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shutterstock_588037994According to a recent study by NerdWallet, the average U.S. household carries approximately $16,000 in credit card debt. For many consumers, that amount of debt becomes difficult to manage and they often fall behind on payments, resulting in calls and letters from debt collectors.

When you have mountains of debt piling up, it’s easier to throw your hands up in the air and turn a blind eye to debt collectors reaching out to you. However, during America Saves Week it’s important that consumers realize large amounts of debt can prevent them from saving and accumulating wealth over time. That’s why we are providing guidelines for consumer protections against debt collectors, because it’s time to tackle and deal with the problem for a healthy financial future.

The Division of Banks licenses debt collectors, whether they are individuals or businesses, attempting to collect a debt. There are various laws and regulations to ensure consumers are treated fairly throughout the process.

Who can collect a debt from you in Massachusetts?

  • Creditor – the person or company to whom the money is owed. Banks and credit unions that have lent money can be categorized as creditors. While creditors do not need a license, they must follow theMassachusetts Attorney General’s Debt Collection Regulations and the Fair Debt Collections Protections Act (FDCPA).
  • Debt collector – the third party agent collecting money for a creditor. They do not “own” the debt being collected and require a license through the Division of Banks.
  • Debt buyer/passive debt buyer -purchasers of already delinquent debt from creditors and may attempt collections. Passive debt buyers also purchase already delinquent debt, but use a debt collector or attorney to collect; they do not have direct contact with the consumer. Debt buyers and passive debt buyers “own” the debt being collected. Debt buyers do not need to be licensed, but remain 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 debt buyer attempting to collect a debt without the use of a debt collector or attorney requires a license from the Division.
  • Attorneys – often collect on behalf of creditors in lieu of a debt collector.  Attorneys do not “own” the debt being collected. An attorney licensed to practice law in the Commonwealth is not required to be licensed by the Division to collect debt on behalf of a client. While attorneys collecting debt are not subject to the Commonwealth’s Debt Collection Law, they 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 Attorney General’s Debt Collection regulations.

What should consumers know about debt collectors? Massachusetts Debt Collection regulations prohibit debt collectors from:

  • Placing telephone calls any time other than between 8:00 A.M. and 9:00 P.M.;
  • Placing any telephone calls to the debtor’s place of employment if the debtor has made a written or oral request that such telephone calls not be made at the place of employment;
  • Visiting the household of a debtor at times other than between 8:00 A.M. and 9:00 P.M., excluding visits where no person is contacted in the household, unless a debtor consents in writing to more frequent visits. The creditor must remain outside the household unless expressly invited inside by such debtor;
  • Visiting the place of employment of a debtor, unless requested by the debtor;
  • Using profane or obscene language;
  • Threatening that nonpayment of a debt will result in arrest or imprisonment, seizure or sale of any property, seizure of wages, or the taking of other action requiring judicial order without informing the debtor.

If you have additional questions, contact the Office of Consumer Affairs and Business Regulation by calling our Consumer Hotline at (617) 973-8787, or toll-free in MA at (888) 283-3757, Monday through Friday, from 9 am-4:30 pm. Follow the Office on Facebook and Twitter, @Mass_Consumer. The Baker-Polito Administration’s Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for all Massachusetts businesses. The Office also oversees the state’s Lemon Laws, data breach reporting, Home Improvement Contractor Program and the state’s Do Not Call Registry.

 

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