Know Your Rights Under Massachusetts Debt Collection Laws

Many folks are struggling to pay their bills due to the coronavirus pandemic. If this is you, you are probably familiar with overdue notices, late charges, and interest. You also may be acquainted with debt collectors. Debt collectors are professionals hired by creditors to recover unpaid debt. They come up with creative schemes to scare you to pay. Many times their actions may make you uncomfortable. Sometimes you might ask yourself, “Are they allowed to do this?” 

Debt collection isn’t without limits. Federal laws and state laws protect consumers from abusive debt collection practices. Massachusetts debt collection laws offer significant protections to Massachusetts residents from the deceptive acts of debt collectors. This article outlines the rights of Massachusetts residents who are dealing with debt collectors.

Debt Collection Regulations for Consumer Protection

Like the federal government, Massachusetts has laws that protect consumers against unfair, deceptive, and unreasonable debt-collection tactics. Many of the protections mirror the safeguards under the federal Fair Debt Collection Practices Act (FDCPA). Both regulate consumer debt collection practices. Consumer debt includes credit card debt, mortgages, car loans, and student loans. 

The FDCPA only regulates the activities of debt collectors—firms that collect debts for third parties. Massachusetts’ law covers more people. The Massachusetts Fair Debt Collection law applies to:

• Original creditors—the lender who originally makes a loan— and their attorneys;

• Third-party debt collection agencies that collect debts for other people; and 

• Debt buyers who have third-party debt collectors (including attorneys) collect the debt.

The Massachusetts attorney general has issued regulations that clarify unfair and deceptive debt collection tactics. The Code of Massachusetts Regulations (CMR) contains the debt collections regulations. A regulation violation is a breach of the Massachusetts Consumer Protection Act, General Law, Chapter 93A.

Debt collectors in Massachusetts need to be licensed by the Divisions of Banks (DOB). They also must comply with FDCPA and Massachusetts laws. Attorneys licensed to practice law in Massachusetts don’t need a license through the DOB to collect a debt on behalf of a client. The Supreme Judicial Court’s Rules of Professional Conduct regulate the conduct of attorneys. If they breach the rules of professional conduct, the Board of Bar Overseers can discipline them. Attorneys collecting debt on behalf of a client must also comply with FDCPA and Massachusetts law.

Debt buyers need to be licensed if they attempt to collect the debt they purchase. They must adhere to FDCPA and Massachusetts law. A passive debt buyer who purchases debt as an investment doesn’t need a license if the buyer doesn’t do the collecting. The debt collector hired by the debt buyer needs to be licensed. They must follow FDCPA and state law. Creditors who seek to collect a debt owed to them don’t need a license, but they must follow federal and state law. 

The regulations of the Massachusetts Division of Banks prohibit unfair debt collection practices. So, the DOB monitors debt collection agencies. They can revoke or deny licenses if they find collectors violated the regulations. 

What a Debt Collector in Massachusetts Can and Cannot Do

The CMR limits how and when debt collectors can communicate with you. They can’t call you at work if you tell them you can’t receive telephone calls there. If you tell them not to contact you at work, do so in writing. A written request will remain in place until you remove it. But an oral request lasts for only 10 days. 

By law, debt collectors also can’t reach out to you at home more than twice for each debt in a seven-day period. They also can’t call you more than twice for each unpaid debt within 30 days at a place other than your home. If you have an attorney, collectors must speak with them rather than speaking with you directly. Debt collectors are prohibited from telling third parties about your debt or announcing your debt to your neighbors and friends unless they have your written consent.  

The CMR prohibits debt collectors from talking to you without disclosing who they are. Be careful when talking to anyone who claims you owe money. Verify the person’s name and contact information. Scammers try to get you to pay them. They may be imposters and you don't owe them any money. This is also why you should never give out personal information like your Social Security number, financial account numbers, or bank account information to the person calling you.

Debt collectors can call you during normal waking hours, but they can’t call at abnormal times. The acceptable time frame is between 8:00 a.m. and 9:00 p.m. If these are not your normal waking hours, tell the collector, and let them know what your normal waking hours are. For example, if you work nights and they know you sleep between 8:00 a.m. and 4:00 p.m. they can’t call you during that time frame. They also can’t come to your home outside normal waking hours or visit you more than once in 30 days for each debt unless you permit it

The CMR also limits what debt collectors can say when they speak to you. They can’t make false, deceptive, or misleading statements when trying to collect a debt or falsely threaten criminal prosecution if you don’t pay up. Collectors can’t threaten action they can’t legally take or threaten to do something they don’t intend to do. For example, they can’t threaten to sue you if they aren't going to. And when they speak to you, they can’t use profanities or obscene language.

