Get a derog from never a day late!!

Discussion in 'Credit Talk' started by greyfox, Jul 28, 2001.

  1. greyfox

    greyfox Well-Known Member

    This is a long, frustrating story. I need to know what to do next.

    I live in a rural area with a small community hospital, and had an ER visit in June. My insurance only pays 80%, and an ER person told me that the hospital would work with me on the balance, $450. I should have put it on a credit card immediately, but have had these no interest arrangements with hospitals before, so I called the business office and made arrangements to pay off this balance at $30 month. The lady told me that I would hear from TCS in a few days, with the paperwork for this arrangement. I asked if TCS were a "finance company" since I knew that sometimes finance companies bought receivables. She LIED!! and said yes.

    About a week later, I got a notice from THUNDERBIRD COLLECTION AGENCY stating that I had not lived up to the arrangement (remember, it was to be $30 a month.) and that the balance in full was due withing 15 days or I would be reported to the CRAs. I immediately got on the phone to the collection agency, but guess what? The person who handled these "special accounts" was unavailable, so I called the hospital business office, fuming. I was told by a different woman that these accounts received "special handling" by the collection agency and as long as the payments were made there would be no problem. I told her that under no circumstances would I have agreed to do business with a collection agency had I know the truth, and had her put $300 on a credit card immediately, as the ins. co was supposed to pay the additional $150.

    THEN a week later TCS wrote me saying it was their understanding that I would send THEM the $300 that had already been paid to the hospital. I hit the roof, and wrote to the collection agency stating that I had already paid that amount, and I hoped never to hear from them again. I then wrote a long letter explaining this f@#$-up to the CEO of the hospital. I got a smarmy reply from the CFO, telling me that they had straightened everything out, and apologizing.

    Three weeks later, I found out the ins.would NOT pay the additional $150 so I sent a check to the hospital, and an email to the CFO asking why the hospital would not allow the discount in the amount of $150. I never received an answer. HOWEVER, while I was out of town last week, I received my check UNCASHED and a letter from TCS AND....ARE YOU READY FOR THIS???? THEY COPIED ALL THREE CRAS WITH THIS LETTER STATING. "THIS IS TO VERIFY THAT THE ABOVE REFERENCED ACCOUNT WAS PAID IN FULL TO TCS".

    SO NOW do I have a derog showing a paid collection at all three CRAs??? I was never late, paid the entire amount within 45 days, and my biggest fear was that this F@#$-up would hit the CRAs. The letter was dated July 13, so I don't know if it will show up if I get my credit report.

    What do I do if this does show as a paid collection?? Can I sue every-F$%ing-body involved????

    I simply can't believe this crap!!!!
  2. Terry

    Terry Well-Known Member

    I would. I would sue the hospital. Make sure you have all of your documentation!!!!! I hope you created a paper trail. Have them served, I pretty sure they will contact you to settle this problem. I would have the CFO served, whomever sent the email.
  3. bbauer

    bbauer Banned

    What would you sue them for?

    In otherwords, what grounds would you use to file your lawsuit?

    What would be the amount of actual damage and what would be the amount of punitive damages that you would sue for and how would you prove the actual damages?

    Let's look at that first.
  4. roni

    roni Well-Known Member

    If this just happened in June, is this even on your credit report yet? Do you know for sure that this will show as a collection on your report if it reaches it. Is it possible that It will be reported as a paid loan/finance and not as a derogatory item? I wonder if you are jumping the gun just a bit. I know for a fact that no one can report you as a collection unless you are 180 days late. And nothing can reach your credit report unless you are 30 days late past the due date and you have to have written notice of the debt. You should know that as well so why worry?
  5. breeze

    breeze Well-Known Member

    It sounds to me like the hospital, instead of having a billing department, has engaged a collection agency to handle their accounts receivable; the CA is just botching it up big time.

    It isn't illegal to have someone handle their receivables, but the CA could probably be considered in violation of the FDCPA fro threatening you and making false claims - that you were delinquent and they were going to report the debt as such to the CRA's.

    If, by some chance they do report it, then I would certainly threaten them with a lawsuit, and follow through, if necessary. If it ever goes that far, I would include the hospital, just to make sure they change their business practices.

    But like Roni said, I don't think they will report it at all, it is just their MO to assume everyone is a deadbeat and make threats in order to collect.

  6. bbauer

    bbauer Banned

    Well, I was at a legal conference all doay yesterday, and what I came away with was an opinion that what the best answer to some of these kinds of problems may very well lie in a lawsuit for libel.

