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Debt collection information for consumers

The Division of Banks (DOB) licenses debt collectors and other individuals or companies attempting to collect a debt. In Massachusetts several laws and regulations are in place to ensure consumers are treated fairly throughout the debt collection process.
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Types of debt collectors

There are many types of debt collectors:

  • Debt collector - any person whose business it is to collect or attempt to collect debt owed or due to another person and/or company. Debt collectors need a license through the Division of Banks (DOB). All debt collectors are subject to state and federal debt collection laws and regulations.
  • Debt buyer – purchases debt already in default. The debt buyer then attempts to collect on the purchased debt. Debt buyers need a license through the DOB. All debt buyers are subject to state and federal debt collection laws and regulations.
  • Passive debt buyer - purchases delinquent debts for investment purposes only. Passive debt buyers do not directly collect on the debt. Passive debt buyers hire a licensed debt collector or attorney to collect the purchased debts. Passive debt buyers do not need to be licensed, but are subject to the restrictions of the  Fair Debt Collection Practices Act (FDCPA),as well as the debt collection regulations of the Office of the Attorney General.  However, a passive debt buyer attempting to collect a debt without the use of a licensed debt collector or attorney require a license issued by the DOB.
  • Attorney collecting debt – an attorney licensed to practice law in Massachusetts does not need a license through the DOB to collect debt on behalf of a client. Attorneys collecting debt are subject to the Supreme Judicial Court’s Rules of Professional Conduct, the disciplinary oversight of the Board of Bar Overseers, restrictions of the Fair Debt Collection Practices Act (FDCPA), and the debt collection regulations of the Attorney General’s office.

If contacted about a debt

If a debt collector contacts you, do not give out any personal information (account numbers, social security number, etc.) until you first:

  • Request verification of a disputed debt in writing.
  • Check the licensing status with the DOB of a debt collector or the Bar status of an attorney.

Once you have confirmed the debt and verified the debt collector you should:

  • Create a paper trail. Keep a record of the date, time and name of the individual contacting you. Put your requests and responses in writing.
  • If you do in fact owe the debt, plan to repay any undisputed obligation(s). Set up a payment plan you can maintain and provide that to the creditor or debt collector in writing.

Your rights

A debt collector must abide by laws and regulations when contacting you. Below are things a debt collector must do, can do, and cannot do when attempting to collect a debt.

You may contact the DOB or submit a complaint if you have questions or concerns about your contact with a debt collector.

A debt collector MUST:

  • Tell you the amount of the debt and the name of the creditor collecting the debt. This must be done at the first communication or within five days of the contact.
  • During the first communication disclose they are attempting to collect a debt and any information will be used for that purpose.
  • Disclose the name of the creditor or debt collection company and the name of the person making contact.
  • Within 30 days of your request tell you the name and address of the original creditor.
  • Communicate directly with your attorney if you provide his/her information to the debt collector.
  • Notify you in writing within 30 days of the initial contact of your right to not have collection telephone calls made to your place of work.

A creditor or debt collector CAN:

  • Assume a debt is valid if it is not disputed within 30 days of contact.
  • Contact any person, including family and friends, to get your address or contact information.
  • Call you at home and come to your house during normal working hours (8:00 A.M. to 9:00 P.M). These visits may only occur twice in any seven day period.
  • Collect expenses more than the amount owed.

A debt collector CANNOT:

  • Discuss your debt with third parties - such as friends or neighbors without your direct consent or judicial authority.
  • Represent or imply they are affiliated with the federal government or any state. This includes distributing any document falsely representing that it is authorized by any court or government agency.
  • Use or threat to use violence or criminal means to cause physical harm, or harm to your reputation or property.
  • Seize certain funds and property to meet an outstanding debt.

There are extra protections in place if you are over 60 years old or handicapped. These protections ensure that financially distressed Massachusetts residents are able to maintain the basic necessities of life.

Debt collection license requirements

  • Creditors do not need to be licensed by the Division as a debt collector.  However, the creditor must follow the Massachusetts General Laws and the FDCPA.
  • Debt buyers attempting to collect a debt without the use of a debt collector or attorney require licensure from the DOB.
  • Debt collectors require a license through the DOB.
  • Attorneys licensed to practice law in Massachusetts and attempting to collect a debt do not require a license from the DOB and are not subject to the Commonwealth's debt collection law.  However, attorneys are subject to the Supreme Judicial Court's Rules of Professional Conduct, the disciplinary oversight of the Board of Bar Overseers, restrictions of the FDCPA, and the Debt Collection Regulations of the Office of the Attorney General.

Verify a debt collector's license through the Nationwide Multistate Licensing System (NMLS).

Use the DOB's portal to download a list of approved licensees.

Tips for dealing with debt collection

  • Do not give out any personal information (account numbers, social security numbers, etc.) if contacted by someone attempting to collect a debt.
  • Request verification of the disputed debt in writing.
  • Create a paper trail by keeping a record of the date, time, and name of the individual attempting to collect the debt and respond to requests in writing.
  • If the debt is valid and owed, plan to repay any undisputed obligations, determine a feasible payment plan, and provide the plan to the creditor or debt collector in writing.

File a complaint about debt collection in Massachusetts

Relevant statutes and regulations

Related

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