Sunday, April 14, 2013

How to Write Follow Up Letters For A Medical Collector's Validation Response

On my last post, I had already written so much that I thought it would be good to address the follow up letters you need to send when you get a supposed validation response for a medical collection in another blog post. Collectors, whether standard alleged debts or medical, have to comply with the FDCPA and also the laws that many states have that mirror the FDCPA.  But, medical collectors also have to comply with HIPAA. That is the Health Information Portability and Accountability Act.

First of all, when you demand validation from a collector for an alleged medical debt, you really should be altering your letter a bit.  Medical providers have to comply with very strict HIPAA regulations. HIPAA governs the privacy of medical information. Failure to comply with, or committing violations of HIPAA, come with stiff penalties and even jail time.  This set of laws isn't playing around.  When you demand validation for medical collections, you need to use HIPAA to your advantage.

Medical collections are most of the time actions of 3rd party collectors.  It is very uncommon to have collections from the actual medical provider.  They are in the business of medical stuff, not collections. They have billing and accounts receivable departments, but they usually turn accounts that are not paid for in 30 - 90 days over to a collection company immediately after that time has passed.  That is wonderful for you. 

I'm not saying you shouldn't be taking care of your medical bills, but really, who has that kind of money laying around?  If you don't have insurance or you do but they are slow to take care of their part, it affects your credit, and they don't give you time to make payment arrangements usually. No, they let the 3rd party collection companies do that.  Well, you know how I feel about 3rd party collectors - you don't owe them a dime!

I hate 3rd party collectors, and the 3rd party medical collectors really turn my stomach.  Here's why.  I'm in real estate. You have a property that you listed or you have a buyer that finally got his offer accepted and you're on the final stretch in escrow.  The buyer has been approved for a loan, credit is fine, no collections that have to be paid, then...out of nowhere, on the final credit pull by the lender prior to funding...OH CRAP!!!! There's a brand new medical collection that is super old, reporting on the credit report and its screwing up the score and it has to be paid and removed or this deal goes south!

YES, THAT'S WHAT THESE BLOOD SUCKERS DO!  They monitor or ping, or somehow find out someone is buying a house and they know that people will pay even old, time barred debts so that they can finally buy their house. These 3rd party collectors are unscrupulous, low life, law breaking, scum of the earth pricks that will do ANYTHING for money!  Okay, you get the idea, I really can't stand them!

Let's take a look at the types of responses you may get from medical collectors. The first one, and the main one I like, is the letter that straight out says they are discontinuing collection efforts and sending it back to the original creditor.  That is such a beautiful thing to see.  Sometimes they will even state in the letter that they are removing all entries of it from your credit reports.  You will still need to send a dispute letter to the bureaus to make sure that they take it off.  If it doesn't come off, send another dispute to the bureaus with a copy of the letter that the collector sent you stating that they are removing it. That should definitely make it go away.

The next type of response is very similar to other types of collections.  They say they have investigated and they are reporting correctly.  That is NOT validation!  That is HEARSAY! Sometimes when they address their response, they call it your request for "Verification."  You did NOT ask them for Verification, you asked them for Validation.  Validation is forwarding copies of the actual proof of the alleged debt and alleged account.  Verification is being willing to testify under oath that they have the documents on hand, know everything that has ever transpired on the alleged account, and testifying that everything that is reported is 100% accurate.  Your follow up letter tells them what I just said.  Hold them to it, call them on it (in writing, not on the phone), and never acknowledge the alleged debt or alleged account.  It is their job to prove it.

The next type of response is also very similar to other types of collections. They may respond just like the previous example, but they include a printed statement from the original creditor. Sometimes it will be a copy of your signature agreeing to be responsible.  Sometimes you can tell that they copy/pasted the signature.  That is still not validation.  That is a paper saying that you agree to be responsible for the services, but it is not a contract between you and them.  Where is that?  Where is the full accounting?  Where is the contract showing that they have been given the right to collect on the alleged debt from the original creditor?  They don't send those because they don't have it.  And if they give the full accounting, well, you've got them on HIPAA violations really strongly.

