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A Massachusetts healthcare company sued by the state for “unfair, deceptive and abusive debt collection practices” recently settled with prosecutors, effectively losing their case by agreeing to pay a $2.5 million settlement. The case could prove beneficial to efforts by state officials to bring similar cases in the future.
The case also illustrates how debt collection laws are designed to protect consumers from abuse. Whether or not you believe the laws go too far, it is hard to argue against the need for them. Left to their own devices, some creditors will do just about anything to get paid.
It will be interesting to note how quickly the company coughs up the money. Wouldn’t it be something to see them slow-walk the process long enough to force the state to bring in a judgment collection agency? That is unlikely to happen, but it would be fun to watch, nonetheless.
More About the Case
According to state prosecutors, Regional Home Care was guilty of numerous violations in their efforts to collect from thousands of patients enrolled in the state’s Medicaid program. Some of the patients legitimately did not owe anything. Others did utilize service, but those services had already been covered by Medicaid.
The company allegedly filed as many as 13,000 debt collection lawsuits against targeted customers. State officials were tipped off by the fact that virtually none of the targeted customers lived in the same district where the lawsuits were filed, nor utilized services from providers in the district. Regional Home Care was accused of:
threatening consumers with collection efforts
not informing consumers of their rights
taking advantage of consumers who could not travel to defend themselves in court.
It appears as though the company’s scheme was conceived precisely to take advantage of consumers who lacked the resources and knowledge to fight back. According to the lawsuit, thousands of them suffered significant financial harm as a result of the company’s actions. Their willingness to pay such a large settlement doesn’t come with an admission of guilt, at least in the eyes of the law. But settling is an indirect admission couched in the reality that fighting the case in court would have meant the truth ultimately coming out.
The Law Must Be Followed
Regional Home Care has had its proverbial wrist slapped. Paying out $2.5 million will be a stark reminder that they must follow the law just like any other creditor. That’s why it would be so interesting to see the state call in a judgment collection agency to go after the company. Although Salt Lake City-based collection agency Judgment Collectors doesn’t operate in Massachusetts, they say companies like theirs are held to strict rules in every state in which they do business.
Imagine Regional Home Care accusing a judgment collection agency of not following the rules. It would be a classic case of the pot calling the kettle black. Watching legal proceeding unfold after such complaints would reveal a double standard most of us could do nothing but laugh at.
Justice for Massachusetts Consumers
Regional Home Care will pay up and move on. A year from now, only the people who were directly impacted by the company’s abusive collection practices will remember anything about what happened. The rest of the state will have moved on.
The positive thing is that justice was done for the Massachusetts consumers abused by this company. Perhaps state prosecutors will be even more motivated to go after other creditors willing to behave the same way. Suffice it to say there is plenty of justice waiting to be dispensed.
