Rules of Civil Procedure Civil Procedure Rule 8.1: Special requirements for certain consumer debts
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As used in this rule, the following definitions shall apply:
(1) “Action” means a proceeding where the plaintiff seeks to collect a debt incurred pursuant to a revolving credit agreement.
(2) “Charge-off” means the treatment of a receivable balance as a loss or expense because payment is unlikely.
(3) “Debt” means any obligation or alleged obligation to pay money arising out of a transaction in which the money, personal property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes. Debt shall not include obligations to pay money arising out of a loan secured by real property.
(4) “Original creditor” means the person or entity first owed the debt.
(5) “Revolving credit agreement” means an agreement pursuant to which the consumer may purchase, at retail, goods or services or merchandise certificates on credit from time to time and under the terms of which a finance charge is to be computed in relation to the consumer’s balance from time to time.
(b) Special requirements
In any action as defined in subdivision (a)(1) of this rule involving a debt as defined in (a)(3), the plaintiff shall file simultaneously with the complaint the affidavits, documentation, and certification provided for in subdivisions (c)-(f) of this rule. The affidavits, documentation, and certification shall be served on the defendant with the complaint.
(c) Affidavit regarding debt
An affidavit disclosing the following information with particularity:
(1) The name, position, and employer of the affiant;
(2) The name of the current owner of the debt;
(3) The name of the original creditor, including the name under which the original creditor did business with the defendant, if different;
(4) For debt arising from a credit card sponsored or co-sponsored by a retailer, the name of the sponsoring or co-sponsoring retailer;
(5) The last four digits of the account number(s) assigned by the original creditor;
(6) The amount and date of the defendant’s last payment, if any, or a representation by the affiant that no payment has been made;
(7) The date of charge-off;
(8) The amount of the debt on the date of charge-off;
(9) For the portion of the debt incurred after the date of charge-off, an itemization of the debt (broken down by principal, interest, fees, or other charges) and the method of calculating such principal, interest, fees, or other charges;
(10) A chronological listing of the names of all prior owners of the debt and the date of each transfer of ownership of the debt, beginning with the original creditor; and
(11) An attestation that the affiant personally reviewed records sufficient to establish the information requested in this subdivision (c).
(d) Affidavit providing documentation of debt
An affidavit with legible copies of the following documents:
(1) Documents establishing the existence, amount, and terms and conditions applicable to the debt, including:
(A) A document provided to the defendant before the date of charge-off demonstrating the defendant incurred the debt and the amount owed;
(B) Documents establishing the terms and conditions applicable to the debt;
(C) The written document, if any, signed by the defendant evidencing the defendant’s agreement to the terms and conditions described in the documents in (d)(1)(B) or, if a signed copy of such document is not within the possession, custody, or control of the plaintiff, documents evidencing the defendant’s acceptance of such terms and conditions (which may include the most recent monthly statement reflecting a purchase, payment, or balance transfer authorized by the defendant before the date of charge-off); and
(2) Each bill of sale, assignment, or other document evidencing the transfer of ownership of the debt, beginning with the original creditor. Such documentation must include a specific reference to the defendant or the defendant’s account number.
(e) Affidavit regarding address verification
An affidavit stating that the defendant’s residential address has been verified within three months prior to the commencement of the action by at least one of the following methods:
(1) Receipt of correspondence from the defendant with that return address or other verification from the defendant within the three-month period that such address is current;
(2) Certified mail receipt signed by the defendant with that address within the three-month period; or
(3) Sending a letter by first-class mail to that address for the defendant that has not been returned to sender by the postal service, and verifying the same address as current using a paid subscriber-based commercial online database and, if available, either a municipal record, such as a street list or tax records, or a state motor vehicle registry.
The affidavit shall describe the verification method(s) used and the date(s) of the verification. If any database or municipal or state record(s) used shows more than one address for the defendant during the last 12 months, the plaintiff shall state the basis for selecting the address(es) to be used for service. Documents reflecting such verification shall be attached.
