Two Collection Agencies Close Down in Face of License Dispute

by Mike Bevel, CollectionIndustry.com

Faced with the choice of getting a license to operate legally or closing-up shop, brothers who own two of Massachusetts?s busiest and, as the Boston Globe puts it, ?notorious,? debt collection firms have gone with the latter and called it a day.

Friday, September 29, was the deadline for Daniel W. Goldstone, owner of Norfolk Financial Corp., and Chad E. Goldstone, owner of Commonwealth Receivables Inc., to apply for licenses from the state Division of Banks. Rather than comply, Norfolk has moved out of its West Roxbury office and set up shop in Rhode Island, a state that does not require licenses for collection firms.

The Goldstones have argued that they do not need to be licensed in the state of Massachusetts since they own the debt they are collecting. In that case, they would be like any other company collecting on bad debt internally. However, Massachusetts law doesn?t necessarily recognize that distinction, or even allow it: Massachusetts law changed in 2004 requiring debt-purchasing firms as well as debt collection agencies to be licensed.