Today I have another example of the stellar performance we see from debt collectors, and, in particular, medical debt collectors. In this particular case, the debt collector, AR Resources, Inc. got two people confused. They had different names, different social security numbers, and even an almost 50-year age gap. The only thing they had in common was lineage. One was the father of the other. AR Resources, Inc. reported the alleged debt on the son’s credit report despite it belonging to the father. Is this a new trend among debt collectors? If your parents can’t pay their bills, are you liable for them? Or is this just a way to shame the father into paying the debt? Whatever the reason it is despicable, but sadly not surprising from this industry.
AR Resources, Inc. is a collection agency that is hired by companies to collect debts owed by third parties. They have about 600 clients, receive on average 50,000 new accounts each month, and generates its only income by receiving a percentage of the debt that it recovers for its clients. So, they have a truckload of accounts, and they only make money if the consumer pays them. They don’t get paid extra for doing anything right. They don’t get paid to scrutinize the accounts they receive from their clients. They definitely don’t get paid if they send an account back. What can they do if someone is unable to pay, and maybe they are unable to collect because a person is living on social security like many of us may soon be? Well.... let’s look at what debt collectors have done in the past. In the past, they might have called your children, your neighbors, your employer, etc., and let them know about your debts. This was very common and is part of the reason Congress enacted the Fair Debt Collection Practices Act (FDCPA). It gave Consumers a voice and a vehicle to stop this behavior. The Fair Credit Reporting Act (FCRA) should protect consumers as well, but maybe AR Resources, Inc. didn’t read that one. This is how the son ended up with 19 (count ‘em....19) false accounts on his credit report. Not a problem, though. The FCRA provides a vehicle for disputing debts to get that fixed. So....Son disputes. He disputes almost 30 times. Yes....you read that right. Almost 30 times. Why didn’t that fix it?
As part of its debt collection efforts, AR Resources, Inc. and its investigators utilize a system known as e-OSCAR to receive notice of and respond to the consumer credit disputes received from the credit reporting agencies such as Transunion, Experian, and Equifax. The disputes received through e-OSCAR include fields for the disputing consumer to include a message relating to the dispute. This is actually an industry standard. In our example today, AR Resources, Inc. did not review the message field, and it seems they never do. They also NEVER contact their clients or the consumers to get more information when there is a dispute. Apparently, it is just easier and faster to claim they investigated and actually do nothing. They described it as “too burdensome.” Don’t have to pay someone and don’t have to send back accounts that won’t make any money once they are sent back. In fact, they only spend about a minute processing each dispute they get. So, multiple ‘investigators’ for AR Resources, Inc. claimed that despite someone having a different name, different birthdate, and a different social security number this person was actually the person responsible for the debt. They also ignore the message from the son that he had never received medical care in his life, or words to that effect. AR Resources, Inc. even has a policy that a different name is not a reason to stop collecting. So good luck getting them to correct a mistake.
If you think this is crazy, you aren’t alone. The Federal Judge felt the same way. In today’s climate, it is hard to find a Court that is receptive to consumer arguments because the companies are always right. Even the pro-business court found that this was so egregious, that the jury didn’t get to hear AR Resources, Inc.’s argument that their investigation was reasonable. The Judge said it was not, and there was no way a reasonable person could say otherwise. Pretty uncommon for a court to say that in a consumer’s favor. Shockingly (not really), according to the judge it appeared AR Resources, Inc. “prioritizes speed and efficiency over accuracy with respect to its investigations.”
I am not sure how I feel about letting a judge something in my favor. It takes away some of the effect the jury feels when they have to watch the debt collector, or other testiliar (person hired to testify), spouting something that a toddler knows is total BS. I just think that has a lasting effect on people. At least it did before the last few elections. In this case, it worked. The jury awarded $80,000.00 and $700,000.00 in punitive damages. The Court did reduce the punitive damages to $475,000.00 and AR Resources, Inc. has "led an appeal, so it is not "nal yet. But it is still nice to see a case like this getting to a jury.
The only negative takeaway, to me at least, is that according to the Court, the problem was not the fact they reported it on the wrong person’s report. It was the fact they did look at the information provided in eOSCAR. If the testiliars had said they reviewed all the information provided, the Court may very well have ruled a different way. Granted, this might be my pessimistic (realistic in my mind) nature in reading the opinion. It also may be the Court just saying we don’t even have to get to the question of reasonableness because you really didn’t do anything.
Finally, the medical provider, Grassy Waters Inpatient Services, is one of the Defendant’s clients, and frankly, they are to blame too. They know how these debt collectors operate and use them to extract blood from that turnip that just doesn’t have it, and in this case, doesn’t even owe it. I call them out because they reap the rewards from this despicable behavior but they don’t have to get their hands dirty or sully their name when the facts come to light. They just play dumb, all the way to the bank to cash that check. But make no mistake, they are just as evil as the agents they hire on their behalf.
If you are interested in more details, the order from the Court on the Motion for Summary Judgment is Here.
There are other documents in the case that are interesting as well. When Plaintiff claimed that they were a consumer AR Resources, Inc. stated they didn’t know and didn’t have information to determine that. The actual words they use are, “Defendant is without sufficient information or knowledge to determine the veracity of the allegations contained in this paragraph.” This was their response to quite a few allegations such as “AR RESOURCES, INC., (hereinafter, “AR Resources”), is a business entity that regularly conducts business throughout every state and county in the United States and as a corporation that does business in the state of Florida, is a citizen of the state of Florida.” Not sure how they wouldn’t know. I guess they were working on their defense of just being stupid. In reality, they all do this. It is just code for, it is true, but we can’t admit it because we will lose, and there goes our chance to baffle everyone with our BS. For the claims they felt were not true, they actually use the word “deny”.
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