On August 12, 2021, the Massachusetts Attorney General (AG) announced a settlement with an online loan servicer, resolving allegations that the company engaged in abusive debt collection practices in violation of the AG’s debt collection regulations.
After the AG’s Office conducted an investigation into the company, the Massachusetts AG alleged that the company, which services short term installment loans, failed to provide validation notices to consumers that had missed payments. Under the AG’s debt collection regulations, consumers are entitled to receive certain documents that verify their debt, including credits, balances, and charges on the debt.
The Massachusetts AG also alleged that the company engaged in excessive telephone calling to debtors to collect on the debt by initiating more than two telephone calls to a debtor in a seven-day period, in violation of the debt collection regulations.
The company has now brought its practices into compliance with the applicable regulations, and, under the terms of the settlement, the company is required to continue to comply with them. The company will also pay a $1.6 million penalty to the Commonwealth.