Licensing Requirement For Accounts Receivable Management Company - Q2 2000By the Division of Banks
An accounts receivable management company intended to enable business owners to maximize their credit and cash flow recovery. The collection calls would be in the name of the client, not that of the company, no monies will be sent to the company and incoming calls will be received on a separate line and answered as "Billing."
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 advertise for or solicit in print the right to collect or receive payment for another of any account, bill or other indebtedness, without first obtaining from the Commissioner of Banks a license to carry on the said business.
The accounts receivable company is soliciting the right to collect payment for another and advertising in print the right to collect payment for another. Additionally, although the company is using the name of the original creditor, the accounts receivable company is the entity that is contacting the debtor via phone calls, dunning letters and /or any other type of correspondence. Although the company is not receiving payment from the debtors, the law is written in the disjunctive, and a license would be required for an entity collecting or receiving payment for another.