These emergency provisions are to remain in effect for the ninety (90) days following the effective date of this regulation or until the State of Emergency Period expires, whichever occurs first.
*As an update, this amendment has been submitted to the state’s Secretary of State for adoption. While not enacted yet, Massachusetts, home of Senator Elizabeth Warren, has collections and repossession laws that in many cases exceed those of even California and there is no reason to believe that this will not be enacted.
27 March 2020 – The state of Massachusetts Attorney General has enacted a large number of emergency debt collection provisions regulating what collections actions, basically eliminating all third party collections efforts, stating, “Under the present circumstances, certain practices by creditors and debt collectors are unfair and deceptive and violate the Massachusetts Consumer Protection Act.” There are however, some strikingly odd exceptions to what types of debts are can be called.
Under the new rules, there is a broad prohibition on outbound collection call efforts. The rule states that it applies “only to debt collectors.” See below for definitions.
Debt Collector Definition
“Debt collector” means any person or business whose principal purpose is the collection of a debt, or who regularly collects or attempts to collect, directly or indirectly, a debt owed or due or asserted to be owed or due another. The term debt collector shall also include any person who buys or acquires debt that is in default at the time of purchase or acquisition and who seeks to collect such debt. The term debt collector shall include a creditor who, in the process of collecting his own debt, uses any name other than his own which would indicate that a third person is collecting or attempting to collect the debt. The term debt collector shall also include a person in a business the principal purpose of which is the enforcement of security interests.
Debt collector shall not include:
(a) an officer or employee of a creditor that is not itself a debt collector, while, in the name of such creditor, collecting debts for such creditor;
(b) a person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for a person to whom it is so related or affiliated and if the principal business of the person is not the collection of a debt;
(c) an officer or employee of the United States or a state of the United States to the extent that collecting or attempting to collect a debt is in the performance of his official duty;
(d) a person while serving or attempting to serve legal process on another person in connection with the judicial enforcement of a debt;
(e) a nonprofit organization which, at the request of a consumer, performs bona fide consumer credit counseling and assists the consumer in the liquidation of debts by receiving payments from the consumer and distributing the amounts to creditors; and
(f) a person collecting or attempting to collect a debt owed or due or asserted to be owed or due another to the extent the activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by the person; (iii) concerns a debt which was not in default at the time it was obtained by the person; or (iv) concerns a debt obtained by the person as a secured party in a commercial credit transaction.
According to the rule:
“[I]t shall be an unfair or deceptive act or practice for any debt collector to initiate a communication with any debtor via telephone, either in person or by recorded audio message to the debtor’s residence, cellular telephone, or other telephone number provided by the debtor as his or her personal telephone number, provided that a debt collector shall not be deemed to have initiated a communication with a debtor if the communication by the debt collector is in response to a request made by the debtor for said communication.”
The rule does not, however, prohibit the answering of inbound calls.
Prohibitions on Legal Enforcement of Debt
Under these new rules, it is deemed as an unfair or deceptive act or practice for any creditor or debt collector to seek legal remedies for debt, such as initiating, filing, or threatening to file any new collection lawsuit or seek an equitable remedy (such as garnishment, seizures, or repossessions).
Exceptions to the Rule
Peppered throughout the regulation are exception to these rules that allow for collections calls on real estate secured loans and utilities as well as communications for the coordination of court appearances.
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