COVID-19 Mass. Debt Collection Ban Struck Down

 An emergency regulation from the Massachusetts attorney general banning certain debt collection calls and lawsuits was blocked Wednesday by a federal judge, who said the measure violates the First Amendment rights of collection agencies without adding meaningful protections for consumers.

Granting trade group ACA International Inc.'s request for a temporary restraining order, U.S. District Judge Richard G. Stearns ruled that Attorney General Maura Healey already has robust debt collection safeguards on the books and the only thing the emergency regulation does is single out certain types of debt collection and violate commercial free speech.

"While I laud the Attorney General's desire to protect citizens of Massachusetts during a time of financial and emotional stress created by the Covid-19 pandemic, I do not believe that the regulation adds anything to their protections that the existing comprehensive scheme of law and regulation already affords to debtors," Judge Stearns wrote, "other than an unconstitutional ban on one form of communication."

In addition to banning telephone calls by certain debt collectors, the regulation also made it a violation of the state consumer protection statute, Chapter 93A, for those same collectors to bring a lawsuit. ACA argued that banning debt collection lawsuits runs afoul of federal law.

Judge Stearns agreed, finding that the scales tipped in favor of ACA members who reported revenue drops of 20% to 50% in Massachusetts. From law360.com, to read more, click here.