The state’s debt collection regulations are among the strictest in the country, and the settlement is one of the most important of its kind.
“Our debt collection regulations are in place to protect consumers from the abusive and illegal practices of companies like Avant,” Healey said in a statement. “This regulation will provide money to help consumers who are harmed by deceptive and unfair practices.”
A spokesperson for Avant called the settlement a “mutually acceptable resolution.”
“We are delighted that this matter is resolved and remain focused on providing clients with seamless access to credit that simplifies their journey to financial health,” she said in an email to The Globe.
The investigation, which dates back to 2015, was opened after consumers complained to the attorney general’s office. When investigators examined company records, they found evidence of thousands of violations, the attorney general’s office said.
State regulations limit the number of calls creditors can make to debtors to a maximum of two in any seven-day period.
“Before would pursue clients with calls and collection letters, doing so thousands of times during the investigation period, often calling a debtor’s residence, cell phone or other home phone more than twice over a period of seven days, “the attorney general’s office said. in a report.
The attorney general’s office also alleged that Before, before 2018, violated state regulations that require creditors to notify debtors that they are entitled to documents verifying their debt, including any signed agreements. of the debtor and an accounting of the date and amount of payments. , credits, balances and charges on the debt.
The company has “fully and willingly” cooperated with the attorney general’s office, including providing documentary material, according to the attorney general’s office.
Before, an online loan service for short-term installment loans, “neither admits nor denies” the attorney general’s allegations, according to the 11-page settlement document filed in Suffolk Superior Court.
The terms of the settlement include prior assurances that it will comply with state regulations. Before “claims to have independently corrected” the conduct alleged by the attorney general’s office, according to the regulations.
The settlement was applauded by April Kuehnhoff, an attorney at the National Consumer Law Center in Boston.
“The frequency of calls is one of the main reasons for consumer complaints about debt collection,” she said. “Massachusetts is one of a handful of state and local governments that have placed limits on collection calls. “
State regulations also set limits on calls to a debtor’s workplace and the time that calls can be made.
The attorney general’s office reached a similar settlement in 2016 with Ditech Financial, a national mortgage manager that previously operated as GreenTree, according to an attorney general press release dated 2016.
Ditech agreed to pay the state $ 1.4 million for its alleged abusive debt collection practices, including excessive phone calls to borrowers and failure to inform them of their right to documentation of their debt, according to the Press release.
Avant’s $ 1.6 million payment will be used to fund local consumer programs statewide. These community-based programs, which work with the attorney general’s office, provide free information and mediation to consumers.