1. The hospital hustle. When you go to the hospital, the person who collects your admitting information or visits your room post-surgery may not be a hospital staffer, but a debt collector seeking your money.
To better recoup unpaid hospital bills (nearly $40 billion in 2010), some hospitals are using debt collectors who pose as employees — or at least don't properly disclose that they're collectors. The goal is to make you pay upfront, settle old bills or go elsewhere for emergency care.
One collection agency specializing in hospital debt, Accretive Health, was recently sued by Minnesota Attorney General Lori Swanson for allegedly violating federal privacy laws through this practice. The suit was filed after officials learned that an Accretive employee had a laptop containing the records and personal information of some 23,500 patients at two state hospitals.
This information was used to create "stop lists" to help stall certain patients from receiving emergency care, says Swanson. Accretive employees allegedly would sometimes run through prepared scripts to make patients believe they would not receive treatment until payment was made.
In a statement, Accretive cites "inaccuracies, innuendo and unfounded speculation" in Swanson's lawsuit. In late April, the company filed a motion to dismiss it.
A week later, Health and Human Services Secretary Kathleen Sebelius said her department would look into the practice of having "aggressive contractors" confront hospital patients while "not making it clear that they were actually bill collectors and not part of the hospital system."
- Your defense: Know that federal law requires hospitals to provide emergency care to anyone regardless of citizenship, legal status or ability to pay. Don't assume a hospital "employee" soliciting your information is legit; ask to see facility-issued credentials and verify the person's position with personnel you know to be genuine.
2. The credit card capture. If you've got a debt that's passed its statute of limitations — usually three to 10 years, depending on your state — you're home free, right?
Not if you fall for a legal but sneaky maneuver.
Here's how it works. A collector who's after that expired debt forms a partnership with a bank, which then offers you a credit card. Because of your debt history, you may not qualify for traditional plastic.
The fine print of the agreement explains that payments will be applied, in part, to the previous debt. So if you make one payment on the new card, you become legally obligated to pay at least some portion of the old debt. This restarts the clock on the statute of limitations.
- Your defense: If you're contacted about a past debt, always check your state's laws about statute of limitations. But if you've owed in the past and are offered a new credit card, be on guard for fine-print gotchas that might revive an old debt. Some people, it should be noted, knowingly take these cards because otherwise they'd have no plastic at all.