Tag Archives: TCPA

A Warning You Need to Read: Don’t Believe in Something For Nothing!

14 Jan

Many businesses have been told by their collection agency that they can provide free collections to them simply by adding the percentage fee onto the debtor’s balance as “the cost of collections”  In other words, promising prospective customers “something for nothing.”  With the high cost of collection agencies, this is a very tempting offer for a business who needs to collect their money and hesitates at paying an agency their typical 30-50% fee for collecting.


First of all, the match doesn’t work anyway.  If the fee is 50% and the agency or the client adds the 50% back into the bill before it is collected, the client will only receive 50% of the new balance, which is not the full amount (only 75% of the original bill)

More importantly than that, the agency is tempting you to violate Federal Laws against usury.  The agency is setting themselves, AND POTENTIALLY YOU, up for a law suit and stiff fines and penalties.  Even if you put a statement to that effect into your financial policy, you may not charge these percentages to recoup your collection fees.

Please take a moment to read this article, copied from the ACA International (American Collector’s Association) website about a recent court case against such an unscrupulous agency.

Court Rules Against Collecting Percentage-Based Fees

Eleventh Circuit Court of Appeals ruled that charging consumers a percentage
of their account balance as a collection fee is a violation of the FDCPA unless
the consumer explicitly agreed to pay a percentage-based fee.

In a Jan. 2, 2014, ruling, the Eleventh Circuit Court of Appeals found that a collection
agency may not collect a fee based on a percentage of the account balance if the
original contract between the consumer and creditor did not specify the consumer
would be responsible for a percentage-based fee.

In the case, Bradley v. Franklin Collection Service Inc., the consumer plaintiff had
signed a patient agreement when receiving medical treatment that stated, “In the
event of nonpayment… I agree to pay all costs of collection, including a reasonable
attorney’s fee…” The creditor subsequently added a 33-1/3 percent fee (reflecting
the contractually agreed upon fee between the creditor and the collection agency)
before forwarding the account to the collection agency.

The court ruled that the plaintiff, “agreed to pay the actual costs of collection; his
contractual agreement with [creditor] did not require him to pay a collection agency’s
percentage-based fee where that fee did not correlate to the costs of collection.”
The court found that the percentage-based fee, assessed before the collection
agency’s attempt to collect, was not related to the agency’s actual cost of collection,
thus breaching the agreement between the consumer and the creditor. Therefore,
the court held that the collection agency violated the FDCPA by collecting the 33-1/3
percent fee when the consumer only agreed to pay the actual costs of collection.

© 2014 ACA International

In other cases, medical practices, along with the agency, were charged under racketeering laws for the very same offense.  The fines and penalties that they were required to pay were astronomical.

Please, let me show you a way to avoid the percentages charged by these collection agencies, without running afoul of the law, and while collecting more money than they do in the process.

Respond to me through the form below and I will rush you the information on how to avoid these kinds of unscrupulous methods and still collect more of your hard earned money.

HIPAA: How to protect yourself and your practice | Medical Economics

13 Aug

HIPAA compliance is getting more complicated, and more essential.  Is your A/R management or collection agency doing anything to protect you from violations of HIPAA, FDCPA, HITECH, and TCPA?  If not, you may be liable for drastic penalties.

HIPAA: How to protect yourself and your practice | Medical Economics.

Judge Upholds TCPA Class Action Status Against Medical Debt Collector

31 May



I cannot emphasize enough how important it is to your practice to know beyond a shadow of a doubt that your collection agency is committed to 100% compliance to all Federal, State and Local regulations concerning first and third party collections.

You may be liable if your agency is not compliant.

Judge Upholds TCPA Class Action Status Against Medical Debt Collector.

To learn more about keeping your practice, and your receivables compliant and safe, send me your information using the form below and I will be happy to help.

More Evidence Of The Importance of Compliance. Kaiser Permanente joins a growing list of companies sued for non-compliance.

11 May

“Law360, New York (April 26, 2013, 2:06 PM ET) — Kaiser Permanente was hit Wednesday with a proposed class action that accuses the health care organization of violating consumer privacy and the Telephone Consumer Protection Act by calling a former California customer’s cellphone without consent.

Plaintiff Rafael David Sherman alleges that Kaiser sent an unsolicited automated message to his cellphone April 23, three months after Sherman canceled his health insurance coverage with the Kaiser Foundation Health Plan Inc., according to the complaint filed in the Southern District of California. Kaiser used an automatic dialing system to contact the plaintiff …”


Compliance is important, and knowing how to be compliant with all of the laws that govern contact with cusomters/patients, the follow-up of accounts and collections is getting tougher and tougher.  All the more reason to have a partner that will ensure that you stay compliant.

For more information on keeping your business or medical/dental practice compliant with not only HIPAA, but also the TCPA and the FDCPA and other state and local regulations, please contact me.  I’d be happy to help keep you out of court.

Are You Asking The Right Questions?

9 May



It is always important to ask questions, especially if you are not 100% certain of the subject matter you are discussing. This is even more important when selecting a company to recover your late payments and call upon people that are delinquent on their accounts. It is paramount to ensure your company of choice is expert in their field.

Today with the ever changing Federal and State regulations, it is more important now than ever to ask questions first before you have to answer for shortcuts or missteps that could result in hefty fines for lack of compliance with the letter of the law.