The next type of response is my second favorite response.  It is the one where they send a full accounting from the medical provider.  It has medical procedures, medications, supplies, you name it.  It has HIPAA violation written all over it! You see, that is your information that is supposed to be very private. They are never supposed to come in contact with that kind of paperwork.  This is the one where your response letter really gets to go after them and ream them good. Here's some of the stuff I tell them when I see those:

  • They committed a Level 3 HIPAA violation that comes with not just financial penalties but can also get them up to 10 years of jail time.  A Level 3 HIPAA violation is "an offense committed with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, gain or malicious harm.
  • They are in violation of Subtitle D of ARRA Sec. 13401 (Application of Security Provisions and Penalties to Business Associates of Covered Entities) 
  • They are in violation of Subtitle D of ARRA Section 13407(1) - (Breach of Security).
  • The last 2 can hold them liable for penalties under the HITECH Act.
  • They will be in clear violation of HIPAA (..."no permissible business purpose in divulging protected health information to anyone on an account") should they ever inquire, report, update or verify anything on the credit report

ARRA is the American Recovery and Reinvestment Act which gave stimulus monies to the health care industries for IT resources. HITECH is Health Information Technology for Economic and Clinical Health. HITECH is Title XIII of ARRA. They have a lot to do with health and medical information being maintained and communicated through technological means. Think - filing and maintaining these very sensitive files online or on computers.  

Now, another thing I look for in their responses, is if they have dates of the original bills or services.  Many times, you will find that they are outside the Statute of Limitations for your state.  You can hit them with that as well.

One thing I ALWAYS include in my responses to the 3rd party medical collector, is the fact that since they are 3rd party, they have no rights to collect anything from the alleged debtor since there is no way they can prove they were on any original contract.  I always hit them with 73 AmJur, 2nd, Section 90.  They have no right to "subrogate" (substitute) themselves into a contract, whether it is by purchase, assignment, transfer, or trade. If they "bought" the debt, they did it on their own behalf, not at the request of any alleged debtor, and therefore are a "stranger to the transaction" (voluntary payee).

One of the final things I put in the letters to these vultures that clearly violate HIPAA, is that if they refuse to delete all information they furnished to any and all credit bureaus, and they do not destroy any information about any alleged account they claim to have with me, to prevent them from pursuing any more collection activity against me, and that should they sell, assign, transfer or trade the alleged account to some other entity to attempt collection, I will file a formal complaint to the DHHS OCR against them. (Department of Health and Human Services, Office of Civil Rights).

I like to hit them hard, throw the law at them and give a call to action - to get rid of it, get it off the credit report and never pull this with me again or allow some other 3rd party scumbag to attempt to mess with me either.  You can do the same.  Use the laws you find to go after them. Put the laws in their face. Its a game.  Defense is always important, but its your offense that wins the game!  Be strong. Be knowledgeable. Don't be intimidated! 

I love credit repair. I love writing. I love helping people. I love winning!  If you don't love writing, don't like research, don't look forward to repairing your credit on your own, but you want to fight, you want a chance to win the credit repair game, please call or email me.  My contact info is up at the top on the right side. I would like to help you!

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30 comments:

  1. I've paid the vultures. They have my account listed as a $0 balance but have left the status as "open". Is it too late to do anything with it now that ivepaid it?

    ReplyDelete
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    1. You can dispute with the bureaus as not having any open account with that company and no contract with them at all.

      Then you can send a letter directly to the company and tell them that you are demanding that they cease & desist all communication with you and all collection activity with you since they have no contract with you and no consent in writing to make any communication on your credit reports, as consent is required and in writing under FCRA 603(o)(5)(A)(iii).

      Hopefully they will obey the law and remove it from your reports.

      Delete
  2. I have a situation I'd like advice on. Medical bill I was paying was sent to 3rd party. I don't even mind paying (as i was when they impatiently sold it off)....my concern is my credit. I don't want it on there as it's otherwise great! Some sites advise against validation letters on valid debt but since its medical it seems like it might help?

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  3. Hi JLyons,

    I DO advise validation letters on allegedly valid debt. You've reached out to someone that does not consider ANY 3rd party collection account a valid debt. They have no contract with you and you've never agreed to do business with them. They need to prove their claim.

    The tricky part about your situation is that a lot of medical debt ends up on your credit report without them first notifying you of their alleged claim. They are required under the FDCPA to give you a "Dunning Notice" within 5 days of initiating collection actions, and furnishing to a credit report is indeed collection activity.

    It sounds like it is not yet on your report. If you have received a Dunning letter from them, you need to respond immediately and dispute the alleged account/debt and demand validation. If you have not received that letter, you need to find out who this company is, find out if it was sold to them or assigned to them, and send them a validation letter. It is the best chance you have of keeping it off your credit reports.

    I would make the letter so strong and intimidating that they have no desire to mess with you. I would also include language that insinuates that you will be looking for anything that violates HIPAA and will be reporting both them and their "Client" or the OC for HIPAA violations and remind them that could come with both monetary penalties and jail time.

