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Massachusetts has some of the strictest debt collection regulations in the U.S., designed to protect consumers while ensuring compliance by debt collection agencies. Here's a quick summary of the key points:
Massachusetts law also diverges from federal regulations in areas like call frequency, workplace contact, and licensing of passive debt buyers. Violations can lead to legal action under the Massachusetts Consumer Protection Act.
To work with a debt collection agency in Massachusetts, verify their licensing status, ensure compliance with state laws, and use technology to streamline processes like tracking call limits and managing debt portfolios.
Massachusetts vs Federal Debt Collection Laws Comparison
Debt collection in Massachusetts is governed by MGL Chapter 93, §49 and Attorney General regulations under 940 CMR 7.00. These laws aim to prevent unfair, deceptive, and unreasonable practices by regulating original creditors, third-party agencies, and debt buyers who outsource collections.
One key restriction is on how often collectors can contact debtors. They’re limited to two calls per debt within a seven-day period for residential numbers and two calls per 30 days for non-residential locations. Even unsuccessful calls - those where no message is left - are included in this count, as clarified in the 2018 Armata v. Target decision by the Massachusetts Supreme Judicial Court.
Additionally, collectors must send a written validation notice within five business days of their first contact. This notice must outline the debt amount, the creditor’s name, and inform the debtor of their 30-day right to dispute the debt. The regulation also notes:
"A creditor shall not be deemed to have initiated a communication with a debtor if the communication by the creditor is in response to a request made by the debtor for said communication." (940 CMR 7.04[f])
These laws form the basis of Massachusetts' consumer protections, which are detailed further below.
Massachusetts law includes several safeguards to protect consumers from overly aggressive collection practices. For instance, if a debtor orally requests that workplace calls stop, collectors must comply for 10 days. A written request halts workplace calls indefinitely, unless the debtor withdraws the request. Calls are also restricted to standard waking hours, generally between 8:00 a.m. and 9:00 p.m., unless the debtor specifies otherwise.
Other protections include:
The 2018 Dorrian v. LVNV Funding, LLC case further clarified that passive debt buyers - those who purchase debt for investment and hire licensed collectors for recovery - are not classified as "debt collectors" under Massachusetts law. This means they don’t need a separate license from the Division of Banks, though they must ensure compliance by using licensed collectors. These protections highlight the state’s rigorous approach, which also diverges in several ways from federal rules.
Massachusetts debt collection laws differ from the federal Fair Debt Collection Practices Act (FDCPA) in several important ways:
Violating these state laws can result in legal action under the Massachusetts Consumer Protection Act (M.G.L. c. 93A). Consumers can sue for damages, and the Massachusetts Division of Banks can take enforcement action against unlicensed operations or unfair practices. These state-specific rules ensure a higher level of accountability for debt collectors operating within Massachusetts.
In Massachusetts, the Division of Banks (DOB) requires all third-party debt collectors and debt buyers involved in direct consumer debt collection to obtain a license. This is mandated under M.G.L. Chapter 93, Section 24. Applications must be submitted electronically through the Nationwide Multi-State Licensing System (NMLS). Before starting the application, agencies should familiarize themselves with the relevant laws, including Massachusetts General Laws Chapter 93, Sections 24–28, and regulation 209 CMR 18.00.
Key requirements include securing a $25,000 surety bond, undergoing FBI background checks, and providing credit reports for all owners and control persons. Additionally, individual collectors employed by the agency must be registered. The application process involves fees totaling $1,000 for the license, $300 for an investigation, and per-person charges of $36.25 for FBI checks and $15 for credit reports. Supporting documents must be mailed to the Division of Banks at 1000 Washington Street, 10th Floor, Boston, MA 02118. Licenses must be renewed annually by December 31 to remain valid.
Once licensed, agencies must align their practices with both state and federal regulations to ensure full compliance.
After obtaining a license, agencies are required to follow both federal and state collection standards. This includes compliance with Regulation F and the Fair Debt Collection Practices Act (FDCPA), as well as stricter Massachusetts-specific rules under 940 CMR 7.00. For example, collectors can only contact debtors during business hours, defined as 8:00 a.m. to 9:00 p.m.. Additionally, collectors must notify debtors in writing within 30 days of initial contact about their right to stop collection calls at their workplace.
The DOB's Non-Depository Institution Supervision (NDIS) Section conducts periodic reviews of licensed agencies. These reviews use the Compliance Management System (CMS) rating methodology to ensure agencies maintain effective oversight and compliance programs.
