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Lawsuit: Collection agency failed to verify debt

In our last blog post, we discussed some common ways debt collection agencies violate a consumer's rights in their pursuit of payments. They may threaten a person, lie about the debt owed or contact a person at times they know to be inconvenient.

However, there are many other ways that collection agents cross the line between being aggressive and engaging in unlawful conduct. Consumers have the option of taking legal action when and if this happens in order to protect themselves, their rights and their money. For instance, one man filed a lawsuit citing years of harassing collection efforts for a disputed debt for medical treatment. Recently, he learned he had won his case.

According to reports, the man had to go to the hospital for emergency care. Afterward, he received a bill from the group representing the emergency room doctors and assumed his insurance would cover the bill. Several months later, an agency bought all the medical debts from the group and began collection efforts from patients, including the man. 

That began years of back-and-forth between the man and the collection agency. The man said that he was disputing the debt based on a lack of information provided to his insurance company. He asked the collections agency to verify the debt, but they did not. They sent him a notice demanding payment, which should not have happened because these types of correspondences are supposed to stop until a debt can be verified.

The man filed a lawsuit and an appeals court recently ruled that the collection agency did in fact fail to comply with federal collections procedures. The man was awarded $1,000 and the collections agency was also ordered to pay his legal fees and other costs.

While this case took about four years to resolve, it is still a good example of why it can be so crucial to fight back against unlawful debt collection practices. Through his lawsuit, the man was able to hold the agency accountable and avoid having to pay off a debt he did not owe.

If you are in a similar situation, it can be crucial to discuss your options to protect yourself and your rights with an attorney familiar with bankruptcy laws.

Source: Chicago Tribune, "Evanston man wins medical debt claim against collection agency," John Russell, Nov. 23, 2015

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