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STOP Collector Blog From the law firm of Lemberg & Associates

Down the Debt Collection Rabbit Hole

Ever feel like you fell down the proverbial debt collection rabbit hole? That was the case for one New Jersey man, whose insurance company paid his medical bill, yet was hounded by debt collector Financial Recoveries and saw his credit score plummet until he paid the bill – again – out of his own pocket.

According to the Newark Star-Ledger, the consumer provided the emergency room he visited with his health insurance information and his copayment. A few months later, he received a collection letter from Financial Recoveries. He contacted the hospital, which reported that it had the incorrect insurance information and assured him that it would call off the debt collector. Nevertheless, the consumer discovered that Financial Recoveries had reported the debt the credit bureaus, and that his credit score had plummeted 80 points.

Even though the consumer’s insurance company paid the bill, a year later Financial Recoveries was still dinging his credit report, and the consumer’s score took another nosedive. In order to stop the credit abuse, the consumer paid Financial Recoveries, and when he explained that the bill had been paid twice, the debt collection agency refused to send a refund. After the Star-Ledger intervened, the situation was corrected, but this is a good illustration of the damage that a rogue debt collection agency can do to a consumer’s credit score.

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Author
Sergei Lemberg

Sergei Lemberg is the principal at Lemberg & Associates, a consumer law firm that defends consumer rights in the areas of fair debt collection law, fair credit law, and lemon law, among others. He is regularly labeled by the debt collection industry as one of the “most active consumer attorneys” in the U.S.

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