The Maryland State Collection Agency Licensing Board (CALB) released an advisory notice this month
The notice acknowledges a letter provided by CALB in June 2007 may have created confusion over licensing requirements for debt purchasers who collect only through civil litigation. The notice clarifies that a debt purchaser who collects a consumer claim through civil litigation is a collection agency under Maryland law and required to be licensed as such, regardless of whether an attorney representing the debt purchaser in litigation is a licensed collection agency.
The advisory notice states, however, no action will be brought against a debt purchaser solely for not being licensed when filing suit on a purchased defaulted consumer claim, provided the debt purchaser applies for a license on or before Aug. 31, 2010.
Notably, the advisory notice and applicable regulations do not require all debt purchasers to obtain a license. It still appears debt purchasers that do not actively engage in collection activity or engage in civil litigation are not required to obtain a collection agency license.
Debt purchasers may wish to confer with the Maryland Collection Agency Licensing Board or qualified counsel to ensure all business practices of the debt purchaser do not trigger Maryland's licensing requirements, ACA officials advise.