(f) Statute of limitations certification
A certification from the plaintiff or counsel for the plaintiff stating:
(1) Whether the terms and conditions applicable to the debt included a choice of law or limitations provision, and, if so, what such provision(s) stated;
(2) The statute or other law establishing the limitations period, if any; and
(3) That, based on reasonable inquiry, the applicable limitations period has not expired.
Rule 8.1 and Rule 55.1, effective in 2019, apply to collection actions against consumers involving debts arising out of revolving credit agreements. Rule 8.1 requires the plaintiff to (1) file with the complaint documentation regarding the debt, (2) verify the defendant’s address prior to commencement of the action, and (3) certify that the statute of limitations has not expired. Rule 55.1 (1) prohibits entry of default against a defendant where the documentation required by Rule 8.1 has not been provided; (2) requires a determination that the plaintiff is entitled to judgment in the amount claimed prior to entry of a default judgment; and (3) requires reverification of the defendant’s address under specified circumstances prior to entry of a default judgment.
Collection actions involving credit cards make up a significant portion of the civil actions commenced in the Massachusetts courts, with many of them filed in the District Court and Boston Municipal Court. Many of these cases proceed to judgment by default, sometimes raising questions whether the plaintiff has used a current address for service of process.
Requiring additional documentation with the complaint is a recognition that consumers in the past often lacked critical information needed when sued for credit card debts. When an assignee of the debt is named as plaintiff in the action and a complaint is served on the defendant, the defendant may have difficulty in ascertaining the identity of the original creditor. The documentation will help consumers to identify the original creditor in instances where an assignee is seeking to collect an assigned debt and the documentation will help to confirm the amount owed. The requirement of address verification mandates extra steps to help to ensure that an address used by a plaintiff to serve a defendant is as accurate as can reasonably be expected.
The addition of special requirements in litigation involving certain types of debts is not a new phenomenon in Massachusetts. Additional documentation and address verification requirements for certain types of debts have been applicable in small claims cases since 2009 (Rules 2(b), Uniform Small Claims Rules) and in civil actions on the regular civil docket in the District Court and Boston Municipal Court since 2015 (Boston Municipal Court and District Court Joint Standing Order No. 2-15).
Rule 8.1(a). The rule applies to a “debt incurred pursuant to a revolving credit agreement” (Rule 8.1(a)(1)). This would encompass, but is not limited to, a collection action arising out of credit card debt. The definition of debt is limited to consumer debt but excludes a revolving credit agreement involving real estate (Rule 8.1(a)(3)). Thus, Rule 8.1 is not applicable to a suit on a debt arising out of a home equity line of credit where the collateral is real estate.
Rule 8.1(b). The required items must be served on the defendant with the complaint. Accordingly, copies of all such items should be sent to the process server to be served together with the summons and complaint.
Rule 8.1(c). In connection with preparing an affidavit regarding debt, care should be taken not to include personal identifying data. Rule 5(h). Credit card numbers and other personal identifying information must be redacted consistent with Supreme Judicial Court Rule 1:24, Protection of Personal Identifying Information in Publicly Accessible Court Documents. See SJC Rule 1:24, §§ 3 and 4.
Rule 8.1(d). These documents are intended to provide a defendant with details about the nature of the claim, the amount allegedly owed, and the identity of the original creditor.
Rule 8.1(e). The address verification requirements provide various methods for the plaintiff to determine and confirm the defendant’s address. The verification must have occurred within three months prior to plaintiff having commenced the action.
Rule 8.1(f). The plaintiff must certify, based on a reasonable inquiry, that the statute of limitations has not expired on the claim and must provide the statutory or caselaw basis for the period of limitations applicable to the debt. Even though the statute of limitations is a listed affirmative defense under Rule 8(c), this requirement places the burden on the plaintiff to determine, and certify, that the action is not stale. A regulation of the Massachusetts Attorney General provides that it is an unfair or deceptive act or practice for a debt collector to attempt to collect a consumer debt that “the creditor knows, or has reason to know based on a good faith determination, is a time-barred debt” unless the creditor makes certain disclosures, including that the debt may be unenforceable because it is time-barred. 940 CMR § 7.07(24).