Licensing Overview
A growing number of states require licenses for debt buying/collecting. Operating without one can void the debt buyer's ability to collect.
States with Requirements
California, Connecticut, Georgia, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Texas, Washington, and others. Requirements and penalties vary.
Consequences of Unlicensed Collection
The debt may be void or unenforceable, the debtor may have a defense and affirmative claim, and the state AG may take enforcement action.
Frequently Asked Questions
How do I check if they're licensed?
Contact your state's banking department or AG's office. Many have online lookup tools. The collection letter should include a license number.
Does unlicensed collection void the debt?
In some states, yes. In others, it creates a violation with damages but the debt survives. Check your state's specific statute.
Can I raise it as a defense in court?
Yes. If the debt buyer is not properly licensed, raise it as an affirmative defense and potentially a counterclaim.
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