Q&A: Healthcare Recovery Solutions, HIPAA Violations and Medical Info on a Credit Report

Hello Lee,

I am writing in regards to a collection agency - Healthcare Recovery Solutions - I had sent them a letter asking them to validate several collections on my credit report.

I have several issues here

First - they did validate but here is where I have the problem -  The collection agency sent me bills from the hospital - they sent me everything that my husband had done
meaning they sent me an itemized list of all my husbands procedures - from the drugs they gave him, to the surgery he had - everything.  Is this not a violation of the HIPAA laws?  There is six accounts and six different itemized pages of what my husband had done.

Second - not only has the collection agency sent all this information - but they are reporting this on my credit report - and clearly I was not in the hospital my husband was.  I have the signed paperwork from the hospital that is my husbands not mine.  I have disputed this information but have not gotten it removed.  Can they report to my credit bureau report when it is clearly not my bill?

I am in the process of cleaning up our credit - I have followed all the necessary steps - I sent out certified letters and confirmation - here is my next question - I sent out DV letters and most of the companies have not responded big surprise.  But here is my question - are they required by law to notify the CRA that I am in dispute and requesting DV?  I have all the proof - what would be my next step since for one they have not validated and two they have not reported that I am in dispute to the CRA?

Thanks for all your information on your website - it has been such a great help.  I was one of those people who hired a company to help fix my credit and after spending a 1000.00 with really no success - I took over and have had great success.

If you need further information please let me know - If you need copies of what Healthcare Recovery Solutions sent as far as my husbands detailed hospital bills I will send them to show you what they sent.
Thanks again

J.L


J.L,

Wow...where to begin. 

First of all, I'm no HIPAA expert, but I do know that the law allows medical information to be disclosed to third parties for payment purposes. Now, that law is aimed at giving insurance companies as much information as possible in order to ensure proper payment for services--not providing collectors with potentially embarrassing information with which they can bully or humiliate debtors. 

HIPAA laws have changed recently making it easier for third parties to gain access to your medical information. Although I agree with you 100% that this reeks of illegality, HIPPA is complex and I can't say for certain that the hospital doesn't have the right to forward the medical information as it did to Healthcare Recovery Solutions. What I can tell you is that NO sensitive medical information, such as tests your husband had performed or his diagnosis should ever show up on either of your credit reports. I'm not even sure how this information ended up there since the credit bureaus have no format for information other than the basic tradeline (debt, account number, date owed, etc.). 

You don't mention your state of residence and that's crucial to this situation. If you live in a community property state, you are legally liable for any debts your husband incurs during the marriage and he is liable for debs you incur. Because you are just as liable for these debts as your husband, the collection agency has the right to report them on your credit report. If you do not live in a community property state, however, then reporting the debt to the credit bureaus in your name is a violation of the Fair Credit Reporting Act 

Disputing this with the credit bureaus is likely going to get you nowhere since the credit bureaus and collection agencies like to parrot back and forth ("Is this correct?" "Why yes, it is" "Oh, okay then") and call it an "investigation."

As far as the disputes go, the collection agency doesn't have to report the dispute to the credit bureau. They can, but they don't have to. The Fair Debt Collection Practices Act requires, however, that once a debt collector receives a request for validation the company must cease all collection efforts save credit reporting (grumble) until they can provide you with validation. Unfortunately, neither the FDCPA nor the Fair Credit Reporting Act stipulate precisely what constitutes validation. Collection agencies get around the validation requirement by sending out little printouts on their company letterhead that contain your name, an account number and the amount they claim you owe. This only verifies that they claim you owe a debt, not that you actually incurred the debt. But, should they find themselves in court, they can wave this paperwork around and call it validation because the law simply doesn't specify one way or another. 

The collection agencies that did not respond to you are probably ignoring you because you waited more than 30 days to request validation. Section 809 of the FDCPA states: 

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

This 30-day validation period begins when the debt collector first contacts you about the debt. Because first contact usually occurs via uncertified mail, collection agencies often cannot prove that a debtor who requests validation late actually received the original dunning letter and isn't still within his or her 30-day time frame. If you communicated with a debt collector from the company more than 30 days before sending your validation request, the collector knows for a fact that you were aware of the debt and can simply ignore your validation requests because they did not take place within those first 30 days.

