Licensing Requirements And Liability
Mass. Gen. Laws ch. 93 § 24 requires that a person or entity engaged in debt collection for others obtain a collection agency license from the Division of Banks. A license is required for collection of consumer debts, i.e., debts incurred for personal, family or household purposes, and for debts of a non-consumer or commercial nature. "Debt" is defined in 209 CMR 18.03 as "money or its equivalent which is, or 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." Absent other facts, it is the position of the Division that contacting a criminal defendant for the purpose of collecting a debt would require a license as a collection agency.
If an original creditor engages in collection activity for its own debts, it would not be considered a collection agency and thus would not require licensing under Mass. Gen. Laws ch. 93 § 24. Such a creditor would, however, be subject to the debt collection regulations promulgated by the Commonwealth's Attorney General and set forth in 940 CMR 7.00 et seq. Providing medical billing services of current accounts in the name of the original creditor would not require a collection agency license. However, a license would be required for a collection agency to collect, on behalf of the original creditor any account which became more than 30 days past due. The Division's regulations at 209 CMR 18.00 et seq. set out certain disclosure requirements. If an entity engages in collection activity on behalf of the original creditor, it will be subject to these and other provisions of the Division's regulations.