Al Franken’s New Bid to Strengthen FDCPA, Protect Patient Rights

Senator Al Franken of Minnesota recently introduced legislation before Congress which would strengthen consumer protections against abusive debt collection tactics provided in the Fair Debt Collection Practices Act (FDCPA) of 1977.

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:

• 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
• Collectors are prohibited from approaching patients in hospital emergency rooms, labor and delivery departments, and intensive care units
• Hospitals are prohibited from withholding, delaying or threatening to withhold emergency medical services until a debt is paid
• 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 jailedin 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:

• 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
• 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
• Instructions and contact information for filing a complaint or dispute with the collector’s organization
• 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.

Will the End Debt Collector Abuse Act Pass?

Given the current state of Congress, it’s difficult to envision Franken’s new bill passing into law. While both consumer and creditor interests agree that the Fair Debt Collection Practices Act needs an update to reflect today’s economic and technological realities, the two sides are predictably worlds apart in their visions of what form that updating should take. Furthermore, whereas the End Debt Collector Abuse Act of 2010 was co-sponsored by Republican Senator George LeMieux, GOP support of the current bill appears unlikely. The 2010 bill died in committee in spite of Senator LeMieux’s sponsorship.

Nevertheless, advocates for consumer rights and protections can thank Senator Franken for at least continuing the debate surrounding collectors seeking arrest warrants for debtors. Many Americans are unaware of this practice, and many feel it’s unfair upon learning about it.

Similarly, testimony from the Senate hearings Franken chaired to explore some of Accretive Health and Fairview Health’s collection and patient privacy practices is sure to spark further examination of their respective organizations and the health care collections industry in general. For many Americans, these are steps in the right direction, if only small ones.