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Debt Collectors Coming to a Hospital Near You (Minus the Bedside Manner)

Posted in Consumer Protection

Desperate times sadly bring on despicable measures, just ask Marcia Newton.  Ms. Newton’s son needed surgery.  “But oh no.  Hold the scalpel, doctor.  These folks must pay us FIRST.”  Paying first is pretty common.  Happens every day, but at a hospital?

Yep.  Hounding patients for money up front while they await care is a specialty of Accretive, a company that works nationwide to collect medical debts.  Identified recently in Jessica Silver-Greenberg’s New York Times article, these clever folks are right there in the emergency room, asking for a credit card or check payment prior to treatment.  Trying to avoid them?  Guess again—in many cases they dress as hospital employees.

The issue has become more prevalent during the economic downturn.  Hospitals are owed $40 billion currently, and creditors have turned to selling off “bad debt” at pennies on the dollar.  The debt-buying companies are professionals at hounding.  If they recover 10% of the debt, they’re doing well, and many will stop at nothing.  They will pry the money from your dead fingers, so to speak.

This won’t shock you, kind reader, but debt collectors are violating an assortment of state and federal laws.  Fair debt collection laws require debt collectors to clearly identify themselves as such.  The law also forbids threatening intimidation tactics—does standing between a patient and her life-saving medical service qualify?  Even a Soprano couldn’t think of a scarier way to say, “Pay up or else.”

The answer, at least for now, is to remain diligent and aware of your rights as a debtor.  One conscientious woman who knew her rights—she calls herself an “accidental activist”— is set to recover $10 million from the company that messed with the wrong debtor (literally, the debt was not hers).  Not all debtors will be so fortunate, but knowing what is allowed and what is not—and reporting violations—is an important start.  Please advise the Corporate Observer of any abusive debt collection practices and good luck.


Assisted by Arezu Hadjialiloo