    This may also be the way to go when bills are paid off and the collection agency or creditor wants to hit us with 7 more years of bad credit.marks.

    I'll just have to do some more research and ask some more people to find out for sure if that is a viable answer or not.

    Then to develop the product.

    Gotta have the "product" too because lawsuits are just like guns. If you keep pointing pistols at people, sooner or later you are going to end up having to shoot somebody.
  7. greyfox

    greyfox Well-Known Member


    I have two letters from the CA stating I have not paid, and demanding immediate payment, even tho they never set the debt up on a payment plan and the demand letters came within two weeks of the hospitals turning it over to them for "special handling".

    My concern is if it is reported by the CRAs as a PAID collection. The letter from the CA indicates a copy was sent to all three CRAs. My question is, will the CRA just accept this letter, report it as a paid collection, without having any report earlier of any collection activity?

    As to jumping the gun, my worry is that one of my present credit card grantors will pull an inquiry and raise my APR as a result of a derog on my credit report....THEN I would have to try and get that resolved, and from reading this board, that doesn't look too easy!

    The level of incompetence shown by both the hospital and the CA is just astounding to me!
  8. bbauer

    bbauer Banned

    Re: Roni

    Since they decided to take this loggerheaded approach to their perceived problem, I would teach them a new point of view.

    I would send the collection agency an immediate demand for validation. This would prevent them from reporting for at least 30 days.

    If they failed to validate or sent any further demands for payment absent demanded validation I would then immediately proceed with much sterner measures.

    The hopeful end result here would be to cause the collection agency to force the CA to either send the debt back to the creditor or pay the bill for you out of their own pocket and delete any derogatories they had placed against your credit.

    In the event that they caused you an "uppance" on one of your credit cards you would then have actual damages to report and sue for.

    It's a dangerous game they play if you do it right.

    How much would that extra interest cost you in terms of increased interest rates over say the next 20 years or more?

    Almost impossible to say, isn't it? $100,000? $200,000?? MOre?

    And then there is the other potential damages to future credit plus the possibility of punitive damages.

    Experience shows they don't want any part of such lawsuits and will gladly settle out of court.

    Libel may be your best approach. I'm looking into that idea right now to see if it would fly in a court of law.
  9. greyfox

    greyfox Well-Known Member

    Re: Roni

    Bill, the latest letter from the CA states the account is paid in full. This is the letter that shows a copy sent to the three CRAs. As far as I know, and I use Privista for EQ, nothing has hit the CRAs yet.

    That's what is worrisome, will this letter reporting the debt paid in full be treated by the CRAs as a paid collection account? And will they report it as such? I can't pull Experian or TU online, so am waiting for the Privista report on the 1st of August.
  10. bbauer

    bbauer Banned

    Re: Roni

    Yes, I understood that the account was paid in full.
    That makes the situation that much more libelous, does it not?

    Bill, the latest letter from the CA states the account is paid in full. This is the letter that shows a copy sent
    to the three CRAs. As far as I know, and I use Privista for EQ, nothing has hit the CRAs yet.

    That's what is worrisome, will this letter reporting the debt paid in full be treated by the CRAs as a paid collection account?

    Well, there is a 50-50 chance that they will, isn't that true? (LOL)

    And if they do, then they may have given you the grounds for and action in libel or other legal action. To allow them to get away with it is somewhat inexcuseable.

    I'd at least threaten the suit and see how the respond in the event that it is adversely reported. Anything on the credit report that carries the name of a collection agency is adverse regardless of how it is listed. They are like a skunk. Their stink remains no matter what
  11. greyfox

    greyfox Well-Known Member

    Re: Roni

    Exactly!! This is why I would never have agreed to the arrangement had the woman at the hospital business office not lied to me!
  12. bbauer

    bbauer Banned

    Re: Roni

    Yes, but you cannot prove the lie nor your reliance upon it.
    At least not easily.

    You can prove the libel.

    As I have stated, I am looking into the viability of that approach at the present time from legal sources. Attorneys qualified to answer the question. We shall see what happens.

    There has to be a way to fight these kinds of deals and the other equally odiferous situation wherein people pay their debts in good faith even though it may be through a collection agency and then have to live with the results of their errors in judgement for the next 7 years.

