A new strategy to collect medical debt from Kentucky residents recently caught the attention of our federal judiciary. When medical bills are unpaid, they are usually turned over to collection companies. Those collectors, in turn, are regulated by the Fair Debt Collection Practices Act, which prohibits them from engaging in harassing, oppressive, or abusive conduct towards Kentucky consumers. To overcome these rules and free themselves to harass consumers, new debt collectors called “early-out vendors” have started collecting medical debt in Kentucky. One such example is a company called NPAS, Inc.

NPAS operates a call center in Kentucky. It receives aged medical debt from local providers and tries to collect it. NPAS claims that it just “services” medical debt instead of collecting it. A federal court in Louisville, however, recently disagreed. In Fausz v. NPAS, Inc., the Western District of Kentucky ruled that NPAS was indeed a debt collector. The Court said that the language of the Fair Debt Collection Practices Act determined whether NPAS was truly a debt collector or an “early-out vendor.” And the Court was clear in its ruling: “NPAS’s argument that because [the plaintiff’s] account was not in default, it could not act as a debt collector and could not violate the FDCPA as a matter of law is unavailing.”

If you have been the victim of a harassing debt collection practice by NPAS or any other “early-out vendor,” please call us for a consultation on whether you have rights or remedies under the Fair Debt Collection Practices Act.