Bill > S175

This bill establishes new protections for consumers against unsolicited loans by creating Chapter 140F, "Unsolicited Loan Consumer Protection." It defines an "unsolicited loan instrument" as a negotiable check, money order, draft, or similar item used to activate a loan that the consumer did not request, and an "addressee" as the intended recipient. The bill prohibits any person or entity from issuing these unsolicited loan instruments. Crucially, it states that an addressee will not be held liable for any debt incurred from the "unauthorized use" of such an instrument, which means someone other than the addressee negotiates it without their permission and the addressee receives no benefit. If unauthorized use occurs, the issuing institution must provide the addressee with a written release from liability, take steps to fix any negative impact on their credit rating, and inform them in writing about these actions. Furthermore, financial institutions cannot take funds from an addressee's account due to a default on a debt arising from the unauthorized use of an unsolicited loan instrument. Knowingly sending an unsolicited loan instrument can result in a fine of up to $5,000 per violation. The Commissioner of Banks is tasked with creating rules to implement this chapter, and any violation will be considered an unfair or deceptive act under Chapter 93A, which addresses consumer protection.