Hook, Line, and Sink ‘Em: Debt Collectors New Favorite Prey…Consumers with Old Medical Debt!
Last Week Tonight show host John Oliver forgave approximately $15 Million dollars’ worth of old medical debt. The price paid? $60,000 dollars.
How is it possible that millions of dollars of medical debt can be wiped away while consumers are expected to pay back every single penny of old medical debt? Oliver and his team created debt collection company “Central Asset Recovery Professional” or better known as CARP – brilliantly named after the bottom feeding fish. CARP purchased expired Texas medical debt for $.004 for every dollar. Rather than collect the $15 Million, CARP very publicly forgave the debt by partnering with non-profit organization “RIP Medical Debt” which specializes in forgiving medical debt without tax consequences to the consumer.
As Oliver pointed out, selling medical debt is a shady, but lucrative business. While unsuspecting consumers bustle to pay old medical debt, the debt is sold for pennies on the dollar and turned into a profit. In some instances, a company writes off the debt on its taxes and then turns right back around to sell the full amount of the debt for a fraction of the cost. In turn, the third party which purchased the debt attempts to collect the full amount. The worst part of this shady business is that the debtor’s information is sold in an “as-is” unverified format, which the new owners of the debt use in their continued attempts to collect, without any knowledge as to whether the debt has been paid or discharged in bankruptcy. It is far too common for debt collectors to attempt to collect old debt after the statute of limitations has expired, when the debt collectors can no longer file a suit against you. The statute of limitations varies across the country, but in Florida medical debt collection expires after five years. While under Florida law five years is five years, once the debt collector begins to collect payments on the expired debt the statute of limitations catches a second wind.
Under the Fair Debt Collection Practices Act, medical debt is considered consumer debt which covers debt incurred for personal, family, or household purposes. As a consumer, you are protected from harassing practices. Debt collectors are prohibited from falsely implying they are attorneys and cannot state that a lawsuit will be filed against you when they have no legal right to do so. If you are being harassed for old debt, know your rights and don’t fall prey to the bottom feeders!