On March 27, 2020, the Massachusetts Attorney General filed an emergency regulation interpreting the Massachusetts Consumer Protection Act, M.G.L. Chapter 93A, to address certain practices by creditors and debt collectors that it has determined to be unfair and deceptive under present circumstances. The regulation, entitled “Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19” (940 CMR 35:00), applies to “creditors” (as defined in 940 CMR 7.03) and “debt collectors” (as defined in the emergency regulation).
The emergency regulation makes it an unfair or deceptive act or practice for creditors and debt collectors, for the 90-day period following the effective date of the regulation or until the State of Emergency expires, 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 or wages, earnings, property, or funds for the payment of debt to a creditor;
- initiate, threaten to initiate, or act upon any legal 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; or
- confront or communicate in person with a debtor regarding the collection of a debt in any public place at any time.
Further, the emergency regulation prohibits “debt collectors,” for the 90-day period following the regulation’s effective date or until the State of Emergency expires, whichever occurs first, to initiate a communication with any debtor via telephone, either in person or by recorded audio message to the debtor’s residence, cellular phone, or other telephone number provided as a personal number, provided that the debt collector is not deemed to have initiated a communication if the communication is in response to a request by the debtor for said communication. The foregoing prohibition does not apply to communications initiated solely for the purpose of informing debtors of rescheduled court appearance dates or discussing convenient dates for same.
Because the definitions of “creditor” and “debt collector” in the emergency regulation are far from models of clarity, a number of industry members, to be conservative, are reading the prohibition on calls by “debt collectors” to also apply to creditors. This reading is also influenced by Massachusetts’s status as one of the most aggressive consumer protection states in the country and the scope of its collection law, which is the most far-reaching state collection law applicable to creditors of any state (e.g., it requires even creditors to send debt validation notices and provide the mini-Miranda disclosure in all collection communications).
As a result, the Massachusetts Attorney General’s Office was flooded with comments and questions from the industry last week and we now understand that it plans to issue a series of FAQs to attempt to clear up the scope and intent of the emergency regulation. Further, the plain language of the call restrictions section should be clarified to make clear that it means what it says – the call restrictions apply only to debt collectors and not creditors. Indeed, the National Consumer Law Center has interpreted the restrictions this way. Hopefully, we will have more clarity early next week for everyone. We will keep you apprised of any further developments.