Washington Governor Signs Bills on Debt Collection

New requirements on legal filings and medical debt collection take effect July 28.

5/6/2019 1:15 PM

Washington Governor Signs Bills on Debt Collection

Debt collectors licensed in Washington have new requirements in effect this summer for filing legal summons and the timing for medical debt collections; matters members of the Washington Collectors Association testified on during the legislative session.

Gov. Jay Inslee signed H.B. 1066, requiring debt collection complaints to be filed prior to service of summons and complaint; and H.B. 1531, concerning medical debt, on April 30.

“Our goal going into this session was to be good listeners. I think it was a great year for building relationships with consumer advocates and lawmakers that weren’t previously familiar with our industry,” said Kelsi Hamilton, CCCO, unit legislative committee chair for the Washington Collectors Association and compliance and legal affairs at Dynamic Collectors Inc. in Chehalis, Washington.

Members of the Washington Collectors Association testified in the state legislature as the bills were under review, noting that H.B. 1066 would apply to many other types of cases, not just debt collection. Those in opposition to the bill suggested courts could take action to modify the rules for commencing a lawsuit to apply a rule across the board and not simply single out debt collection agencies,” according to a bill summary.

H.B. 1066, “Prohibits a collection agency from serving a debtor with a summons and complaint in a debt collection lawsuit unless the court documents are filed with the court first and the assigned case number appears on the service documents.”

The changes take effect July 28, 2019.

“Under current law, a collection agency may start its lawsuit in superior court if the court has jurisdiction over the parties, the subject matter of the action, and the venue, or county of filing, is correct. In superior court, the collection agency may elect to file the complaint with the court first, then serve the debtor, according to the new bill summary. “Alternatively, the collection agency may elect to serve an unfiled summons and complaint on the debtor.”

New Medical Debt Collection Requirements

The Washington Collectors Association was credited with helping to improve H.B. 1531, which amends the Washington Collection Agency Act.

“We are proud of the work we did and feel the outcomes of the bills we advocated for are fair reforms,” Hamilton said. “We look forward to continuing conversations with consumer advocates and lawmakers and are committed to promoting fair and ethical standards for consumers but also desire to maintain and protect business and accountability.”

Amendments to the Washington Collection Agency Act take effect July 28.

“There are many important components contained within this bill. The Washington State Hospital Association, Washington State Medical Association, and the Washington Collectors Association all made the bill better, and they are to be thanked for this work,” according to the bill summary.

The new requirements include:

The prohibited practices section of the Collection Agency Act is amended to prohibit the following practices with respect to medical debt:

  • failure to include with the first written notice to the debtor a statement that informs the debtor of his or her right to request the original account number, the date of the last payment, and an itemized statement;
  • failure to provide, upon request of the debtor for more information, an itemized statement, and failure to cease collection efforts unless and until it is provided, with some exceptions;
  • reporting adverse information to consumer credit reporting agencies or credit bureaus until at least 180 days after the original obligation was received by the licensee for collection or by assignment; and, if the claim involves hospital debt, failure to include certain information regarding charity care or collection during the pendency of an application for charity care about which the licensee has received notice.

“I think anyone collecting medical debt in Washington state needs to pay close attention to the itemization requirements and make sure there are policies and procedures in place in terms of what triggers a request,” Hamilton said.

The bill also prohibits health care providers and facilities from selling or assigning medical debt to any person licensed as a collection agency until at least 120 days after the initial billing statement has been transmitted to the patient or other responsible party, according to the summary.

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