Rule 8.1.Special Requirements for Certain Consumer Debts

(2019)

Rule 8.1 and Rule 55.1, effective in 2019, apply to collection actions against consumers involving debts arising out of revolving credit agreements. Rule 8.1 requires the plaintiff to (1) file with the complaint documentation regarding the debt, (2) verify the defendant’s address prior to commencement of the action, and (3) certify that the statute of limitations has not expired. Rule 55.1 (1) prohibits entry of default against a defendant where the documentation required by Rule 8.1 has not been provided; (2) requires a determination that the plaintiff is entitled to judgment in the amount claimed prior to entry of a default judgment; and (3) requires reverification of the defendant’s address under specified circumstances prior to entry of a default judgment.

Collection actions involving credit cards make up a significant portion of the civil actions commenced in the Massachusetts courts, with many of them filed in the District Court and Boston Municipal Court. Many of these cases proceed to judgment by default, sometimes raising questions whether the plaintiff has used a current address for service of process.

Requiring additional documentation with the complaint is a recognition that consumers in the past often lacked critical information needed when sued for credit card debts. When an assignee of the debt is named as plaintiff in the action and a complaint is served on the defendant, the defendant may have difficulty in ascertaining the identity of the original creditor. The documentation will help consumers to identify the original creditor in instances where an assignee is seeking to collect an assigned debt and the documentation will help to confirm the amount owed. The requirement of address verification mandates extra steps to help to ensure that an address used by a plaintiff to serve a defendant is as accurate as can reasonably be expected.

The addition of special requirements in litigation involving certain types of debts is not a new phenomenon in Massachusetts. Additional documentation and address verification requirements for certain types of debts have been applicable in small claims cases since 2009 (Rules 2(b), Uniform Small Claims Rules) and in civil actions on the regular civil docket in the District Court and Boston Municipal Court since 2015 (Boston Municipal Court and District Court Joint Standing Order No. 2-15).

Rule 8.1(a). The rule applies to a “debt incurred pursuant to a revolving credit agreement” (Rule 8.1(a)(1)). This would encompass, but is not limited to, a collection action arising out of credit card debt. The definition of debt is limited to consumer debt but excludes a revolving credit agreement involving real estate (Rule 8.1(a)(3)). Thus, Rule 8.1 is not applicable to a suit on a debt arising out of a home equity line of credit where the collateral is real estate.

Rule 8.1(b). The required items must be served on the defendant with the complaint. Accordingly, copies of all such items should be sent to the process server to be served together with the summons and complaint.

Rule 8.1(c). In connection with preparing an affidavit regarding debt, care should be taken not to include personal identifying data. Rule 5(h). Credit card numbers and other personal identifying information must be redacted consistent with Supreme Judicial Court Rule 1:24, Protection of Personal Identifying Information in Publicly Accessible Court Documents. See SJC Rule 1:24, §§ 3 and 4.

Rule 8.1(d). These documents are intended to provide a defendant with details about the nature of the claim, the amount allegedly owed, and the identity of the original creditor.

Rule 8.1(e). The address verification requirements provide various methods for the plaintiff to determine and confirm the defendant’s address. The verification must have occurred within three months prior to plaintiff having commenced the action.

Rule 8.1(f). The plaintiff must certify, based on a reasonable inquiry, that the statute of limitations has not expired on the claim and must provide the statutory or caselaw basis for the period of limitations applicable to the debt. Even though the statute of limitations is a listed affirmative defense under Rule 8(c), this requirement places the burden on the plaintiff to determine, and certify, that the action is not stale. A regulation of the Massachusetts Attorney General provides that it is an unfair or deceptive act or practice for a debt collector to attempt to collect a consumer debt that “the creditor knows, or has reason to know based on a good faith determination, is a time-barred debt” unless the creditor makes certain disclosures, including that the debt may be unenforceable because it is time-barred. 940 CMR § 7.07(24).