    So yes, validate away. It is ALWAYS a good defense and there is no such thing as a valid debt to any collection company. Also, there's obviously no debt with the OC now if they sold it.

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  4. Hi Shannon, great posts. Very informative. Great job. Can you ask for validation if an EMS bill was sent to the Department of Revenue for collections? I didnt receive notification of the bill.

    ReplyDelete
    Replies
    1. Yes Tee, you can ask for validation and you can ask that they prove the claim. Tell them you need to see a contract between their company and you establishing some sort of obligation for this alleged account that you have no idea where it came from and you have never received a bill. Finding it on your credit report was a surprise and they need to prove you are contractually liable to them.

      Delete
    2. Shannon what about a apartment complex debt? Could that be removed? As well as student loan late payments from years ago and the account is in good standing.

      Delete
    3. Everything has the ability to be removed. Some things get very stubborn though. Many times rental accounts are handled by 3rd party collectors. Handle them as such. Always demand validation.

      I would leave the student loan lates alone. Not worth the time and effort in most cases. When they're old, they really don't affect your scores anymore.

      Delete
  5. Can you provide a sample letter for reference

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    Replies
    1. No. Read the blog. Tons of information about what to put in a validation letter. If you want personalized help with your credit, I do this professionally and can write letters for you if you are a client.

      Delete
  6. Hi Shannon. How do I get in contact with you to discuss utilizing your services?

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    Replies
    1. Hi Jessica,

      You can call me at 951-801-2828 or email me at futurefico@gmail dot com.

      Thanks for asking. This information should also be seen on the top right hand side of my blog.

      Delete
  7. I am mentally drained! I refuse to give up but it's so hard!! I just don't know where to start. Do i send a letter after i disputed the collector and they later send me my signed documents?? Should i type the letter, write it out in blue ink or dispute it again?

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    1. Hi Lady,

      You use the word "collector" so when I see that they are attempting to claim validation because they sent a signed contract I immediately think, a contract between you and whom? To me, its not validation because they didn't send you a contract between you and them, they sent something between you and some other company.

      In order to validate they need to send proof of assignment or purchase, a full chain of assignment, and definitely a contract showing you agreed to do business with them specifically.

      Where to start, if you've already demanded validation, reject what they sent you for the reason named above and do it in a letter sent certified mail. Type it up. Never send your own handwriting to a collection agency. Your signature might end up on something you never really signed.

      Delete
  8. Thank you but how do i reject what they sent me? Do i send them a typed up hippa letter? Or a 609? Or how do i respond?

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    1. You send them another letter telling them that you received their correspondence and although they tried, what they sent didn't validate or prove you have any obligation to them and you are rejecting it as proof of validation.

      Then you go on to say that you demanded validation and proof that you had contracted to do business with them specifically. They didn't provide it and you're not interested in paying a bill you don't owe to someone you don't know, don't have a contract with, hasn't provided services or money or credit to you, and was never on any original contract you've had with any company and they don't have the legal right to substitute themselves onto an alleged contract without your request for them to do so.

      Then include the demand for validation again, tell them to get off the credit reports until they provide you with a valid contract between them specifically and you, signed by both their authorized rep and you. This is what the FDCPA says they must do until they prove their alleged claim.

      Delete
    2. Thank you so so much for your responses.. i really do appreciate the time you take out to help others. one more thing is it better to personally write it out on a piece of paper or type it up and print it out?

      Delete
    3. I personally would never put anything in my own handwriting to a collection agency. Definitely not a signature. Its much easier to save a copy to your computer that you have typed up and printed. You always want to keep copies of all correspondence.

      Delete
  9. If you have closed accounts on one of your credit reports what do you do? If a credit bureau ask for proof of your id and sscard for verification what do you send with that info?

    ReplyDelete
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    1. It depends. Closed and $0 balance - leave it alone. Closed,derogatory and a balance, dispute it.

      If you feel like sending them copies of your id and ss, then go ahead. Or tell them you've already submitted them and not doing it again since they are not a government agency and they should have them in their files.

      Delete
  10. Im sorry i didn't explain that well

    ok i called a credit bureau to update my personal info because they had my name spelled incorrectly and old addresses.

    they told me in order for them to update my info they need a copy of my SSCard and ID.

    I was asking what do i send them with that info their asking for a dispute letter or just write why im sending these items?

    I also looked at one on my credit reports and it shows closed accounts derogatory and chargeoffs.
    Do i just dispute this with a 609 letter?

