Abusive Debt Collection: Part Two

The State of the Art in Debt Collection

Several months ago, I was contacted by a bill collector about a medical bill that had been paid by my insurance company.

I learned that the hospital had a contract with my insurance company to accept a discounted amount from the insurance company as full payment of the bill.

However, the hospital hired a collection agency to try to collect the difference between what the insurance company paid and the full bill. After many months of calls and letters back and forth, the hospital was finally convinced that I didn't owe the money.

Now another bill collector has contacted me over the same bill. How can they do this? How many times do I have to go through this?

Carole

I had the same problem with a hospital bill more than once. The hospital closest to where I used to live had a similar contract with my insurance company, but every time I used the hospital's services, I would get dunned for a supposedly unpaid bill. Several times the hospital sent the bills out for collection.

The insurance company had to use its legal department to set the hospital straight.

I never had the problem of a second bill collector getting involved, but I understand this is becoming more and more common. Read about abusive debt collection practices. Also read this article about the rights and protections accorded to you by the Fair Debt Collection Practices Act.

The problem seems to be that debt collection firms are scrounging around for uncollected debt, even debt once considered uncollectable. (See "Zombie" Debt Collectors for more information.)

They pay very little for his debt and so make money even if they only collect a small percentage.

However, one bite of the apple is not enough for them. Whether successful in collecting the debt or not, these debt collection firms often resell the account to another debt collection firm, which starts the process over again.

That is why, if you do owe money and try to settle with a bill collector, get your agreement in writing before making any payments. You can use this written agreement as a weapon against the second bill collector.

In your case, get the name, address and phone number of the second bill collector, if you don't already have it. Send a certified letter, return receipt requested, spelling out in detail what has gone on before and insisting that you owe nothing. Demand they cease bothering you by phone or mail.

If they don't, first file a complaint with the FTC and your state's attorney general.

Then find an attorney and use the provisions of the Fair Debt Collection Practices Act to file a suit against the debt collection firm for damages. The way to go about this are contained in the first two articles cited above.

The only way to combat abusive debt collection firms is to force them to pay you damages. Even then, they don't seem to learn their lesson, but rather move on to their next uninformed victim.

Finally, check your credit reports periodically to make sure these firms don't add negative items to your report. If they do, follow the procedures in Your Credit Report to get them removed.