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Massachusetts Superior Court Rules Unlicensed Debt Collector May Have Violated Consumer Protection A


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Under Massachusetts law, debt collectors must obtain a license from the Division of Banks in order to engage in debt collection. Failure to do so may subject the debt collector to criminal and civil penalties.

The Massachusetts Division of Banks, however, has said that so-called “passive debt buyers,” debt collectors who only collect debts through licensed attorneys, may not need to obtain licenses. This exemption, issued in an opinion letter from the DOB, appears to contradict the text of the statute.

The lawsuit against LVNV Funding alleges that it is not a “passive debt buyer” because it engages in a variety of other collection activity. The lawsuit also alleged that the DOB opinion letter is not binding.

The judge denied LVNV Funding’s motion to dismiss the case, holding that the allegation that the debt collection law was violated could constitute a violation of the Massachusetts Consumer Protection Act, called Chapter 93A.

Although there is no Massachusetts appellate decision on this issue, this is the latest in a number of decisions holding that debt collectors must obtain licenses to operate in the Commonwealth.

The decision is here: Dorrian v. LVNV

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Culik Law is a Massachusetts Law Firm. The posts on Culik Law’s blog are not intended as legal advice. If you have questions about your particular situation, CONTACT CULIK LAW for a Free Consultation.

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