Senator Dan Wolf
Massachusetts Cape & Islands District
Senate Passes Bill to Protect Against Abusive Debt Collection

BOSTON—Today, the Senate passed legislation to address undue and deceptive practices of the debt collection industry in the Commonwealth. The Bill, S.2409, An Act Relative to Family Financial Protection, safeguards borrowers against debt collector harassment and empowers consumers to repay debt andtake more control over their economic security.

“Since the end of the Great Recession, debt collecting as an industry has grown substantially and has been the subject of numerous complaints to the Attorney General’s office. This legislation protects individuals from deceptive practices while also ensuring that repaying delinquent debt will not result in financial hardship,” said Senate President Stan Rosenberg (D-Amherst).

“Abusive debt collection practices often target our most vulnerable residents - our poor, disabled and elderly neighbors and loved ones. This legislation includes meaningful regulation of debt collection activities to protect consumers and ensure they are not subject to harassment or unwarranted financial burden,” said Senate Committee on Ways and Means Chair Senator Karen E. Spilka (D-Ashland).

 “This bill puts into place better protections to help reign in many of the debt collectors most deceptive predatory practices,” said Senator Jamie Eldridge (D-Acton).  The debt collector industry is rampant with abusive practices that undermine the economic security of our poorest and most susceptible populations, including senior citizens, individuals with disabilities and the poor, by ensuring that they have the ability to repay debts without leaving residents on the edge of financial ruin.”

 “Predatory debt collection practices undermine the financial security of many of the most vulnerable members of our Commonwealth,” said Senator Sal DiDomenico (D-Everett), Vice Chairman of the Senate Committee on Ways & Means. “People who are struggling with financial difficulties should not be subject to harassment and intimidation by collection agencies, and I am confident that this legislation will ensure that consumers are given the protection they need.”

Under the bill, consumers would be allowed to maintain a baseline level of their own income for basic expenses, which gives consumers the ability to pay off their debt without causing financial hardship.  In addition, the bill also eliminates the practice of “tolling” which is the deceptive practice of collecting debt from consumers after the statute of limitations expires.  Currently, if a consumer makes a payment on debt after the statute of limitation expires, the statute of limitations starts over without the consumer’s knowledge.   The bill also limits attorney’s fees and interest that creditors and debt collectors can recover.

Debt collectors would also be prohibited from pursuing court judgments on debts more than 4 years old. The bill would also decrease the period of time to begin collection on a court judgment from 20 years to 5 years. It would also reduce the number of warrants for arrest issued in debt collection lawsuits.

Since 2006, the Office of the Attorney General has received approximately 1,300 complaints a year about the debt collection industry. Their findings revealed that debt collectors seek to collect money consumers do not owe or make errors about the actual amount that is owed.

The bill will be taken up for consideration by the House of Representatives.