Collector - February 2020 - 47

IAP

In Klein, an ACA International member
collection agency attempted to collect a
debt incurred by a consumer and owed to
a hospital facility. The consumer claimed
that the collection letters she received
violated the FDCPA because they did not
include a conspicuous written notice of
the hospital facility's/creditor's financial
assistance policy (FAP) pursuant to federal
tax regulations. In addition, the consumer
argued the firm attempted to collect a debt
from her on behalf of its creditor-medical
facility client allegedly without a written
contract-in violation of an agreement
between the medical facility and the
Minnesota attorney general.
"The claims alleged in this lawsuit
were going beyond the boundaries of the
FDCPA and laws related to medical debts,"

said Xerxes Martin, a partner with the
law firm Malone Frost Martin, PLLC, who
represented the debt collector. The district
court agreed.
"We are very happy the court found the
correct result and it will hopefully prevent
similar baseless allegations down the road,"
Martin said.
The district court found in favor of the
collection agency on all counts against it.
Importantly, the court found that 501(r)
federal tax regulations require "hospital
facilities," not collection agencies, to widely
publicize their FAPs, including providing a
conspicuous, written notice of the FAP in
billing statements.
The court observed that the consumer
could point to no persuasive authority
in support of her argument that the

defendants, as debt collectors, must include
FAP language in their letters under the
501(r) regulations. The court also opined
that even if the creditor hospital facility
had an internal policy that required it to
include a conspicuous notice of its financial
assistance policy on billing statements it
sends to consumers, that did not in turn
extend to unsuspecting collection agencies.
"This case was yet another attempt by
the plaintiffs' bar to fashion disclosure
requirements out of whole cloth.
Fortunately-with the help of great
litigation counsel and the support of
ACA-we were able to convince the
court that 501(r) does not apply to debt
collectors merely because they operate in
the health care space," said Chris Meier,
general counsel and chief compliance
officer at The CMI Group, the parent
company of the defendants.
ACA is delighted by the court's decision
in this case and is proud to have supported
its members in defending against the
allegations in this case by providing
Industry Advancement Program funds to
help defray the cost of litigation. ACA is
likewise proud of the effort put forth by its
members in this lawsuit. Because of their
vigorous defense, the accounts receivable
management industry has sent a message
that there is no appetite for regulation
through enforcement where there is no
clear evidence of a prohibited practice that
would violate the law.
ACA's efforts to proactively support
the accounts receivable management
industry are part of the association's
Industry Advancement Program and
are made possible by funding through
ACA's Industry Advancement Fund. ACA
members interested in reading more
about the most recent significant judicial
decisions involving the accounts receivable
management industry can always find
concise case summaries at acainternational.
org/industry-advancement-program.
Kari Barber is ACA International's former
corporate counsel. Andrew Pavlik is ACA
International's compliance analyst.

COLLECTOR 02.20

47


http://www.acainternational.org/industry-advancement-program http://www.acainternational.org/industry-advancement-program http://www.webrecon.com

Collector - February 2020

Table of Contents for the Digital Edition of Collector - February 2020

Presidents Page
Industry News
Best Practices
FYI
Collection Tips
Overlapping Responsibilities?
Taking on Tax Time
Making Connections in D.C.
Calendar
Honor Roll
Education Spotlight
Creative Solutions
Ask the Experts: Reaching Out
Legal Liability & the FDCPA
Advocacy and Parenthood: Not So Different
Your Opinion Matters
Beyond the Boundary of the Law
ACA SearchPoint
Membership
Ad Index
Last Word
Collector - February 2020 - Cover1
Collector - February 2020 - Cover2
Collector - February 2020 - 1
Collector - February 2020 - 2
Collector - February 2020 - 3
Collector - February 2020 - 4
Collector - February 2020 - Presidents Page
Collector - February 2020 - Industry News
Collector - February 2020 - 7
Collector - February 2020 - 8
Collector - February 2020 - 9
Collector - February 2020 - 10
Collector - February 2020 - 11
Collector - February 2020 - Best Practices
Collector - February 2020 - 13
Collector - February 2020 - FYI
Collector - February 2020 - 15
Collector - February 2020 - Collection Tips
Collector - February 2020 - 17
Collector - February 2020 - Overlapping Responsibilities?
Collector - February 2020 - 19
Collector - February 2020 - 20
Collector - February 2020 - 21
Collector - February 2020 - Taking on Tax Time
Collector - February 2020 - 23
Collector - February 2020 - 24
Collector - February 2020 - 25
Collector - February 2020 - Making Connections in D.C.
Collector - February 2020 - 27
Collector - February 2020 - 28
Collector - February 2020 - 29
Collector - February 2020 - 30
Collector - February 2020 - 31
Collector - February 2020 - Calendar
Collector - February 2020 - Honor Roll
Collector - February 2020 - Education Spotlight
Collector - February 2020 - 35
Collector - February 2020 - Creative Solutions
Collector - February 2020 - 37
Collector - February 2020 - Ask the Experts: Reaching Out
Collector - February 2020 - 39
Collector - February 2020 - Legal Liability & the FDCPA
Collector - February 2020 - 41
Collector - February 2020 - Advocacy and Parenthood: Not So Different
Collector - February 2020 - 43
Collector - February 2020 - Your Opinion Matters
Collector - February 2020 - 45
Collector - February 2020 - Beyond the Boundary of the Law
Collector - February 2020 - 47
Collector - February 2020 - ACA SearchPoint
Collector - February 2020 - 49
Collector - February 2020 - Membership
Collector - February 2020 - Ad Index
Collector - February 2020 - Last Word
Collector - February 2020 - Cover3
Collector - February 2020 - Cover4
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