Trending Debt Collection Topics – 5/29/15

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The month of May is almost over, and June is right around the corner. Before you can enjoy the full swing of summer, it’s time to catch up on the trending topics dominating the debt collection industry. Sweeping regulation changes and litigation are taking up all the headlines, but there are some outlying stories worth educating yourself on so you know how to confront them if and when you face them. Read on below to learn more about the trending topics in debt collection.

Debt Collector Agrees to Close, Write Off $3M in Debt

An Atlanta-area debt collector has agreed to a deal with the Governor’s Office of Consumer Protection to shut down his company, pay $15,000 in penalties, and cease efforts to collect on over $3.1 million in purported debt. Earnest Earvin IV is the owner of Zenith Financial Group, and has agreed to exit the debt collection business completely, and remain out of the industry for five years. Should he violate the terms of his agreement, he will immediately be subject to an additional $445,000 penalty. Zenith Financial is accused of violating the Georgia Fair Business Practices Act by, among other things, threatening action against consumers it had no power to enforce (arrest and imprisonment).

Tacoma-area Nonprofit Medical Firm Accused of Liens and Aggressive Debt Collection

Medical bills are one of the most common sources of debt in America. If it isn’t bad enough being chronically ill or requiring surgery you can’t afford, now Tacoma, Washington-based MultiCare, a nonprofit medical agency, is accused of using liens and aggressive debt collection practices to recover payments stemming from accident-related injuries. Washington Community Action Network released a report this week detailing MultiCare’s many abuses, including the filing of 6,508 liens between 2010 and 2014, a rate that is four times higher than all other are health systems combined.

Mason City Man Sues Debt Collectors over Robocalls

Jerry Thomas has had enough. The Mason City, Iowa resident has filed a federal lawsuit seeking $105,000 in damages from debt collectors he accuses of “repeatedly and wrongfully” harassing him with robocalls. How bad was the situation? Thomas says he was on the receiving end of at least 205 automated phone messages from CBE Group based out of Cedar Falls. The third-party debt collector logged the calls between November 2013 and June 2014.

Consumer Litigation is on the Upswing in 2015

For those who caught last week’s trending topics post, this headline may come as no surprise. A report from WebRecon shows that consumer litigation under the Fair Debt Collection Practices Act (FDCPA) is off to a strong start in 2015. The report cited a 12.5% increase over the same period last year, but that rates are lagging behind the pace of 2013.*

CFPB Quietly Extends Debt Collection Rulemaking

As you were busy purchasing propane, charcoal, paper plates, and enough grilled meat to feed a platoon, the Consumer Financial Protection Bureau (CFPB) published an update to its Spring Rulemaking Agenda. The update included yet another extension for the end of the Prerule Activities for Debt Collection. The extension now runs through December of this year.

Debt Collectors Going After 5-Year-Old

The scariest story of the week is saved for last. A parent shared her story of receiving debt collection notices in the name of her 5-year-old son regarding hospital debts. The story itself isn’t necessarily what’s scary here. As notes, it is legal for debt collectors to pursue parents on behalf of a minor’s medical bills because, by law, a minor cannot enter into a contract.

The major takeaway here is that parents need to be aware of financial obligations as it relates to children. In this post, the woman was certain her son’s medical insurance covered all his procedures. It’s important to verify that, otherwise unpaid debts will be sent by medical facilities to debt collectors.

Brent Vullings