The plaintiffs in a suit that was filed seeking to overturn a new medical debt collection law in Nevada have filed a motion to amend their complaint, seeking to add in a new argument that the law creates a false sense of urgency in violation of the Fair Debt Collection Practices Act.
A copy of the motion to file an amended complaint in the case of Aargon Agency, ACA International, Allied Collection Services, AssetCare, Business and Professional Collection Service, Capio Partners, CF Medical, Clark County Collection Service, Collection Service of Nevada, Donna Armenta Law, Nevada Collectors Association, PlusFour, Progressive Management, and The Law Offices of Mitchell D. Bluhm & Associates v. Sandy O’Laughlin can be accessed by clicking here.
The plaintiffs filed their suit against the state back in June, arguing that the enactment of a medical debt collection law — SB248 — is unconstitutional, preempted by federal law, and can not be complied with. They sought a temporary restraining order to block the enactment of the law. A hearing was held earlier this month on the TRO request and the industry is waiting for a ruling from Judge Richard Boulware.
There has been a lot of confusion and concern about SB248 which places a number of new requirements on collectors that work healthcare accounts in Nevada. AccountsRecovery.net held a webinar seeking to provide information and answer questions about the law — a recording of the event is available by clicking here.
While preparing for the hearing on the temporary restraining order, the plaintiffs said they uncovered another argument that renders the law unenforceable. SB248 requires medical debt collectors to send written notifications to individuals via registered mail in certain situations. The Federal Trade Commission and the Ninth Circuit Court of Appeals has held that sending letters via certified mail creates a false sense of urgency, which is in “direct violation of the FDCPA,” according to the plaintiffs. The plaintiffs argue that case law and the Federal Trade Commission Act, which preceded the FDCPA, have made it illegal to use certain types of telegrams for debt collection purposes. In that regard, using certified mail — which is held at a post office for 15 days after several attempts to deliver it are made — “creates a sense of urgency similar to that of a telegram,” the plaintiffs allege in their proposed amended complaint. “Specifically, the consumer does not immediately know this is a debt collection attempt and may create a false sense of urgency or fear when receiving notice, they have missed a certified letter and must pick it up.”
