Industry Comes Out Against State Debt Purchasing Bill

A Massachusetts state legislative committee Wednesday heard arguments against a proposed bill that would require debt purchasers to notify debtors in writing when their accounts are purchased.

The Joint Committee on Financial Services held a hearing Nov. 7 to consider House Bill 1104 (“State to Hear Debt Purchaser Notification Bill,” Nov. 2). The bill, among other things, would require debt purchasers to notify debtors in writing when their accounts are bought, the dollar amount of the debt, the original creditor, the date the debt was bought, and any additional fees and charges the purchaser is entitled to charge in the collection of the debt. The bill also would require debt purchasers to send monthly invoices to consumers.

Wednesday, the joint committee was slated to hear arguments for and against the bill in advance of a vote. Two ARM executives spoke out against the bill: Jay Gonsalves, President and owner of Action Collection Agency of Boston and ACA International’s President-Elect; and Jeffrey Bovarnick, founder and managing director of Asset Recovery & Management Group, a Needham, Mass.-based debt purchaser and collector.

The comments focused on the impact the bill would have on debt purchasers doing business in the state and how the bill unnecessarily goes beyond the FDCPA in protecting consumers.

The status of the bill is uncertain at this time. A source close to the bill told insideARM.com that the bill is still being held in committee, with no clear timetable for a recommendation or prospect of being heard before the entire Massachusetts legislature. The Massachusetts House web site also has not updated the bill’s status as of midday Monday.