Not all entities involved in debt buying require a license from the DOB. Passive debt buyers - those who purchase delinquent debt purely for investment purposes and do not engage in direct collection - are exempt from licensing requirements. This exemption stems from the 2018 Massachusetts Supreme Judicial Court decision in Dorrian v. LVNV Funding, LLC and was later incorporated into DOB regulations in September 2025.
"This court concluded that a 'passive debt buyer,' i.e., an entity that buys debt for investment purposes and then hires licensed debt collectors or attorneys to collect the debt on its behalf, was not a 'debt collector' within the meaning of G. L. c. 93, § 24, and therefore did not need a license to operate."
To maintain their exempt status, passive debt buyers must exclusively use Massachusetts-licensed debt collectors or attorneys for all collection activities. However, they are still subject to FDCPA and state Attorney General regulations. If a passive debt buyer opts to directly collect debts without using a licensed intermediary, they must obtain a debt collector license from the DOB.
In Massachusetts, all third-party debt collectors and debt buyers must secure a license from the Division of Banks through the NMLS system. This licensing ensures agencies meet strict standards, including financial stability, maintaining separate trust accounts, and adhering to regulated communication limits.
One of the most established agencies in the state is The CCS Companies (Credit Control Services, Inc.). Headquartered in Norwood, MA, this agency has been in operation since September 1966, giving it 59 years of industry experience. Employing around 847 people, The CCS Companies specializes in business process outsourcing (BPO), commercial debt collection, and high-volume servicing across multiple industries. The agency earned accreditation from the Better Business Bureau (BBB) in June 2023, holding a "B" rating. Oversight of compliance with Massachusetts regulations is managed by Jeffrey Stoddard, the Chief Compliance Officer.
Licensed agencies in the state must follow specific guidelines, such as providing debt validation within five days of initial contact and managing funds through federally insured trust accounts.
When selecting a debt collection agency in Massachusetts, buyers and sellers of debt portfolios should weigh several critical factors. The table below highlights a comparison between The CCS Companies and general licensed agencies:
| Criteria | The CCS Companies | General Licensed Agencies |
|---|---|---|
| Years in Operation | 59 years (since 1966) | Varies |
| Workforce Size | ~847 employees | Varies |
| BBB Rating | B (Accredited since June 2023) | Not all agencies are BBB accredited |
| Specialties | BPO, commercial debt, volume-based servicing | Consumer and commercial debt collection |
| Communication Limits | Complies with state requirements | Complies with state requirements |
| Trust Account Required | Yes (federally insured bank) | Yes (federally insured bank) |
| Debt Validation Timeline | Within 5 days of initial contact | Within 5 days of initial contact |
To ensure compliance and legitimacy, buyers and sellers should confirm an agency's licensing status through the NMLS Consumer Access portal or the Massachusetts Division of Banks' approved licensee list. While The CCS Companies has faced some customer complaints, such as delays in issuing release of liability letters and wait times of up to eight days for payment receipt confirmations, its long-standing presence and large workforce suggest it can handle substantial debt portfolios effectively.
This overview of agency profiles and comparisons provides a strong foundation for understanding how to collaborate with Massachusetts debt collection agencies, which will be further explored in the next section.
When partnering with a Massachusetts debt collection agency, the first step is confirming their license status. You can use the Nationwide Multi-State Licensing System (NMLS) to check if the agency holds a valid license from the Massachusetts Division of Banks.
Massachusetts has strict rules on communication frequency, so it's crucial that your agency partner has proper tracking systems in place. For example, the state limits collectors to two calls per debt within any seven-day period, even if the calls result in voicemail messages rather than direct contact. Regularly auditing call logs can help ensure compliance with these rules and avoid violations of the Massachusetts Consumer Protection Act.
Another key requirement is financial separation. Agencies must maintain client trust accounts at federally insured banks, keeping collected funds separate from their operating capital. If your business involves subcontractors like law firms or foreclosure trustees, make sure they follow oversight policies that align with 209 CMR 18.00.
Debt validation is another critical area. Agencies are required to provide written validation within five business days of initial contact. This includes details like the amount owed and the name of the original creditor. If a consumer disputes the debt, collection activity must pause until the dispute is resolved. Keeping a clear chain of title for all debt sales is equally important for legal enforcement.
Technology can be a valuable ally here, helping you streamline compliance and make portfolio management more efficient.
Technology plays a central role in making debt portfolio trading more efficient and transparent. Platforms like Debexpert offer a marketplace where debt buyers and sellers can connect for secure transactions. Features such as portfolio analytics, multiple auction formats (English, Dutch, Sealed-bid, and Hybrid), and encrypted file sharing enhance both efficiency and security. These tools also help ensure compliance with Chapter 93 by maintaining accurate business records.