If the time for filing a lawsuit has passed (statute of limitations), debt collectors can’t try to collect the debt unless they tell you it’s legally unenforceable. They also must advise you that any partial payment you make will revive the statute of limitations. The time to file a lawsuit will restart. 

Finally, debt collectors can’t make you incur expenses such as long-distance calls, express mail, wire fees, or other charges. And they can’t request a post-dated check.

 Debt collectors can:

• Contact people other than you or members of your household to locate you if they don’t have your current information, but they can’t disclose your debt during the communication.

You can:

• Demand proof of the debt from the collector if you don’t recognize it 

• Ask for a copy of the judgment if they claim they have one

• Report a violation to the attorney general

• File a complaint with the Division of Boards if you believe there was a violation 

• Report a violation of the FDCPA to the Federal Trade Commission (FTC)

• Sue the collector in a U.S. District Court if they violate the FDCPA

The CMR also contains many of the requirements of the FDCPA. The debt collector must validate the debt during the initial contact or within five business days after the first contact. The collector must provide:

• The amount of the debt,

• The name of the creditor the debt is owed to,

• A statement that says unless you dispute the debt within 30 days, it will be assumed        valid, and

• A statement that you can dispute the debt within 30 days and the collector will need to verify the debt. 

Regarding Legal Action 

A creditor has the right to sue you to recover an unpaid debt. If you receive a summons and complaint, a lawsuit has started. The plaintiff (the creditor) brings the legal action. You are the defendant because you are defending the action. The complaint will detail why the creditor believes they are entitled to a judgment against you. 

The Plaintiff’s Role in a Legal Action

The burden is on the plaintiff to prove the case. The plaintiff must provide specific, detailed evidence for the collection lawsuit. They will have to show why they are entitled to payment from you. Sometimes, a debt buyer might purchase a debt, and several sales might occur. Important information may be lost with all these transactions. The plaintiff should submit a detailed affidavit showing the original creditor, the name of the current debt owner (plaintiff), and the date of the last payment. When debt changes hands, sometimes the plaintiff doesn’t have the details to prove the case.

The date of the last payment will help determine when the statute of limitations began to run. It will also confirm balances, interest accrued, and fees. With older debts, this information often is missing. If the plaintiff fails to prove certain facts, the judge will dismiss the case. Before starting the lawsuit, the plaintiff should confirm the defendant's address and send legal notices. The case can also be dismissed if these notices weren’t properly served. 

What’s Expected From a Defendant

Go to the court date. Don’t ignore it. If you don't go, the court can enter a judgment against you that says you owe the money. In rare cases, a court can issue an arrest warrant if you don't come to court. 

Answer the complaint and raise any defenses you may have to the lawsuit. If the statute of limitations has expired, state it in the answer. You can also make a motion to dismiss the action. The statute of limitations for a collections action is usually six years. Confirm this with the attorney general’s office.

If you don’t answer the complaint, you risk having a default judgment entered against you. A default judgment will allow the creditor to go after your property to satisfy the judgment. They could garnish your wages or your bank account. Wage garnishments are limited to a certain percentage. Under Massachusetts law, creditors can only garnish 15% of your wages. Your employer would be required to withhold a certain amount from your paycheck. Certain income may be exempt from wage garnishments. Exemptions typically include Social Security benefits, unemployment compensation, and workers’ compensation benefits.  

Inform the court if you don’t have the means to pay the debt. The court may recommend settlement negotiations. During the lawsuit, you can settle the debt with the creditor. You may be able to pay through a payment plan. If you enter into a payment plan, make sure you have a written copy of the arrangement. 

Lawsuits are confusing. Legal assistance will help you understand your options. 

Let’s Summarize...

Not being able to pay your bills is very stressful. When you have to deal with debt collection, this makes matters worse. Debt collectors are professionals at getting you to pay. They use different tactics to do this because they get paid when you pay. But they can’t do whatever they want to achieve their goal. You have rights that protect you under federal law and state law. Massachusets offers expansive protections for consumers from unfair and abusive debt collection activities. In addition, if you are a defendant in a collections action, you should protect your rights. Court papers and hearings are confusing. So, if you need help, you may want to contact an attorney.