| WRITTEN TESTIMONY OF ERIN TRABUCCO, GENERAL COUNSEL
BEFORE THE JOINT COMMITTEE ON FINANCIAL SERVICES
DECEMBER 4, 2007 RE: H.1104, AN ACT RELATIVE TO REGULATING COLLECTION AGENCIES ___________________________________________________________________________________________________ The Retailers Association of Massachusetts (RAM), established in 1910, is a statewide trade association of over 3,000 member companies. Our membership ranges from independent “mom and pop” stores and restaurants to larger national retail chains. The retail industry's contributions to the Commonwealth include $108 billion in annual sales; $4 billion in annual sales and meals taxes; 18% of Massachusetts jobs; and operations in at least 38,000 locations across the state. RAM wishes to be recorded in strong opposition to H.1104, An Act Relative to Regulating Collection Agencies. This legislation would place significant burdens on debt buyers and debt sellers by requiring monthly statements and notices to debtors. The cost of compliance will increase debt buyers' expenses in Massachusetts and will affect the price debt buyers pay for accounts. Retailers and other businesses in the Commonwealth that extend credit and are unable to collect from delinquent customers should be able to sell their debt and recover as much as possible to mitigate their loss. This legislation will undoubtedly decrease the percentage a company in Massachusetts can recover by selling debt. Notices sent by debt buyers to debtors detailing their account activity will simply go unread. Customers who are far enough in delinquency that their account is sold have already received letters from the debt sellers and have been non-responsive. Debt buyers typically have large inventories of accounts for customers who have never paid and will likely never pay. The few accounts that do pay may not bring in enough money to the debt buyer to cover the cost of compliance. The cost of maintaining accounts with monthly statements would be so high that debt buyers may simply refuse to buy accounts in Massachusetts. RAM urges an Ought Not to Pass Committee recommendation for H.1104. Thank you for your consideration. |