By Ms. Spiliotis of Peabody, petition (accompanied by bill, House, No. 1104) of Joyce A. Spiliotis and others relative to the purchasing of debts by collection agencies.  Financial Services.

The Commonwealth of Massachusetts

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PETITION OF:

Joyce A. Spiliotis

Anthony J. Verga

Mary E. Grant

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In the Year Two Thousand and Seven.

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An Act Relative to Regulating Collection Agencies.

    Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. SECTION 1.  Section 24 of Chapter 93 of the General Laws is hereby amended by inserting after the word “debt collector” the following definition:

“Debt-purchaser,” a person that purchases a debt.

SECTION 2.  Chapter 93 of the General Laws is hereby amended by inserting after

Section 24K, the following section:

SECTION  24L.

(a)  Within 30 days of purchasing a debt, a debt-purchaser shall send to the debtor a

written notice of the purchase.  The notice shall state:

                (1) the dollar amount of the debt;

(2) the original creditor;

(3) the date on which the debt-purchaser bought the debt, and

(4) the interest rate and penalty charges that the debt-purchaser may charge on the debt.

(b) A debt-purchaser shall send a debtor a monthly notice of the activity on the debtor’s 

account. This notice shall state:

                (1) the unpaid balance on the account;

                (2) the amount of any payments on the account from 30 days prior to the date the notice is sent; and

                (3) the amount of interest and penalties charged on the account from 30 days prior to the date the notice is sent.

(c) Failure to comply with the notice requirements established in paragraph (a) or (b) of

this Section shall constitute an unfair business practice under Chapter 93A. 

(d) A debt-purchaser shall attach to any communication sent to a debtor a disclaimer of

the limitations imposed upon the debt-purchaser by paragraphs (a) and (b) of this Section.

The disclaimer shall state that a debtor may bring a private action if a debt-purchaser

violates paragraphs (a) or (b) of this Section. A debt-purchaser shall print the disclosure

in large, bold font, and all capital letters.  The debt-purchaser shall print the disclosure on

the top half of the first page of the communication, on the front side of the page.

(e) The Commissioner of Banks shall publish in a conspicuous location on the Division

of Banks’ website the limitations on debt-purchasers established in paragraphs (a) and (b)

of this Section.

(f) The Commissioner of Banks shall promulgate any regulations necessary to implement

and enforce this Section. The Commissioner of Banks shall promulgate regulations

within one year from the date on which this bill takes effect. Every 3 years, the

Commissioner of Banks shall review for 6 months the effect of the regulations

promulgated pursuant to this Section. Upon completing the review, the Commissioner of

Banks shall amend the regulations or promulgate new regulations as is necessary to

enforce this Section.

SECTION 3.  Chapter 167E of the General Laws is hereby amended by

inserting after Section 1A the following section:

SECTION 1B:

(a) Within thirty days of selling a debt, a bank shall send a debtor a written notice that the

debt was sold.  The notice shall inform the debtor of:

(1) the amount of the debt,

(2) the person to whom the debt was sold;

(3) the interest and penalties that the person who bought the debt may charge on the debt.