Colorado Springs Woman Tied Down With Medical Debt Collection Company After Denver Federal Appeals Court Agreed That Medicredit, Inc. Violated Consumer Protection Law By Contacting Her After Expressing A Request stopping calls.
On Tuesday, a three-judge panel from the U.S. Court of Appeals for the 10th Circuit upheld a lower court ruling in favor of Elizabeth Lupia and concluded that Medicredit had failed to show that the policies of his business were sufficient to prevent unauthorized calls to debtors.
In particular, the decision determined that a single call that went to voicemail was sufficient grounds for a federal consumer protection claim.
“It was just one day. Or that’s how Medicredit, the debt collection agency, says it, ”Judge Gregory A. Phillips wrote in the August 17 panel opinion. “One Monday, Medicredit received a letter from a consumer, Elizabeth Lupia, asking her to stop calling her about an unpaid medical debt. The next day, Tuesday, before Medicredit processed the letter, he called Ms. Lupia again about the debt.
But for Lupia, he added, “it was more than a day.”
After a medical intervention in April 2017 in Colorado Springs, the hospital billed Lupia for the balance that her insurer had not paid. After Lupia refused to pay, the hospital turned to Medicredit to collect the debt, which attempted to do so from April 2018.
At the heart of the dispute was the three-day period between when Medicredit received Lupia’s letter requesting that all phone calls “cease immediately” and when it finally processed the request.
Lupia sued Medicredit for violating the Fair Debt Collection Practices Act, which Congress enacted to eliminate abusive debt collection practices. The law prohibits a debt collector from contacting someone who has communicated in writing that they want the contact to cease.
The law also requires collection agencies to stop their attempts to collect a debt in the event of a dispute, as was the case in the case of Lupia.
“All the debt collector had to do was not call to comply with the FDCPA,” said Dan Vedra, a consumer protection attorney in Denver who reviewed the 10th Circuit ruling. “The debt collector broke the law by calling her anyway, but claimed that she had not suffered any ‘injury in fact.’ The debt collector is like a driver who gets a speeding ticket which the only defense is “Well, I didn’t kill anybody”.
Initially, Medicredit claimed that Lupia did not have the legal capacity to sue because she had suffered no prejudice from the unanswered appeal Medicredit gave her on May 8, 2018. The senior judge of the court United States District Officer Robert E. Blackburn, who made the initial ruling on the Lupia side, said she actually suffered an injury – a breach of privacy.
On appeal, Medicredit claimed it made a real mistake in contacting Lupia, given that she sent her letter to the company’s PO box and it typically took three business days to process mail and suspend an account if necessary. The company also argued with the 10th Circuit that a three-day processing time was reasonable and that Blackburn was wrong to conclude that no jury “could find a procedure that inexplicably allows a three-day delay between receipt of a debtor’s dispute and recording the dispute in the system ”was a reasonable way to prevent erroneous contact.
But the 10th Circuit agreed with Blackburn and noted that Medicredit initially refused to provide details of its mail handling policies, only to present its evidence much later. The panel declined to consider Medicredit’s late response to the allegations.
A member of the panel, Chief Justice Timothy M. Tymkovich, asked Lupia’s attorney during oral argument why a three-day delay was unreasonable.
“Is a debt collector required to have, for example, 24/7 on-call mail processors? He wondered.
Attorney Russell S. Thompson IV responded that it was difficult to judge reasonableness because the company had not disclosed its mail handling procedures. But in general, he said, “contacting the consumer is an invasion of privacy and that’s what Congress wanted to avoid here: invading that consumer’s privacy of being called home and harassed. at home when specifically asked not to. “
Neither Thompson nor Medicredit lawyers responded to a request for comment on the decision.
Last year, the Colorado attorney general’s office revealed that consumer complaints increased 7.8% between 2018 and 2019, the second-largest category of harassment complaints from debt collectors.
Steve Berken, a bankruptcy attorney at Berken Cloyes in Denver, hailed the move as good for consumers, who tend to “put up with abusive collection efforts” and don’t complain.
“The decision could well have gone to Medicredit. For years the courts have ruled that damages demand something ‘concrete’,” he said. “The 10th Circuit embraces a larger view, and that includes a phone call as intrusive.”
The United States Supreme Court has rendered several decisions, including TransUnion, LLC v. Ramirez in June 2021 – ruling that a violation of consumer protection law is not sufficient for legal action without real harm to the consumer.
Vedra, the consumer protection lawyer, said the extent of the harm should determine the harm suffered by the consumer, not whether he can start his day in court.
“The opinion of the 10th Circuit here contrasts sharply with courts which wish to dismiss consumer claims on jurisdictional grounds,” he said, “even when the consumer may express the violation of a right protected by the Congress”.
The case is Lupia c. Medicredit.