    ReplyDelete
    Replies
    1. How To Write Bureau Dispute Letters - Part 1 My blog post from Dec. 19, 2015.

      I HATE THE 609 LETTER!! But go ahead and believe the lie that this section of the FCRA is going to solve all the problems on the credit reports. Of course, you'll need to send 1st letter, 2nd letter, 3rd letter, 4th letter, month after month till you finally give up and realize that bureaus have seen the magical "609 letters" 400 billion times and don't bother to comply with section 609.

      If the derogatory accounts have balances, then dispute them and follow up with direct to creditor/collector letters demanding that they send you all of the documentation proving that their claim of verification is accurate. Be specific about what you disagree with and be specific about the documentation they need to send you. If you don't know what to request or demand that they send you, look through past articles on the blog. I'm pretty sure I've covered it.

      If you can't figure out what to write or are just tired of going it on your own, I'd be more than happy to assist you professionally as one of our clients.

      Delete
  11. I hope this reaches you as I need help asap!
    I disputed a medical collection with Equifax and it was deleted from my credit report with all bureaus as 3rd party collection agency was unable to validate. About 3 weeks later I received a dunning letter from a different collection agency who I assume purchased the debt from the previous collection agency who could not validate. I sent a debt validation letter to the new c. agency and received a letter with a hospital bill enclosed. The bill has dos, cpt/procedure codes, etc. Is this violation of HIPPA? What can i do now? I still do not have any knowledge of this debt as I never received a bill from the hospital. Am I to send another letter? What should it include?

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    1. Hello and to answer whether or not their response was a HIPAA violation - YES. The only one who can send you the itemized bill disclosing your private and protected health information is the medical facility. You would have had to give the medical facility authorization to release your medical information to the specific collection company.

      You need to respond to the collection company and tell them that what they sent didn't validate their claim because nothing they sent showed your agreement to do business with them and because they sent private, protected health information belonging to someone, unless they have a signed authorization to release that information to them, they and the medical facility have violated HIPAA.

      Sending a bill is NOT validation. It is part of what is needed but the first and foremost item they must have is a contract between their company specifically and you, signed by both parties. They have not lent you anything nor provided any services to you and have never been requested by you to do either, nor have they been requested by you to take over the alleged account on your behalf.

      They are missing the important contract and without that, there is no validation or proof that you owe them anything. Make sure you respond to them and don't back down. They are making the accusation, they bear the burden of proof.

      Delete
  12. Hi, I'm in the process of doing exactly what you have said to do, I just received the first response from collection agency and it had a detailed bill of medical procedures. I did request validation in the form of proof of services as I never was in a contract with said collections agency.
    I have heard if I ask for a detailed bill of services I am actually giving them permission to have my personal medical information which would make them not in violation of Hippa is this true? I hope not.

    Thanks in advance!!

    ReplyDelete
    Replies
    1. Hi Rick,

      I haven't heard that before but I can imagine people trying to claim that. However, according to HIPAA, they have to have your express written consent authorizing them access to your private health information.

      When I write letters for medical collections. I call out that I absolutely forbid them access to any health or medical information about me or any family members and I absolutely do not authorize the medical facility to share my private and protected health information with them or anyone. I warn them that they are required to provide an itemized full accounting but if I see one medical term on anything they send to me, I will report them and their client or original medical facility for HIPAA violations and hope all their butts go to jail along with being fined, as the federal Act permits.

      Warning them right up front, and I put it in bold font, helps to get rid of these blood suckers most of the time.

      Delete
  13. I have been disputing the one and only medical collection on my credit reports. I managed to get TU and EX to delete with one dispute. However, EQUIFAX is being the devil. They refuse to delete. I have disputed directly with the collection agency and they never responded.

    So, I filed a complaint with the BBB. They responded within 24 hours (lol). They sent me a handwritten (looked like chicken scratch) ledger and 2 statements they claimed they sent me in the mail (that I never received). On the second statement they stated the provider gave them permission to report to the CRAs. However, they are reporting under the collection agency and not the provider. So, why would they need permission from the provider? It makes no sense to me. Also, the provider had my street type wrong on his files (like my address is 123 love COURT, he had LANE). I'm guessing that's why I never received anything from him. The collection agency had my correct address on their statements that they sent me through the BBB but as I stated I never received anything from them in the mail. They still refused to delete after the BBB complaint.

