The bill, titled the End Debt Collector Abuse Act of 2012 (S 3350), is an update and expansion of earlier legislation Senator Franken proposed along with Senator George LeMieux of Florida in 2010. Like its predecessor, Franken's current bill would amend the Fair Debt Collection Practices Act to provide further protections for consumers against abusive or deceptive collection tactics sometimes employed by creditors and their agents.
But with this bill, Franken also
hopes to establish special protections for medical patients who are suffering
collection abuses when seeking care at hospitals and emergency rooms. Franken
announced his new bill at the conclusion of Senate hearings which explored debt
collection and health privacy practices of Chicago-based Accretive Health Inc.
and Fairview Health Services in Minnesota.
Standing Up For Patients
According to Franken, a member of
the Senate Health committee, too many patients are being harassed for payment
of medical bills when they are in a weakened, vulnerable state seeking urgent
medical services. Franken's updated End Debt Collector Abuse Act calls for
recognizing the "special nature" of medical debt and clarifying its
status under the FDCPA. As outlined in a bill summary available on Franken's
website, the bill would establish that:
1. Hospitals and their collection
agents are subject to FDCPA restrictions against abusive or deceptive
practices, regardless of whether the debt in question is in default
2. Collectors are prohibited from
approaching patients in hospital emergency rooms, labor and delivery
departments, and intensive care units
3. Hospitals are prohibited from
withholding, delaying or threatening to withhold emergency medical services
until a debt is paid
4. Collectors are required to inform
patients about any financial assistance programs such as hospital charity care
initiatives or Medicaid which might help pay their medical bills
Reinforcing the Federal Debt Collection
Practices Act
The bill goes on to restate the
central provisions of Franken and LeMieux's 2010 End Debt Collector Abuse Act.
Chief among these is an outright prohibition against creditors seeking arrest
warrants in order to compel consumers to pay off debts. While this practice is
not widely known or discussed outside of legal circles, debtors can be arrested
and jailed in some states for refusing to comply with court orders to repay
debt or for failing to attend certain debt-related court proceedings. Franken
points out that this practice flouts our nation's abolishment of debtors'
prisons, and furthermore exploits public law enforcement and court resources
for the benefit of private creditors.
Notably, Franken does not propose to
restrict courts from issuing arrest warrants in cases where a judge decides on
this course of action. Rather, Franken wants to ensure that courts - and not
creditors or their collection agents - will make such decisions.
Besides prohibiting debt collectors
from issuing arrest warrants, Franken's End Debt Collector Abuse Act proposes
amendments to the Federal Debt Collection Practices Act which would require
collectors to provide additional information to consumers regarding their debt
and their rights under the law. Specifically, the new bill would require that
collectors provide:
1. The original creditor's name and
address - which can be unclear in situations where debts are bought and sold
several times by collection agencies before any collections are made
2. A full itemization of the
principal, interest and fees which comprise the total debt so that consumers
can understand what a collector is alleging, and dispute it point by point if
necessary
3. Instructions and contact
information for filing a complaint or dispute with the collector's organization
4. Thorough investigations in cases
where consumers dispute a debt, as well as verification specific to the
disputed issue
Finally, Franken's bill calls for
raising statutory damage limits set forth in the FDCPA and tying them to the
Consumer Price Index to adjust for inflation, noting that these limits have not
changed since the law's enactment almost 35 years ago in 1977. Franken feels
that raising these damage limits will more effectively punish bad actors in the
debt collection business and encourage all debt collectors to reexamine their
practices to help promote compliance.
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