The following was written by Manny Newburger from Barron & Newburger and is re-published with his permission.
Hey, Collection Industry. You just won a temporary restraining order (TRO) against Massachusetts Attorney General Maura Healey, blocking enforcement of her emergency regulations that bar calls from debt collectors and litigation by both debt collectors and creditors. What are you going to do now?
If you collect in Massachusetts it is likely that you are asking yourself that question. I will suggest some relevant considerations for determining what you do next.
The order is a temporary restraining order. Such an order is intended to protect the status quo until a final determination of the merits of the plaintiff’s claim. ACA International’s Complaint seeks the final remedies of declaratory and permanent injunctive relief. Until those claims are decided the ACA has not won the war, but it has certainly won the first battle. However, what if the Attorney General wins at trial? What if she appeals? Are you willing to take on for your business the risk of ignoring the rules before there is a final judgment?
Realistically, the order is well-written. It preliminarily finds the constitutional defects that I have raised in webinar discussions for the last few weeks. So setting aside the fact that the final battle has not yet been fought, what does this order mean?
The starting point for your analysis is really the final sentence of the order: “This Order is intended to have no impact on any other law or regulation regarding debt collection that is now in force.” The TRO does not impair the preexisting Massachusetts Attorney General Debt Collection Regulations. It does not impair the FDCPA. The judge has made that clear. Therefore, you cannot call consumers at times or places that you know or should know are “inconvenient.” In normal times, this prohibition is used mostly to limit the timing of calls. but these are normal times
The problem is not limited to Massachusetts. As shelter-in-place orders continue, businesses stay closed, and thousands of people a day are diagnosed with COVID-19, could any of the following make a call “inconvenient”?
- The consumer has been furloughed for over a month and has no idea if or when the furlough will end.
- The consumer has been informed that her employer is filing for bankruptcy protection and is not reopening.
- The consumer has children whose school will not be reopening until fall and who must be home-schooled.
- The consumer has been stuck alone, sheltering in place, and is severely depressed.
- The consumer is recovering from COVID-19.
- The consumer is suffering from COVID-19.
- The consumer has a family member who is recovering from COVID-19.
- The consumer has a family member who is suffering from COVID-19.
- The consumer has a family member who has died from COVID-19.
To some degree these issues reflect problems with which debt collectors deal every day. The difference is that, in the COVID-19 era, the number of these issues that collectors encounter are likely to be substantially greater.
Nothing in the TRO excuses debt collectors from the duty not to communicate with consumers a times or places that they know or should know are inconvenient. Nothing in the TRO prevents Attorney General Maura Healey from opening an investigation on any debt collector about whom her office receives complaints about harassing or inconvenient calls. You say your people are “solid” and well trained? No problem. After you produce to the AG all of your policies and procedures, hundreds (or even thousands) of collection files, and hundreds (or even thousands) of call recordings you just have to hope that: (1) the AG agrees with you; and (2) all of your calls were flawless. You can meet that standard, right?
I said weeks ago that your collectors need to be “compassionate questioners.” I stand by that. They are your first line of defense. It is not about Massachusetts; it is about every state. The questions your collectors ask are the start of your defense.
If you ask a consumer if she is working, and she says “yes,” your collector has just provided you with an argument for why it is not such a bad thing to call that consumer. Asking “how are you doing” opens the door to gathering useful information. Saying: “It sounds like things are pretty tough right now. Is there anything we could do to make it possible for you to resolve your account>” may not get you a payment, but it may get you respect, praise, and (most importantly) a willingness to talk to you next month as things improve.
Can you call into Massachusetts? As of today, technically, yes. My hope is that this sparks an appropriate internal discussion. If you need help, our team is here.
