MA Attorney General’s Coronavirus Debt Collection Protections Invalid, Says Collectors’ Association
One of the biggest concerns we’ve heard from clients about over the last six weeks is debt and the available debt collection protections. With economic uncertainty or job loss, no one wants to start getting calls from debt collectors. This post explains the status of the Attorney General’s emergency debt collection protections during the coronavirus shutdowns.
The Massachusetts Attorney General enacted emergency debt collection regulations on March 27, 2020 codified at 940 C.M.R. 35.00. Under those regulations, most debt collection, including lawsuits, telephone calls, and dunning letters, is prohibited. Violation of the regulations is an automatic violation of the Consumer Protection Act, G.L. c. 93A.
Unfortunately, the legality of the new debt-collection regulations is being challenged. Claiming that the regulations are unconstitutionally overbroad and thus unenforceable, the trade association for the collection industry, ACA International, has filed a lawsuit in federal court seeking to invalidate the protections. A decision is expected soon and if the regulations are invalidated them some or all debt collection may continue.
Also, even if the regulations are deemed valid, they only last for 90 days and will expire by the end of June 2020. One problematic issue our office has noticed with the regulations is that there is no provision for what happens to any debts that remain unpaid after the expiration date. Debt collectors will likely have a backlog of collection suits and will be eager to recoup their losses. Most debt collections in Massachusetts are unable to do business and can only talk to consumers if the consumers or their representatives affirmatively reach out to discuss.
All the usual protections against unfair or deceptive debt collection remain in place, however, regardless of the validity of the emergency regulations. The main laws our office uses to protect consumers are the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq., the Attorney General’s Debt Collection Regulations, 940 C.M.R. 7.00, the Division of Banks Debt Collection Regulations, 209 C.M.R. 18.00 and the Massachusetts Debt Collection Act, G.L. c. 93, § 49.
Though consumers have been given a temporary reprieve, it makes sense to consider what to do after the regulations expire and when debt collection picks back up. There are sure to be many lawsuits, and possibly many violations. You should stay well informed about your rights and document any communications with debt collectors.
Culik Law represents consumers throughout Massachusetts in all matters related to debt collection, credit, collection lawsuits, and settlements. If you have suffered abuse from a debt collector, have accounts in collections, or have questions about your rights, contact us to see if we can help.