Licensing Of A Collection Agency - Q4 1999By the Division of Banks
Massachusetts General Laws chapter 93, section 24, in part, prohibits a person or entity, with certain exceptions, from directly or indirectly conducting the business of a collection agency or engaging business in the Commonwealth in the business of collecting or receiving payment for others of any account, bill, or other indebtedness without first obtaining a license from the Division to carry on said business. Additionally, the Division has promulgated regulations set forth at 209 CMR 18.00 et seq . establishing standards for the collection of debt from persons within the Commonwealth and the conduct of the business of collection agencies.
Where the business of a company is to purchase, in bulk, charged off accounts from various lenders in both their home state of Michigan and nationally (including the state of Massachusetts), and then goes about the process of collecting on these charged off accounts, it is the position of the Division that these entities need not obtain a license. However, entities collecting their own debt are subject to the regulation promulgated by the Attorney General set forth at 940 CMR 7.00 et. seq .