Massachusetts Attorney General Implements Emergency Debt Collection Regulations in Response to COVID-19 Crisis

From March 27 through June 25, 2020—or until the end of Massachusetts' state of emergency—Attorney General Maura Healey has implemented temporary regulations on the collection of debt from Massachusetts consumers, which supplements existing regulations codified at 940 CMR 7.00. Important exemptions apply, including attempts to collect a debt which is owing as a result of a loan secured by a mortgage on real property.

The new regulations are enacted under 940 CMR 35.00 and include the following two sections: 940 CMR 35.03 applies to both creditors and debt collectors while 940 CMR 35.04 applies only to debt collectors.

940 CMR 35.03 makes it an unfair or deceptive practice for any creditor or debt collector to:

• Initiate, file, or threaten to file, any new collection lawsuit;
• Initiate, threaten to initiate, or act upon any legal or equitable remedy for the garnishment, seizure, attachment or withholding of wages, earnings, property or funds for the payment of a debt to a creditor;
• Initiate, threaten to initiate, or act upon any legal or equitable remedy for the repossession of any vehicle;
• Apply for, cause to be served, enforce, or threaten to apply for, cause to be served or enforce any capias warrant;
• Visit or threaten to visit the household of a debtor at any time;
• Visit or threaten to visit the place of employment of a debtor at any time; and
• Confront or communicate in person with a debtor regarding the collection of a debt in any public place at any time.

940 CMR 35.04 makes it an unfair or deceptive practice for any debt collector to:

• Initiate a communication 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 requested by the debtor for said communication.

This regulation includes important exemptions. As noted above, attempts to collect a debt which is owing as a result of a loan secured by a mortgage on real property are exempted. Moreover, this regulation does not apply to attempts to collect those debts owed by a tenant to an owner, as those terms are defined by 940 CMR 3.01.

The AG's sweeping action could have a significant impact on the debt collection industry, especially if the Massachusetts state of emergency continues beyond June 25, as debt collectors and creditors could see drastically reduced recoveries from Massachusetts debtors. Hinshaw will continue to monitor state attorney generals' response to the COVID-19 crisis.