    These kinds of situations are outrageous, ludicrous and done in bad faith. There has to be a remedy,and I will find it if indeed any exist.
  13. roni

    roni Well-Known Member

    Re: Roni

    I really think you should not let this bother you at all. This collection agency is obviously using a PLay on words to get you all scared. If something does reach your credit report, you have a sound legal case against them. People talk about suing on this site all the time and really have no case. But in your case, if they do trash your credit, you should be happy because you can nail their asses. They are relying you consumers not knowing a damn thing and their bulling practices probably works 90% of the time. If fact from what you are saying they have violated your rights already and may want to get a free consultation from a lawyer. If not I definitely would report this to the FTC. Good luck.
  14. bbauer

    bbauer Banned

    Re: Roni


    If fact from what you are saying they have violated your rights already and may want to get a free consultation
    from a lawyer.

    That's most definitly what I would recommend. He may have some problems finding a good one that wants to take his case on a fee contingency basis, I don't know. But if he can't get one to take it on a fee contingency basis then he probably doesn't have a great case to begin with. If he has a good chance to win, it shold not be hard to get a good lawyer to take it.

    If not I definitely would report this to the FTC. Good luck.

    That's a good idea too, but as you know, he won't get a lot of bang for his buck that way. He ought to do it anyway because there is entirely too much of this junk going on.
  15. cable666

    cable666 Well-Known Member

    Re: Roni

    I would like to throw in a small observation about the behaviour of the hospital, the CA, and discussions about violations of the FDCPA.

    One of the requirements of the FDCPA is that the FTC is to issue a report to Congress every year about the state of the FDCPA and industry it regulates. The FTC posts this report on their web site. I highly recommend that you read it. It is very interesting and informative.

    In the 2000 report, the FTC reported a trend that they have observed that disturbs them greatly. They noticed that some businesses, especially medical clinics, have discovered a loophole that allows them to collect debts without having to comply with the FDCPA.

    The FDCPA only applies to collection agencies. It does not apply to the orginal creditors. What many clinics are doing is selling their accounts receivables after 30 days to "Finance Companies", who then claim that they purchase a non-delinquent debt and are now the original creditor. If the debtor does not pay this "finance company" promptly, they initiate collection efforts without having to comply with the FDCPA.

    It is the FTC's opinion that these "finance companies" are really CA's and should fall under the juristicion of the FDCPA. They asked congress to update the FDCPA to include any business who's primary business is collecting money.

    To me, it sounds like this case is exactly what happened. The clinic or hospital only waits days, not weeks, before turning the account over to the CA.

    Perhaps the hospitals collect only a fraction of the money billed after 30 days of no payment, so they figured they are better off selling the account after 30 days.

    No matter what, she should write to the FTC and complain. Perhaps the FTC will chose the use her case to illustrate to Congress the need for the ammendment to the FDCPA.

  16. bbauer

    bbauer Banned

    Re: Roni


    That ruse would let them out of the FDCPA, but what would put them right back in again is to refuse to pay the debt and then once you got a collection letter with the statement at the bottom required by law that says "This letter is sent to you in an attempt to collect a debt and any information obtained will be used for that purpose" then they would be right back in the FDCPA all over again.

    Would they not?
  17. cable666

    cable666 Well-Known Member

    Weasle out of FDCPA regs.

    No. The FDCPA still does not apply. The CA has classified themselves as the creditor by purchasing the account before it is considered delinquent by the hospital, usually between 15 and 60 days. The CA then bills for payment, and if not paid promptly, starts collection efforts without the restrictions of the FDCPA.

    The "This is an effort to collect a debt..." verbage does not mean they are under the FDCPA regulations. However, debts that fall under the FDCPA are required to have this verbage. So the best you can assume is that they might be.

    Like the FTC says in their report, this loophole is becoming a big problem.
  18. bbauer

    bbauer Banned

    Re: Weasle out of FDCPA regs.

    Well, everybody got some kinda hole, ain't they?
    Hidey-holes are nothing new, of course.
    But even those who think the have a smooth road ahead often suddenly encounter pot-holes they didn't know were there.

    There are a ton of laws out there and they can be very much like deep pot-holes in an otherwise smooth road in that no matter what you do, you are likely going to fall into one or the other of them.

    And quite often, even if they think they have all the bases covered, one of their employees will pull a boner and get them all bolixed up. Happens just about every day around here anymore. You would be amazed at all the pot-holes I can devise for them to fall into. Usually makes them think they just busted the whole darn front axle.

    To be more serious, there isn't any law that wasn't made to be broken, and I guess they figured out how to break the FDCPA.


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