Debt Collectors Told To Pursue Consumers For Bills Owed By Health Net and WellPoint

Last week, the Los Angeles City Attorney sued WellPoint, Inc.accusing them of illegally canceling health care coverage that left consumers with unpaid medical bills that were not their responsibility. A few weeks earlier, LA filed a similar suit against Health Net, saying the insurer illegally denied more than $35 million in claims.

Thousands of people were fraudulently denied benefits. Consequently, some or all of those consumers with canceled health care coverage have ended up in collections.

You might think the bill collectors going after sick people who don't really owe the money would stop harassing them. But you would be wrong.

In advice to medical debt collectors, Rozeanne Andersen, executive vice president and general counsel for ACA International, a pro bill collector lobbyist, said, “Debt collectors are hired to collect debt.” “Until a final judgment is determined, debt collectors can assume the debt is valid.”

The advice of the ACA is to sue, garnish, lien, etc., until the California courts order Health Net and WellPoint to pay the medical bills they fraudulently skipped out on.

Then what, Rozeanne? When Health Net and WellPoint pay the medical providers where will the thousands of sick people who gave in and paid the phony bills to your bill collectors go to get their money back? How will they get your phony collection accounts off their credit reports? How do they recover the jobs they weren't hired for or the apartments they couldn't rent or the homes they couldn't buy because your bill collectors artificially lowered their credit ratings?

Any bill collector re-victimizing the people who paid their insurance but received no coverage should be added to the Los Angeles City Attorney's suit, along with their cheerleader, the ACA.

Portfolio Recovery Collections Does Not Let The Facts Stand In Their Way

Q: Is anyone else getting bizarre calls from Portfolio Recovery? They say I owe on a Visa bill from 1993! I told them I did not and they keep calling with threats and insults. I told them to take me to court and get a judge to order me to pay after they prove the debt is real.

The calls started sometime last summer and this is the first I've heard that I owe money from 1993. Are these people are valid company or are they manufacturing /buying fake debt records? To what government agency can I report them to?

A: Everybody must get calls from Portfolio Recovery. They get sued all the time for violating consumer protections and there are hundreds of complaints against them on consumer websites. Not surprising for a debt buyer that places old and unproven collection accounts on credit reports without contacting the consumers to see if it is the right person. It is somewhat surprising their stock (NASDAQ:PRAA) has tanked to under $40.00 from over $60.00 though. How can you cheat so much and still not make money?

Even if the account was with the right person they cannot sue to collect a bill past the statute of limitations however. Nor can they place a 1993 bill on a credit report. Since they are a collection agency they have liabilities under the FDCPA which do not allow them to threaten to take action they cannot legally perform. They know all that but hope you don't.

Contact a consumer attorney in your area to have them review your Portfolio Recovery information. Portfolio Recovery might just need a cease and desist letter. Or they might need a lawsuit.

Midland Credit Management Buys Debt Cheap And Wins Big

Encore Capital Group, AKA: Midland Credit Management, spends lots of time and money defending itself in court for violating federal consumer protection regulations. So much so that some might wonder how they still make money.

Today's New York Times sheds some light on the profit strategy. Encore Capital Group, AKA: Midland Credit Management, buys alleged charged off debts for pennies on the dollar from original creditors with little documentation or proof of who really owes what if anything. Then they send the collections work (files with social security numbers, dates of birth and other private information) to India, where call centers of telephone debt collectors work for 25% of American wages calling tens of thousands of Americans an hour. If you don't pay much for the paper or the bill collectors you can be wrong a lot and pay a lot of fines in federal court and still get crazy rich.

As a bonus, if the Indian debt collectors can talk somebody into monthly payments on an alleged debt so old that it is beyond the statute of limitations, the statute of limitations clock is restarted, allowing Encore Capital Group, AKA: Midland Credit Management to file suit against the unsuspecting American consumer.

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Debt Collectors Mann Bracken and Creditors Receivable Management Named In Federal Class Action

The often sued Mann Bracken, LLC and Creditors Receivable Management, LLC have now been sued in a class action for violations of federal debt collection laws on behalf of clients of Hess Kennedy, the Campos Chartered Law Firm and the Consumer Law Center.

Hess Kennedy, the Campos Chartered Law Firm and the Consumer Law Center are all law firms providing services to consumers with a specific focus on evaluating the actions of creditors and credit collection agencies and their compliance with Federal and State consumer protection laws such as the Fair Debt Collection Practices Act, Fair Credit Billing Act and the Fair Credit Reporting Act.

If you or someone you know is the victim of illegal activities by Mann Bracken, LLC or Creditors Receivable Management, LLC contact David Lipman of Hess Kennedy, +1-954-510-7848.

Central Collection Bureau Collection Agency Exposes 700,000 ID's

A computer server containing Social Security numbers and other personal information of 700,000 people was stolen from Central Collection Bureau, a debt-collector, in what appears to be the largest computer security breach ever in Indiana.

The information includes customer-billing records for about 100 businesses. Central Collection Bureau collected overdue bills on behalf of utility companies, hospitals, medical and dental offices, window companies, water-conditioning companies and flower shops.

The computer server contained personal billing information was protected by two passwords but was not encrypted. The first employee arriving at work noticed the break-in and immediately called the Indianapolis Metropolitan Police Department, which investigated but has not found the server. The collection agency has notified companies whose billing records have been compromised.

The break-in is being investigated by IMPD and the Indiana attorney general's office.

Citizen Advocate Forms Group To Help Victims Of Collection Agency Abuse

Mickey Paoletta is not a lawyer and does not dispense legal advice, but he has started a group that helps consumers know their rights in debt collection cases, and encourages them to fight.

Paoletta founded Citizen’s Reform Center, which teaches people about money and banking and how they can use that knowledge to address debt issues.

The No. 1 violation of federal law by debt collectors is that they do not have proper documentation to prove that a debt exists, said Paoletta. Debt collection agencies buy debts from credit card companies and banks. However, the paperwork collectors usually get from the initial lenders includes only basic information such as a name, address and the amount of the debt. They need to show documentation such as a contract between the debtor and the original bank or credit card company, or accounting ledgers.

The debt collection agencies hire law firms to contact alleged debtors and try to scare them into paying, Paoletta said. Sometimes, the tactic works and the debtors pay up. “The least sophisticated person will pay them anything they want,”.

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New Jersey Taking On Abusive Debt Collectors

New Jersey legislators introduced a bill that regulates the practices of abusive debt collectors and gives state authorities the power to issue more significant fines for violations.

The bill, dubbed the New Jersey Fair Debt Collection Practices Act, goes further than the federal version, the FDCPA, by imposing rules on original creditors, not just third party collection agencies that are hired by creditors or buy debt at a discount.

The bill pending before the Assembly is aimed at prohibiting abusive, deceptive and unfair collection practices. A significant provision in the bill makes some willful acts of abuse, such as knowingly placing false information on a consumer's credit report and harming their credit rating, a violation of the Consumer Fraud Act, which could mean a fine of $10,000 or more to the offending debt collector.