Debt Collector FAQ

Who qualifies as a debt collector under Maine law?

Maine Law tracks federal law; therefore, if your company qualifies as a debt collector under federal law it also qualifies as such under Maine law.

These types of companies are required to obtain a Maine debt collection license:

1. Third-party collectors of consumer debt
2. Companies that buy delinquent debt and collect on it
3. Check-guarantee companies that collect on bounced checks
4. Collectors of student loan debt
5. Collectors of child support debt
6. Attorneys who collect consumer debt (See question 2 for licensing information on attorney debt collectors)
7. Repossession companies
8. Businesses that provide residential property preservation services

My collection company has two branches, a main office and a second smaller office. Both branches actively collect debts from Maine consumers. I received a debt collection license for my main office. Am I in compliance with Maine's Fair Debt Collection Practices Act (FDCPA)?

No, your main office's license does not cover your branch. Any office that conducts direct debt collection in Maine must have an individual license. In this case, your branch office must apply for a branch license in order for your company to comply with State law.

I am an out-of-state attorney and my law firm plans to collect debts in Maine. Do I need a license?

The Maine FDCPA distinguishes between in- and out-of-state attorneys. Out of state attorneys must obtain a license if they plan to conduct debt collection activity in Maine.

When do I need to get a license?

Four sets of circumstances exist that would require your company to obtain a debt collection license:

1. If your company maintains an office in Maine.
2. If you collect on debts incurred by consumers residing in Maine.
3. If you solicit your services to Maine creditors.
4. If you collect debt in other states that were originally incurred in Maine.

Does Maine require a minimum net worth for my company to become licensed as a debt collector?

Your company must have a positive

tangible

What do I need to apply for a license?

As of October 1, 2023, the Bureau issues debt collector licenses (except for residential property preservation providers) through the Nationwide Multistate Licensing System (NMLS). Please visit the NMLS Resource Center (Trusted Partner Link) for license requirements checklists.

What are the bond requirements for debt collection companies?

When a debt collection company applies for a license, the amount of the surety bond depends on the type of debt collection activities the company plans to undertake.

• Direct collection companies and debt buyers require a bond of $20,000.
• Repossession companies and residential property preservation providers require a bond of $15,000
• Letter-writing companies (companies that do not accept funds, but direct that the funds be sent to the creditor) require a bond of $5,000.

When debt collectors renew their license with the Bureau of Consumer Credit Protection, the amount of the bond depends on the company's gross monthly Maine collections for the previous year. The Bureau of Consumer Credit Protection separates the bond amount into brackets based on average monthly collections on behalf of Maine consumers:

What is the license fee schedule?

Maine Debt collector licenses are valid for one calendar year. New licenses issued November 1 or later each year are valid through December 31 of the following year. The application and annual renewal fees for debt collector licenses (main office) are $400.00. The application/annual renewal fees for branch licenses are $200.00.

Are there any trust account requirements for companies collecting debt in Maine?

Maine law requires licensed debt collectors to maintain a trust account used strictly for, and containing all monies collected from, payments received by the collectors in payment of debts owed to Maine creditors.

State law also requires that the gross amount of debts collected on behalf of Maine creditors be deposited into the trust account no more than one day after receipt of payment from the consumer. All licensed debt collectors must withdraw their commissions from the account on a single day of each month. Each individual company may determine their commission withdrawal date, and then report that date to the Bureau of Consumer Credit Protection.

If collections on behalf of Maine creditors will amount to less than 25% of the company's total collections, the company may submit a written request to have the separate trust account requirement waived. The request must include the anticipated percentage of total collections that will be made on behalf of Maine creditors, and an indication of the company's willingness to reimburse the Bureau of Consumer Credit Protection for all examination costs associated with tracking Maine payments through the company's general trust account.

Do I need to notify the Bureau of Consumer Credit Protection if I begin undertaking new forms of debt collection activity?

Yes, your company must notify the Bureau in advance if your collection activities change after initial licensure.

Are there location requirements for my company's files on Maine consumers?

Yes, your company must maintain all documents regarding Maine consumers in the State of Maine. However, you may seek permission to keep these records outside of the State by submitting a written request to the Superintendent of the Bureau of Consumer Credit Protection. The request must contain the exact address and phone number of the files' out-of-state location. It must also express your company's willingness to pay any additional costs incurred by the Bureau of Consumer Credit Protection for examinations and investigations outside the state of Maine.

The files must be available for review at the Bureau of Consumer Credit Protection within 72 hours of a request from our agency. The Superintendent must respond no more than 30 days after receiving the correspondence. Your company must report any change in the location of its records to the Bureau of Consumer Credit Protection within ten days of the relocation.

If the consumer's debt is incurred in another state, do I need to be licensed in Maine to collect the debt?

Yes, debt collection efforts against a Maine resident who incurred the debt in another state require a Maine debt collection license.

Can the State of Maine suspend or revoke my debt collection license?

Yes, the Superintendent of the Bureau of Consumer Credit Protection may hold an administrative revocation hearing to facilitate the suspension or revocation of your company's license. Civil penalties of up to $5,000 per violation may be leveled against debt collectors by the Superintendent of the Bureau of Consumer Credit Protection, through the Maine Attorney General's office. In addition, collection without a license may result in criminal penalties; see 32 M.R.S. § 11040.

What do I need to do if I plan to shut down my debt collection business?

Your debt collection company must take several steps before shutting down:

• Notify the director of the Bureau of Consumer Credit Protection and all creditor clients of your intentions at least thirty days prior to the planned shutdown.
• Provide final financial figures for all debt collection accounts to your clientele.
• Return all funds and relevant paper work to the creditors from which it originated.

If your company wishes to sell any accounts to another debt collection company, you must receive written permission from the original creditor before doing so.