LVNV Funding Must Obtain Debt Collection License Rules Massachusetts Superior Court
Debt collector LVNV Funding is operating unlawfully in the Commonwealth of Massachusetts, having failed to obtain a debt-collection license before engaging in collection activity, says a new decision from the Business Litigation Session of the Massachusetts Superior Court.
The case, a class action brought by Culik Law and co-counsel, was filed alleging that LVNV Funding violated the debt-collection licensing law, G.L. c. 93, § 24, and the Consumer Protection Act, G.L. c. 93A.
The Massachusetts Division of Banks licenses debt collectors. Without a license, a debt collector is not permitted to collection from Massachusetts consumers. LVNV Funding, however, never obtained a license before collecting.
LVNV’s collection activity is widespread. According to the decision, it filed over 18,000 lawsuits (17,000 of which resulted in decisions against consumers). It has reported over 600,000 accounts to credit reporting agencies. And it has brought 6,175 wage garnishment actions against Massachusetts consumers, all in the past five years.
Nevertheless, LVNV Funding contended that it was not engaged in debt collection because it was merely a passive debt buyer, not a debt collector. LVNV Funding’s collection lawsuits are filed by a number of different Massachusetts collection law firms, including Lustig, Glaser & Wilson, P.C., Kream & Kream, Schreiber/Cohen, LLC, Solomon & Solomon, PC, among others. Its collections are often done by Resurgent Capital.
The judge rejected LVNV Funding’s argument, holding that LVNV Funding’s activities fall into multiple categories of “debt collection.” Furthermore, the fact that much of the collection work was delegated to attorneys or other debt collectors did not exempt LVNV Funding from having to comply with the statute. “To conclude that LVNV is not a debt collector so as to require a license under these circumstances would exalt form over substance,” wrote the judge.
The judge’s decision means that a judgment will now likely enter against LVNV Funding, and a further hearing has been set. It is hoped that the decision will put an end to LVNV Funding’s unlicensed debt collection and force it to obtain a debt-collection license. This decision is certain not to be the end of the road for this issue, but it is a positive step for Massachusetts consumers dealing with LVNV Funding.
The decision is here: Dorrian v. LVNV Funding
Culik Law represents consumers against debt collectors and debt buyers like LVNV Funding in collection lawsuits. Contact us to see if we can help.