Analytics tools are particularly useful for identifying time-barred debt - accounts where the statute of limitations (six years in Massachusetts) has expired. While collectors can still seek voluntary repayment on these accounts, they must avoid threatening legal action unless they disclose how the six-year clock could restart.
Digital communication channels like email and text messaging are becoming more common in debt collection. However, these methods must comply with Massachusetts-specific guidelines to avoid harassment or disclosure violations. Real-time chat features can also simplify negotiations between buyers and sellers by promoting clear and immediate communication.
Strong oversight is essential for all debt sales, ensuring compliance every step of the way. If you're purchasing debt as a passive buyer - strictly for investment purposes - you may not need a collector's license, provided you use licensed Massachusetts collectors or attorneys for all direct collection activities. This exemption was affirmed in the case Dorrian v. LVNV Funding, LLC under G.L. c. 93, § 24.
On the other hand, if you plan to handle collections directly, you'll need to obtain a debt collector license as outlined in Massachusetts regulations.
Every debt sale should include a certified chain of title and ownership documentation. This is critical for legal enforcement and foreclosure actions. Additionally, thorough due diligence is necessary to confirm the debtor's identity and the exact amount owed before completing any portfolio purchase.
It's also important to track the statute of limitations carefully. In Massachusetts, lawsuits on consumer-related debts must be filed within six years, though this extends to 20 years if a judgment is obtained. Attempting to collect on time-barred debt without proper disclosure is considered an unfair practice under state law. As the Office of the Attorney General states:
"Massachusetts law prohibits unfair, deceptive, and unreasonable debt-collection practices. ... A violation of the regulations is a violation of the Massachusetts Consumer Protection Act, G.L. c. 93A"
Workplace call restrictions require special attention as well. Collectors can only make two calls per debt to a workplace within a 30-day period. Debtors can also submit oral requests to stop workplace calls, which are valid for 10 days, or written requests, which remain in effect until revoked. Collection systems should automatically flag and halt such calls, ensuring all contact complies with the allowed hours of 8:00 a.m. to 9:00 p.m., unless otherwise specified by the debtor.
Massachusetts has some of the toughest debt collection regulations in the country, going above and beyond federal requirements. The state's rules emphasize strict limits on contact and robust consumer protections. Violating the Attorney General's debt collection regulations also means violating the Massachusetts Consumer Protection Act (G.L. c. 93A), which allows consumers to sue for damages.
Before working with a debt collection agency, it’s essential to verify its license through the NMLS. In Massachusetts, all debt collector license applications must be submitted online via NMLS. However, passive debt buyers can sidestep licensing by hiring licensed third-party collectors or attorneys to manage collection activities, as clarified in Dorrian v. LVNV Funding, LLC. This licensing framework ensures compliance with the state’s stringent guidelines.
Technology plays a key role in navigating these regulations. Platforms like Debexpert offer tools for portfolio analytics, auctions, and secure file sharing, helping agencies stay compliant while improving operational efficiency. Automated systems are particularly useful for monitoring the six-year statute of limitations on consumer debt and ensuring that call limits remain within legal boundaries.
Documentation is another critical piece of the puzzle. Massachusetts Court Rules 8.1 and 55.1 mandate detailed affidavits and a complete chain of ownership for any collection lawsuit. Keeping clear records of bills of sale and assignments, with account references, is vital to ensuring enforceability. These practices are fundamental to maintaining the integrity of debt collection efforts in the state.
To check if a debt collector in Massachusetts is properly licensed, start by reviewing the state government's list of approved licensees, which gets updated every quarter. Another option is to verify directly through the Division of Banks, the agency responsible for overseeing debt collector licensing in the state. You can contact the Division or explore their online licensing resources to ensure the collector is operating within Massachusetts law. This step ensures the collector is authorized to conduct business in the state.
If a debt collector keeps contacting you too often, you have the right to ask them to stop. To do this, send a written letter requesting they cease communication. Both federal law and Massachusetts law require them to comply. However, this doesn't erase your responsibility to pay the debt.
Make sure to keep a copy of your letter for your records. If the collector ignores your request and continues to contact you, you can file a complaint with the Massachusetts Division of Banks or the Consumer Financial Protection Bureau (CFPB) for further assistance.
To determine if your debt is time-barred in Massachusetts, you’ll need to check whether the statute of limitations has run out. For most consumer debts - like credit cards, personal loans, or medical bills - the statute of limitations is usually six years, as outlined in Massachusetts General Laws Chapter 260, Section 2. Once this period passes, creditors typically can’t enforce the debt through the courts.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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