By the Division of Banks

Permissibility Of Collection Agency To Act On Behalf Of Secured Creditor

Mass. Gen. Laws chapter 93, section 24, and its implementing regulation 209 CMR 18.00 et seq., governs the licensing of collection agencies in the Commonwealth. Motor vehicle installment sales are governed by Mass. Gen. Laws chapter 255B. Section 20A of chapter 255B governs default under such a sales agreement and requires that a "secured creditor" may not bring an action until the "secured creditor" gives the notice required by that same section. If the licensed collection agency is not the "secured creditor" in the transaction, then the collection agency may not send the required letter, even if the actual "secured creditor" is the client of the collection agency.