ACA Cast: Court is in Session on Medical Debt Collections


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Compliance Analysts Andrew Pavlik and Laura Dadd review insights to know on FDCPA cases connected to medical debt and credit reporting.

3/2/2020 9:00

The appeal for Rhone v. Medical Business Bureau LLC was supported by ACA International’s Industry Advancement Fund and through filing an amicus brief for Medical Business Bureau LLC, an ACA member, urging the 7th Circuit to reverse the district court’s erroneous decision.

“The opinion provides clarity on reporting a series of debts by finding that the type of obligation determines the character of the debt and not the number of debts the consumer has incurred,” Dadd explains on the episode, noting it is important to remember that the rule of thumb created by this ruling stands only in the 7th Circuit. Courts in other districts may not agree with this reasoning.

At the outset of the second case, Alleman v. Collection Professionals, Inc., an Illinois district court observed the dispute came down to a disagreement over the meaning of the phrase “reasonable collection costs” in a medical billing agreement. The consumer argued that collection costs attributable to a third party’s operations must themselves be authorized in an agreement between the creditor and debtor.

Pavlik provides more expertise on how the fees did not result in a profit for the debt collector and led to the court’s favorable ruling.

However, Dadd notes, the case is under appeal in the 7th Circuit, so the Illinois court’s ruling may not be the final word.

ACA members may access more legal resources and case analysis on the Industry Advancement Fund website.

For more insights on Rhone v. Medical Business Bureau LLC, read the November 2019 Collector magazine article “Do Your Policies Measure Up?”

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