A fund set up by a Idaho billionaire to help residents defend themselves against “unreasonable attorney fees” in collection-related lawsuits has so far taken on 102 cases, which represent the most “egregious” instances of individuals being victimized, Frank VanderSloot said in an interview that was published yesterday.
All but five of the cases the fund has decided to help are from one collection agency, VanderSloot said, which was why he became involved in the first place.
VanderSloot is the Chief Executive of Melaleuca, a wellness company. One of his employees became embroiled in a legal battle against a collection agency, which was subsequently written about in an Idaho newspaper. The woman owed a debt of $294, which grew into $5,583.25 as a result of legal wrangling over a garnishment notice. The newspaper published a series of articles about the collection agency, Medical Recovery Services, which caught VanderSloot’s attention.
Among the practices that VanderSloot said his fund has helped uncover are:
- Refusing to stop collection efforts on debt that has been discharged in bankruptcy.
- Refusing to stop collection efforts on debt that was paid by the insurer even after the medical service provider demands the collection agency stops billing. The pattern there is the collection agency says, ‘Look, we understand there was an error but we got involved and since we got involved, you need to pay our fees’ even though the poor patient had nothing to do with making the error in the first place.
- Garnishing bank accounts that contain only funds from Social Security, disability, veteran funds, or other funds protected by the federal government.
- Misleading debtors into believing that they do not need to file anything with the court or show up in court after a complaint has been filed.
- Setting up a payment program and having people pay, sometimes for many years, only to learn about the transaction fees or attorney fees that are being tacked onto the bills as they’re paying – they learn after many, many years they’ve not made any progress.
VanderSloot said the agencies should be allowed the opportunity to share their side of the story, should they so choose. But, he added, the patterns of behavior that he and his team have noticed compelled him to come forward.
“I would not be making these things public if we were hearing these stories from one person or even two or three people,” VanderSloot said. “We’re hearing these stories over and over and over from now dozens and dozens. Everybody has their own story but there are so many similarities to what we’re being told that I think it warrants to let the public know that at least this many people are having these stories. I think it warrants more looking into and folks deserve their fair day in court.”
When the fund was announced in late April, one of the attorneys for Medical Recovery Services offered the following statement: “In representing the interests of our clients, we always ensure to follow all applicable rules, regulations and statutes — as well as our professional ethical obligations. When collecting owed debts — earned by medical professionals — our practices are fully supported by the applicable laws of our highly regulated industry, and the court determines post-judgment fees on a case-by-case basis. The fees in question are for the time and resources we have invested in these cases to best support our clients.”