Keep in mind that, even with validation requests that take place within the allotted time frame, the collection agency is under no obligation to respond. They can ignore your validation letters for as long as they like provided they do not engage in any collection activity without validating. 

Once upon a time people used this loophole to clean up their credit reports. They would send a validation request to a collection agency and simultaneously send in a dispute to the credit bureaus. The collection agencies couldn't conduct any collection activity before validating which prevented them from verifying the debt's accuracy to the credit bureaus when the credit bureaus began their "investigation." When the collection agency didn't respond, the FCRA required the credit bureaus to delete the entry. It doesn't work quite like that anymore, but Kristy Welch has a brilliant guide to forcing the credit bureaus to actually investigate your debt here: Method of Verification. 

I wish I could help more with the HIPAA issues, but I don't want to accidentally steer you down the wrong path. I do, however, believe that medical disclosure as extensive as what you've described to me here is probably on he wrong side of HIPAA. My recommendation to you is to hire an attorney. Now. Today. Many have free consultations and, if you don't think you can afford one, contact your state's legal aid department to see if an attorney will take your case at a reduced rate. Once an attorney reviews your situation I'm willing to bet that he/she will have more than enough information to help you clean up this mess and get you and your husband some well-deserved restitution. You may even be able to find a lawyer willing to work on a contingency, and that won't cost you a dime. 

I am interested in how this situation plays out. If you get a chance to update me on your situation you can do so in the comments. You never know, another reader may benefit greatly from your experience. 

Best of luck,
Lee 

Q&A: Paid Citibank Charge-Off Still Showing a Balance

Hi Lee! 

 My son in law has a debt with Citibank.  A supposed “collection agency” contacted him, they negotiated he paid it.  He did ask for a written letter that stated it was paid and wouldn’t affect his credit, that letter never came.  My daughter and son in law were going for a house loan and on his credit report low and behold he has a charge off from Citi.  He only owes I think around $1100.  He can pay it but we need to make sure that charge off comes off.  It also looks like on his credit report that Citi still has the debt.  Should I have him send a “pay for delete” letter?  Then he will pay off the rest of the debt?  And if in fact it in in the hands of a collection agency should he send the pay for delete letter to them?  I appreciate any advice you can give us.

 Sincerely,

Tammy

Tammy,

When a big credit card company like Citibank charges off an unpaid debt, it usually sells it to a collection agency which then goes after the debtor for payment. If the debtor pays quickly enough, the debt doesn't usually appear on the debtor's credit report as an additional collection. The charge-off from the original creditor, however, remains on the debtor's credit report. It sounds like this is what happened to your son-in-law.

Once Citibank either transferred the debt to a collection agency or your son paid the debt to Citibank, the charge-off amount should reflect a zero balance. In this case, Citibank's tradeline on your son-in-law's credit report should also reflect that the debt was paid.

I'm not sure what method your son used to pay off this debt, but he should have some sort of paper trail. If he was conscientious enough to request a zero-balance statement from the collection agency, he was also probably conscientious enough to retain whatever evidence he had that proved he'd paid the debt (cancelled checks, bank records showing where he'd made an $1100 transfer to the collector, etc.).

Your son has several options. First, he could dig up some of the old paperwork he has on the debt that displays his account number, call the collection agency, give them the account number, explain the situation and request a zero-balance statement. Provided this took place relatively recently, they should still have this information on file. If he gets a customer service rep who's snarky with him and claims, "We don't do that," then he needs to continue calling until he gets someone helpful. Also, he can request to speak to a supervisor at any point during the conversation. Tell your son to remain calm and professional. Collection agents are used to dealing with rude and angry people. They're a lot more likely to help him if  he remains civil.

Once he has the zero-balance statement in hand its time to call Citibank and ask to speak with a supervisor. He should explain that the charge-off on his credit report is reflecting a balance of $1100, but that his balance should be zero since he already paid the collection agency. They should then transfer him to the credit reporting department (I forgot exactly what Citibank calls it, but its the department that handles credit reporting issues and errors). He can ask for a fax number to fax in the information he has to back up his claim. Tell him to make sure he writes down the name of the person he's speaking with and the time of the call. Also have him ask that the rep he speaks with make a note of the phone call and his problem on his file. This way, if Citibank does nothing to fix the problem, a new rep will have proof that has, in fact, attempted to resolve the issue before.