The next time you talk to a potential collection or debt agency be sure to have the following questions close by so you are not hit with Federal and State regulations later.

1. Is your company compliant with TCPA, HIPAA and familiar with state laws regarding compliancy?
Yes. In fact, Transworld Systems is compliant in all 50 states as well as having a Hold Harmless Statement in our agreement with clients.

2. Does your company perform background checks on collectors in required states?
Yes. We perform background checks on collectors in ALL states.

3. How are cell-phone calls handled?
Rules governing cell phones are complex and change frequently. You want a collections agency that is willing to give you a Hold Harmless Agreement.

4. What is a Hold Harmless Agreement?
Simply put, a Hold Harmless Agreement is an agreement or contract in which one party agrees to hold the other free from the responsibility for any liability or damage that might arise out of the transaction involved.

5. Do you know what PHI is?
Yes. PHI is Protected Healthcare Information. It includes any information about health status, provision of healthcare and payment for healthcare that can be linked to an individual. Be sure the company you choose ensures the security of that information.

6. Is your company licensed to collect in all states?
Yes. If you are billing regional, national or transient customers, it is important that your collections resource can legally collect in the states where your debtors reside.

Contact me for more ways to know if your collection agency will keep you protected from liability and potential penalty.

Is Your Collection Agency Putting Your Medical or Dental Practice at Risk?

6 May

Medical picture


The collection agency industry is highly regulated and there are numerous laws on the books designed to protect consumers, which make it more difficult to collect. While it costs agencies more to be legally compliant and hinders their collections efforts, not complying can lead to class action suits and sanctions against the agency (and possibly their clients) that are more costly in the long run if not fatal to the agency’s very existence. Lets examine how this affects your practice.

The Laws You Know

Most Practice Administrators are familiar with the Fair Debt Collection Practices Act (FDCPA) of 1978 which creates a set of guidelines that collection agencies are required to follow as well as penalties for not adhering to the Act. Additionally, practices are familiar with HIPAA laws and the security requirements of Protected Health Information (PHI).

But Do You Know About These Laws?

Despite having been a law since 1991, most practices are not familiar with the Telephone Consumer Protection Act (TCPA)  which also impacts collections. Among other provisions of the TCPA (such as calls can only be made between 8am and 9pm), the TCPA prohibits the use of automated dialers to cell phones or leaving automated messages on cell phones. While auto-dialers represent a technological efficiency that allows a collection agency to make more frequent calls and collect more money, their use is not compliant with the TCPA when the phone number the patient has provided the practice with is a cell phone. In order to be TCPA compliant when calling a cell phone, it must be manually dialed. Even if a live collector will be connected with the consumer upon pick up, a cell phone can not be dialed using a computer.

Medical Collections Impact

A recent data analysis by Transworld Systems, a large national collection agency specializing in medical collections, revealed that 60% of the phone numbers that their medical practice clients are obtaining from patients are cell phones. In order to avoid fines of $1500 per incident and class action suits, Transworld Systems has enforced strict policies of identifying and separating land line numbers from cell phone numbers. Additional research is conducted to see if the patient also has a land line which can be put on an auto-dialer to obtain better contact rates.

What does all this mean for your practice?

Today with the ever-changing federal and state regulations, you need to ask more questions of your collections vendor to find out if they are compliant with all laws. Ensure your practice cannot be named as a co-defendant in a potential class action suit should your agency be accused of being non-compliant. It is important to have a Hold Harmless Agreement in your collection agency contract where the agency agrees to hold your practice free from responsibility for any liability or damage that might arise out of their collection activities. Ask questions first before you have to answer for shortcuts or missteps later that could result in hefty fines for lack of compliance. It is paramount to ensure your company of choice is an expert in their field who stays abreast of, and quickly adapts to, the seemingly endless stream of regulations designed to protect consumers rights, often at the expense of their creditors.

Here is a sample list of questions to ask your current agency and any potential collection agency you are considering working with:

1.    Is your company compliant with TCPA, HIPAA and familiar with state laws regarding collections?

This is not a yes/no question, they should be able to provide additional information including how often their collectors are re-tested for compliance and how their performance is monitored for compliance.

2.    Does your company perform background checks on collectors in required states?

3.    How are cell-phone calls handled?

If they dont maintain a separate policy for handling cell phone calls, that should be a red flag to you to find another vendor.

4.    Do you know what PHI is and what steps do you take to ensure its security during storage as well as communication with our practice? Ask how they receive data from their clients (do they accept secure electronic encrypted data or do they expect you to fax or mail patient files which are more easily compromised?) Do they provide you with a secure website to view collections status and if not, do they at least have the ability to encrypt emails when attaching a list of status updates which include PHI.

5.    Is your company licensed to collect in all states?

Even if your patients are primarily local to your office, sometimes they move out of state and your agency will have to be compliant with the laws that govern the patients new residence.

6.    Is your company bonded and insured?

Ask for copies of the documents proving bonding and insurance to make sure your money wont disappear if your agency goes out of business, either as a result of poor performance or as a result of a fatal class action suit.

Contact me for a 100% compliant option that will keep you and your practice safe during these times of changing and ever-increasing regulations.