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Is my billing company a "debt collector" subject to prohibitions on certain conduct?

December 13, 2016
Provided by: Jennifer Kirschenbaum, Esq. 
Question:

Hi Jennifer, 

Is my billing company a "debt collector" under the law, and subject to prohibitions on certain conduct?

Thanks, P

Answer:

I asked Natalie Donaldson, Esq., a senior associate in our Commercial Litigation Department to answer, and Natalie has provided - 

Medical Billing companies are considered debt collectors under Federal and NYC Law. They are NOT considered collection agencies needing to be licensed under NYC law however, they do have to follow the general collection guidelines. Please see the below for the specific reference/definitions:

FDCPA defines a “debt collector” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.” In New York, the definition of “debt collector” is much shorter: “an individual who, as part of his or her job, regularly collects or seeks to collect a debt owed or due or alleged to be owed or due.”

For guidance about conduct prohibitions for "debt collectors" in NY, I recommend visiting the Attorney General site - located at:  http://www.ag.ny.gov/debt-settlement/debt-collection-companies

Also helpful -  What constitutes Harassing and Abusive Tactics - http://www.ag.ny.gov/debt-settlement/harrassing-or-abusive-tactics. 

 


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