March 27, 2020: Effective immediately, pursuant to the Massachusetts’s Attorney General’s authority to issue regulations, the Attorney General’s Office (AGO) has declared it is an unfair or deceptive act or practice for any creditor, including a debt collector, to engage in debt collection activity, including phone calls during the COVID-19 state of emergency period.

The “State of Emergency Period” shall refer to the time from one business day following the effective date of these regulations, through thirty days following the lifting of the state of emergency so declared by the Governor, or his or her designee.

Specifically, the regulation prohibits creditors and debt collectors from a number of prescribed activities including but not limited to initiating, filing or threatening to file: any new collection lawsuit, garnishment action, seizure, attachment, action to withhold of wages or repossess any vehicle. The regulation also prohibits a visit or a threat to visit the household of a debtor or the debtor’s place of employment.

In addition, the regulation prohibits debt collection telephone calls for the ninety (90) days following the effective date of the regulation or until the State of Emergency Period expires, whichever occurs first.

For purposes of this regulation the reference to telephone calls includes a communication initiated by a debt collection 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.

Members are advised to consult with independent legal counsel to determine how this regulation affects their debt collection activities in the State of Massachusetts, whether they meet the definition of creditor or debt collector under state law and the steps they should take to comply with this temporary restriction. In as much as a violation of this Massachusetts’s regulation will be deemed an  unfair and abusive debt collection practice during the COVID-19 state of emergency, members should be mindful of the potential exposure under Section 15 USC 1692g of the Fair Debt Collection Practices Act and 12 U.S. Code § 5531 of the Unfair or Abusive Acts and Practices Section of Dodd Frank.

Addendum to Massachusetts Secretary of State Regulation Filing Form 940 CMR 35:00, Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19.

So what does this all mean? It appears while you cannot make outgoing calls, you may still receive incoming calls and you may still use traditional mail, as well as respond to requests for a return call. In other words, this is NOT a cessation of collections in Massachusetts, just a limitation on the manner of collecting.

This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.