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Massachusetts Supreme Judicial Court Holds Passive Debt Buyers Are Not Debt Collectors Under Massachusetts Law

Massachusetts Supreme Judicial Court Holds Passive Debt Buyers Are Not Debt Collectors Under Massachusetts Law

By: Sean R. Higgins and Matthew N. Lowe

The Massachusetts Supreme Judicial Court recently held in Dorrian v. LVNV Funding, LLC,[1] that “passive debt buyers” are not “debt collectors” required to be licensed under the Massachusetts Fair Debt Collection Practices Act[2] (“MDCPA”).

Dorrian is a class action lawsuit filed by borrowers in default who alleged that defendant LVNV Funding, LLC (“LVNV”) was operating as a debt collector without being licensed under the MDCPA.[3]  Notably, the plaintiffs did not sue the third-party LVNV contracted with to handle all collection and servicing, which was licensed as a debt collector under the MDCPA.  The trial court certified the class and granted summary judgment in the borrowers’ favor on their claims that LVNV violated the MDCPA by operating as an unlicensed debt collector.[4]

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