    So, I filed a complaint with CFPB (thinking that would get me somewhere and it DID NOT). I told them they were in violation of HIPPA for having information that stated I had surgery and that I did not have a contract/business relationship with them. They responded with "no HIPAA violation has occurred; the Department of Health and Human Services has explained that [d]ebt collection is recognized as a payment activity with the payment definition of the Privacy Rule as codified in 45 C.F.R. § 164.501, specifically part (2)(iii) of the definition."

    They are really getting on my nerves. Plus, they are adding interest. I'm sorry I refuse to pay interest on a medical bill that I did not receive. I have had insurance for last 10+ years and I have been up to date paying my medical providers. Do you have any advice on how to get rid of this medical collection?

    ReplyDelete
  14. I just wrote this long comment and I don't think it even went through (ugh!). So, here's the shortened version:

    I have one medical collection on my Equifax report that I can't seem to get deleted. I got it deleted off of TU & EX with no problems. I filed multiple disputes with Equifax and direct disputes with the collection agency. I never received anything to this date from the collection agency in the mail.

    So, I filed a BBB complaint and they responded within 24 hrs (lol, funny how that works!). They included 2 statements they claimed they sent to me in the mail and a chicken scratch handwritten ledger. They refused to delete and BBB closed the complaint as resolved even though I responded and said I DID NOT accept their response. Also, on the 2nd statement they sent through the BBB it said that the provider gave them permission to report to the CRAs. However, it is reporting under the collection agency and not actual provider so why would they need the provider's permission??? Anywho...

    So, then I filed a complaint with the CFPB (thinking that would get me somewhere and it DID NOT smh). In this complaint I added that I did not have a contract or business relationship with them and that HIPPA had been violated because the ledger had that I had surgery. They responded back with "no HIPAA violation has occurred; the Department of Health and Human Services has explained that [d]ebt collection is recognized as a payment activity with the payment definition of the Privacy Rule as codified in 45 C.F.R. § 164.501, specifically part (2)(iii) of the definition." And they continue to refuse to delete.

    They are getting on my last nerve. And to top it off, they are adding interest to the medical collection every month. And I'm sorry but I refuse to pay interest on a medical collection. Especially since the provider had my address street type wrong on his ledger (for instance I live @ 123 Court, but he had 123 LANE). I'm guessing that's why I never received anything from him in the mail and I just think the collection agency didn't send anything because they had my correct address on the their statements. Also I thought they are supposed to report what the provider reports, so how are you going to report my correct address, when you have provided me proof that they the provider gave you a different address.

    Do you have any suggestions on how to get rid of them!?

    ReplyDelete
    Replies
    1. HI Caroline,

      I can think of 3 medical collection companies off the top of my head the inflict interest month after month and don't validate properly and continue to violate the FDCPA, and claim that they are not violating HIPAA. I feel your pain!

      They are violating HIPAA. Yes they can try to collect but unless you have specifically given authorization to share your medical information with them, they are NOT ALLOWED to know anything about your private and protected health records. Only billing and payment information, which makes it very difficult for them to provide a full accounting without violating HIPAA. The full accounting MUST come from the OC and not them to avoid that violation.

      CFPB is now useless, as you have found out. You can threaten to sue this company but unless you actually sue them, I seriously doubt they will go away or remove their lies from your credit reports.

      Have you responded to their response? You definitely need to do that and you need to call them out for not validating. Chicken scratch is not validation. A CONTRACT between you and them is REQUIRED. A full accounting is required. Proof of a valid assignment or proof of purchase is required in order to show they have any rights to furnish crap on your credit reports (which I don't believe they really ever have the right - but that's my opinion based on facts and contract law).

      Oh, since they say the provider gave them permission to furnish info on your credit reports, where's that proof? They're pulling that out of their orifice.

      Try looking them up to see if they are licensed and bonded to do business in your state, if your state requires it. Look them up to see if they have a business license in your state. Check and see if there are any complaints made against them/their license/bond. Check to see if they are their parent company (if they have one) have any CFPB consent orders against them. File a complaint against them with your AG, and their state AG if they are in a different state. File a complaint against their bond. File a complaint against them with their registered agent. Put complaints about them with any agency that might have some influence over them. You can even file a complaint against them with the ACA which is an organization for collection companies similar to the AMA for the medical field.

      Keep fighting back. It's your best chance to get them removed. Credit repair is much more difficult these days. These creditors, collectors, and bureaus, as well as their so called regulatory agencies really don't seem to care if anyone other than the consumer or credit repair company follows the law. They violate all the time and get away with it. Very frustrating. I wish you extra good luck and success.

      Delete

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