The Exchange | April 25, 2012
By Elizabeth Trotta

Some unsavory debt collection practices by Accretive Health, a heavyweight in the collection of medical debts, have created quite a stir this week after being brought to the public in company documents revealed by the Minnesota attorney general.

The strategies included embedding debt collectors as employees in emergency rooms. "To patients, the debt collectors may look indistinguishable from hospital employees, may demand they pay outstanding bills and may discourage them from seeking emergency care at all, even using scripts like those in collection boiler rooms," The New York Times reported, citing documents and employees.

An Economy of Debt

The growing desperation of both the indebted and debt collectors isn't signature to the health industry. Most accounts are consumer credit card debt, but that's changing "as more success may lie with medical debt, IRS taxes, utility and cell phone bills," according to a recent report by independent market research publisher Marketdata.

There's more money to chase. But agencies are having to work much harder to collect, making more calls and using more aggressive tactics, according to Marketdata.

"There is no doubt that some collectors are playing dirty," according to the study authors.

But the report found the practices are backfiring as the FTC and the National Association of Attorneys General recently reported that debt collection topped the list of consumer complaints in state offices during 2011, and recent FTC actions and fines have revealed fraud and harassment.

To boot, in the past seven years, the number of lawsuits in California accusing collectors of violating federal law has increased fivefold, according to The Sacramento Bee's analysis of more than 5,000 debt-collection cases filed in California's federal courts since 2005.

You Have the Right to Talk to an Actual Law Enforcement Officer

West Virginia Attorney General Darrell McGraw recently filed suit against seven unlicensed debt collection companies, "after receiving complaints alleging that they engaged in a wide range of abusive and unlawful debt collection practices, including repeated harassing phone calls, impersonating law enforcement and judicial officers, making false threats that nonpayment will result in arrest or criminal prosecution, and collecting nonexistent debts or debts that have already been paid."

"Like it" or Not, They're on Social Media

Debt collectors aren't just looking to catch debtors at their most vulnerable moments -- e.g., the ER -- they've also been drumming around their more relaxed social haunts, like Facebook, for years now.

A St. Petersburg, Fla., judge ordered Mark One Financial of Jacksonville to stop contacting the friends and family of Melanie Beacham, who owed $362 on an unpaid car loan, on Facebook in an attempt to find her in 2010.

In 2009, the Consumerist ran an account of someone who had come into contact with a skip tracer impersonating a "cute chick" on Facebook to track down and keep track of debtors.

While there are lines debt collectors can't legally cross, it's worth mentioning that any personal information you put in the public arena is fair -- and legal -- game.