices:

(1) Any false representation that the creditor has information in his possession or something of value for the debtor;

(2) Any knowingly false or misleading representation in any communication as to the character, extent or amount of the debt, or as to its status in any legal proceeding, provided, however, that an incorrect or estimated bill submitted by a gas or electric utility company regulated by M.G.L. c. 164, and the Department of Public Utilities shall not be prohibited by 940 CMR 7.07;

(3) Any false or misleading representation that a creditor is vouched for, bonded by, affiliated with, or is an instrumentality, agency, or official of the state, federal or local government;

(4) Any false or misleading representation that a creditor is an attorney or any other officer of the court;

(5) The use, distribution or sale of any written communication which simulates, or which is falsely represented to be, or which otherwise would reasonably create a false impression that it was, a document authorized, issued or approved by a court, a government official or other governmental authority;

(6) Any representation that an existing obligation of a debtor may be increased by the addition of attorney's fees, investigation fees, service fees, or any other fees or charges, if in fact such fees or charges may not legally be added to the existing obligation;

(7) Any solicitation or obtaining of any written statement or acknowledgement in any form containing an affirmation of any obligation by a debtor who has been adjudicated bankrupt, without clearly and conspicuously disclosing the nature and consequences of such affirmation.

7.08: Inspection

It shall constitute an unfair or deceptive act or practice for a creditor to fail to allow a debtor or an attorney for a debtor to inspect and copy the following materials regarding a debt during normal business hours of the creditor and upon notice given to such creditor not less than five business days preceding the scheduled inspection:

(1) All papers or copies of papers in the possession of the creditor which bear the signature of the debtor and which concern the debt being collected;

(2) A ledger, account card, or similar record in the possession of a creditor which reflects the date and amount of payments, credits, and charges concerning the debt.

7.09: Post Dated Checks

It shall be an unfair or deceptive act or practice for a creditor to request or demand from a debtor a post dated check, draft, order for withdrawal or other similar instrument in payment for the debt or any portion thereof, or for a creditor to negotiate such instrument before the due date of the instrument.

7.10: Relation To Other Laws

940 CMR 7.00 does not exempt any person from complying with existing laws or canons of ethics with respect to debt collection practices. To the extent that any provision of 940 CMR 7.00 is specifically inconsistent with the Canons of Ethics and Disciplinary Rules Regulating the Practice of Law, as currently appearing in Supreme Judicial Court Rule 3:22 and then only to the extent of the inconsistency, 940 CMR 7.00 is not applicable.

7.11: Preemption By Federal Law

In the event any conflict exists between the provisions of 940 CMR 7.00 and the provisions of Federal statutes or regulations relating to the collection of debts, such Federal law shall control but only to the extent that such Federal law mandates actions or procedures prohibited by 940 CMR 7.00.

REGULATORY AUTHORITY

940 CMR 7.00: M.G.L. c. 93A, § 2(c).