All debt collectors, even medical debt collectors pursuing unpaid medical bills on behalf of hospitals, have to abide by certain federal and New York state laws when attempting to collect medical debt from Long Island residents. There there have been numerous instances of medical collection agencies, and even providers, violating the Fair Debt Collection Practices Act (FDCPA) and other state consumer laws when attempting to collect unpaid medical bills. The most common violations include ignoring the FDCPA’s general prohibitions against:
- Deception; and
- Unfair debt collection practices.
There have also been many instances of medical bill collectors:
- Failing to provide consumers with appropriate notices under the FDCPA;
- Failing to disclose their identities a medical debt collectors in telephone calls;
- Suing consumers for unpaid medical bills in an inappropriate forum;
- Failing to abide by a cease communications request;
- Failing to verify medical debts and respond to requests for validation as required by the FDCPA;
- Contacting debtors represented by counsel;
- Contacting third parties for information beyond location information;
- Engaging in “flat-rating,” that is, the practice of a medical creditor collecting its own debts by using a debt collector’s letterhead to add intimidation value;
- Sending debt verification notices that instruct debtors to direct questions regarding insurance filings with insurers, which could mislead debtors into believing that they should resolve debt collection issues by pursuing claim with insurers;
- Attempting to collect unpaid medical bills against consumers who had filed for bankruptcy protection, in violation of the automatic stay or discharge injunction;
- Suing or threatening to sue consumers on medical debts past the expiration of the statute of limitations;
- Misstating the amount of the unpaid medical debt as more than legally owed;
- Dunning or suing consumers who were not liable for the unpaid medical bills;
- Agreeing to take a post-dated check, then threatening or seeking criminal prosecution when it is cashed early and returned unpaid;
- Collecting medical debts already paid by insurance, government programs, or by the debtor;
- Attempting to collect unpaid medical bills that were disputed by the consumer while failing to provide the validation required by the FDCPA;
- Suing consumers for unpaid medical bills that had been forgiven under a charity care program;
- Falsely threatening imminent legal action for failure to pay medical bills;
- Suing consumers for unpaid medical bills that the provider had not assigned to the debt collector;
- Demanding repayment of illegal and excessive collection fees not authorized by contract or New York state law;
- Making unauthorized withdrawals from a consumer’s bank account;
- Dunning consumers who clearly did not receive the medical or hospital services allegedly incurred; and
- Suing victims of identity theft for medical bills incurred by the thief.
Violations of other laws could violate the FDCPA. In particular, a violation of the prohibition against a provider “balance billing” a consumer—that is, seeking to collect more from a consumer than what Medicare, Medicaid, or other insurers would pay—could violate the FDCPA or New York state’s Unfair and Deceptive Practices Act.
FDCPA claims may be asserted in individual suits against the collection agency, as one of several counts in a broader health services class action, or as a counterclaim or third-party complaint in a collection suit filed by a collection agency or a health care provider.