Licensing Requirement For Corporation That Services Consumer And Credit Card Accounts - Q2 2000By the Division of Banks
A Corporation services consumer and credit card accounts. The majority of it activities for an affiliate and it also services accounts for third parties. The Corporation provides full-service account servicing that may include marketing, customer service and remittance and processing. In the course of its servicing activities, it may handle some delinquent accounts. All customer contacts, such as periodic statements, letters and telephone calls are done in the name of the retailer and/or creditor. The Corporation's name is not used at any point in the course of servicing accounts. The Corporation does not have any offices or employees in the Commonwealth.
Mass. Gen. Laws chapter 93, section 24 states, in part, that no person or entity may engage in the Commonwealth in the business of collecting or receiving payments for others of any account, bill or other indebtedness, or engage in soliciting the right to collect or receive payment for another of any account, bill or other indebtedness, or advertise for or solicit in print the right to collect or receive payment for another account of any account, bill or other indebtedness, without first obtaining from the Commissioner of Banks a license to carry on said business. The Division's regulation at 209 CMR 18.03 defines "Debt" as " money or its equivalent which is, or is alleged to be more than 30 days past due and owing..."
It is the position of the Division that engaging in general servicing activities would not necessarily require the Corporation to obtain a collection agency license, however, such a license is required in the event any accounts being serviced by the Corporation fall within the definition of "debt", i.e. become more than 30 days past due. Since the correspondence indicated that the Corporation would be "handling some delinquent accounts" and, assuming such accounts are in fact more than 30 days past due, the Corporation would be required to obtain a collection agency license pursuant to Mass.Gen. Laws chapter 93, section 24 to conduct the activities as described relative to the delinquent account. Licensed collection agencies are required to comply with other applicable sections of said chapter 93 as well as the Division's collection agency regulation 209 CMR 18.00 et seq.