While your son can work to eliminate the outstanding balance Citibank is reporting to the credit bureaus, he can't change the amount of money that was charged off or simply call and have the charge-off itself removed. The charge-off--whether paid or unpaid--will remain a part of his credit history until seven years from the day Citibank originally charged off the debt. If this reporting period has already expired, he can forget trying to have his account updated to a zero balance and instead demand that Citibank and/or the credit bureaus remove the entry altogether because its obsolete.

Also, you mention that your son-in-law "negotiated" this debt before paying it. Because he requested a zero balance statement I have to assume that he also got his settlement agreement in writing. Without a written settlement agreement from the collection agency, he has no real proof that the debt collector agreed to a settlement at all. It isn't uncommon for collectors to agree to a settlement and then turn around and try to collect the unpaid balance. Without a written settlement agreement from the collector, debtors have next to no protection from this tactic.

Even if there was a settlement in place, its unusual for the original creditor--in this case, Citibank--to report the unpaid balance a debtor owes after he settles with a collector. Once the debt is with a collector, they're not going to bother watching too closely. There's a 99% chance that $1100 was the amount the credit card company originally charged off. Either way, he needs to get that $1100 reduced to zero where it belongs.

Paying the debt all over again might be worth it if Citibank agreed to remove the entry afterward, but your odds of successfully negotiating a pay-for-delete with a credit card company are slim to none. If he decides to pay anyway, even without a pay-for-delete, its a good idea to stay on the phone with the rep, make an automatic payment and have the rep fax him a zero-balance statement right then and there. This time, he shouldn't let up until he gets it. If that means staying on the phone until he gets the fax, so be it.

But kudos to your son for paying this off quickly and avoiding having a collection agency show up on his credit report. Citibank isn't the most fun company to deal with, but resolving problems is often easier when you're dealing with a real credit card company rather than a junk debt buyer.


Best of luck,
Lee

Does My Credit Report Merge With My Husband's or Wife's When We Get Married?

No matter how grim the modern statistics for divorce happen to be, marriage remains a constant in just about everyone's lives. Statistically, by the time you're 55, you have a 95% chance of having been married at least once. Once you're married, keeping your financial life separate from that of your spouse is nearly impossible. There's a lot of folks out there ready to shout from the rooftops that your spouse's credit has no impact on your own, but that isn't entirely true.

Here's the facts: Your credit report absolutely will not merge with your husband's or wife's credit report after marriage. The credit bureaus have enough trouble maintaining accurate reports on individuals. Can you imagine the crapstorm that would ensue if they attempted to merge credit reports? And no, they won't merge your credit reports upon request either, so you can drop that fantasy notion that once you marry someone with excellent credit your poor credit rating will magically shoot up into the stratosphere.  Not gonna happen.

Stay together long enough and share enough joint debt, however, and your credit reports will begin to look frighteningly similar. It's not a true credit merger, but it serves the same purpose. Let me explain:

After marriage, most couples begin accumulating joint accounts. You'll  likely want a joint bank account so that you can both access your money. Most couples who buy a home do so with a joint mortgage to ensure that both parties have a legal claim to the property in the event of a divorce (just for reference, you can put your name on a home's title without your name being on the actual mortgage loan) You're also likely to acquire joint credit cards.

Unless you keep the accounts you held as a single person open, those accounts will gradually "time out" and fall off of your credit report. The credit entries that remain will be the joint accounts that you share with your spouse. The credit bureaus report joint debts to both your credit report and your spouse's. So, although you and your husband or wife's credit report won't merge in the true sense, you can expect your credit records to look extremely similar after several years of building a financial life together.

The gradual merging of credit information rather than the credit reports themselves can either help or hinder your scores. If you happen to marry someone with an abysmal sense of financial responsibility, you'd best be ready to take on the bulk of bill-paying yourself. A single missed payment can wreck serious havoc on you and your spouse's credit scores.

Related Articles:

Do I Owe My Husband's/Wife's Debts Aftter Marriage?

Community Property States and Defaulted Spousal Debt