- Office of Attorney General Maura Healey
Media Contact for National Company Pays $1.4 Million, Strengthens Policies over Abusive Debt Collection Practices
Boston — A national mortgage servicer has paid $1.4 million and agreed to strengthen its policies over its alleged abusive debt collection practices that affected more than 5,000 borrower accounts in Massachusetts, Attorney General Maura Healey announced today.
Pursuant to the assurance of discontinuance filed in Suffolk Superior Court, Ditech Financial, LLC, previously GreenTree Servicing, LLC, agreed to change its practices to comply with state debt collection and consumer protection laws.
The assurance of discontinuance requires that Ditech stop making excessive debt collection calls to consumers and provide written notice regarding the borrowers’ right to receive detailed information about any debts that Ditech sought to collect, as required by law.
“Our state laws protect borrowers from being harassed and threatened by debt collectors,” said AG Healey. “This settlement is a message to all debt collectors that our office will continue to aggressively pursue those who engage in abusive collection practices in Massachusetts.”
Ditech is a servicer of residential mortgage loans across the country including thousands of loans in Massachusetts.
The AG’s Office investigated Ditech’s debt collection practices in Massachusetts and alleges that, since 2012, Ditech routinely violated the AG’s regulations governing debt collection.
Ditech employees allegedly called borrowers far in excess of the number of calls permitted by state law, sometimes calling the same borrower up to 12 times in a single day.
The AG’s Office also found that Ditech failed to notify borrowers of their right to seek detailed information regarding their mortgage debt. Under state law, mortgage borrowers have the right to verify the amounts owed on a debt in collection and to confirm that the party seeking to collect on the debt has the legal right to do so.
Particularly where mortgage loans are frequently transferred from servicer to servicer and sold from party to party, state law protects the rights of consumers to access information relating to their debt. Ditech’s alleged failure to issue required debt validation notices deprived consumers of their rights and their opportunity to seek information regarding their own mortgage loans.
According the terms of the settlement, Ditech will change its procedures to prohibit calls in excess of the number permitted by the debt collection regulations and will implement technological controls to restrict outgoing collection calls when the call limit is reached. Ditech will also ensure that all borrower accounts receive timely and compliant debt validation notices going forward.
The payment of $1.4 million from Ditech will be used to address the negative effects of foreclosure, debt collection or other consumer protection issues in Massachusetts.
Consumers with questions or concerns about deceptive or abusive debt collection practices can call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.
The AG’s Office is dedicated to going after abusive debt collection practices. In December 2015, AG Healey sued one of the largest debt collection law firms in Massachusetts and its two owners, alleging that the firm repeatedly sued consumers for debts they did not owe or debts that were inaccurate.
Yesterday, AG Healey announced that two medical companies agreed to write off more than $1 million in alleged debts owed by Massachusetts consumers, cease all collection actions against them and pay restitution to consumers to resolve allegations of unlawful billing and debt collection practices.
Last week, the AG’s Office and the Massachusetts Division of Banks held a listening session seeking input on the current state of debt collection and debt collection regulation in Massachusetts. Written comments will be accepted until Oct. 21. For more information, please click here.
This matter was handled by Assistant Attorneys General Justin J. Lowe and Lisa R. Dyen of Attorney General Healey’s Consumer Protection Division, with assistance from Ciara Tran of AG Healey’s Civil Investigations Division and Assistant Attorney General Michael Lecaroz of the Consumer Advocacy and Response Division.