On April 13, the Washington Attorney General’s office announced that a debt collection agency agreed to a consent decree resolving allegations that it failed to provide required disclosures in medical debt collection notices, in violation of the Washington Collection Agency Act and the Washington Consumer Protection Act. The settlement, filed in King County Superior Court, requires the company to provide $1.5 million in medical debt relief and to change its collection practices going forward.
According to the allegations, consumers were not told that they could request, free of charge, the original account number, the date of the last payment, and an itemized statement showing the creditor, the dates of service, the services provided, the principal amount of the debt, bill adjustments, payments, interest, fees, and whether charity care or other reductions had been applied.
Under the consent decree, the agency must include the required disclosure language in future medical debt collection notices, provide at least $1.5 million in debt relief to affected consumers, and stop collecting interest, fees, and other charges above principal on the medical debt at issue. The decree also requires the agency to pay $1 million to the state.
Putting It Into Practice: State debt collection practices have remained an active area of enforcement and litigation in recent months (previously discussed here and here). This settlement reflects continued scrutiny of how collectors communicate with consumers and whether required disclosures are provided at the outset of collection activity. Companies should continue monitoring state developments and update compliance practices as necessary.