Validation letter shows zero balance!

[pushed]

Hi everyone,

I'm still hanging on but I may have to go the BK route soon.

However, this little gem entered my life two months ago and I'd like some advice. I received a first letter from DECA, a collections agent, about an outstanding debt that is over three years old. I sent a request for validation and I specifically requested a copy of the document signed by me stating that I was responsible for payment (it doesn't exist).

A week later I received their verification that they say validates my debt. The verification is a statement of my account listing the date of service as Oct. 5, 2010 for the amount they claim. The next line is dated Nov. 30, 2010 and it says "Adjustment" and the amount is a negative (subtraction) of the total amount entered on Oct. 5. The "Total Current Due" is $0.00. This fits with what I recall as the hospital has a program for people who fell on hard times and they wrote off all expenses and then used that to demonstrate that they are really a "not-for-profit" hospital.

While waiting for their return correspondence I did some searching and there are several active class action lawsuits against DECA for violations of the FDCPA. I also found several state Attorney General offices with open investigations. I called an attorney who is representing a class action group and he stated that I didn't have a FDCPA claim since their statement shows that I owe nothing, but he suggested that I may have an actionable cause under one of the fraud sections of the law, or something similar. He hates them with a passion and he suggested I contact an atty in my state to pursue this.

While I find operations like DECA reprehensible due to their business practices, I wonder whether this would be a waste of my time. I do want to see that this debt is erased (as it seems to be) and that it never shows up on my credit report, etc. Aside from writing to DECA and using the statement they provided to point out that I don't owe a penny, what documentation do I request from them to be certain that this never shows up again as zombie debt or finds its way onto my credit report? Do I need a statement from the actual debt holder? What is to prevent the debt holder from modifying the statement to show that there never was an adjustment that brought the balance down to zero?

Thanks for your input!

[GoingDown]

Definitely hang on to that letter from them showing a zero balance. In fact, I would scan it into a computer and upload it to a gmail account or google drive, etc., so you will always be able to find it in the future in case it turns up again as a zombie debt somewhere down the line.

This is what I would do in this case. I would make a copy of it, highlight the area where it shows a zero balance with a bright yellow marker, and send it by certified mail to them along with a full cease and desist communications letter.

"I demand that you cease and desist from any communication with me. I am tape recording all telephone calls from you and will use them as evidence against you if you violate any laws."

And if they ever do call you again, you actually do have a FDCPA case, because...

15 USC § 1692e - False or misleading representations
(2) The false representation of—
(A) the character, amount, or legal status of any debt; or
(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

I would also make a copy of all the letters and so forth they have been sending you, and then go down to the hospital or wherever the debt originated, and talk to someone in the billing department about it, and ask them to please stop sending your zero balance debt out to debt collectors for collection. They need to be made aware of what is going on with your zero balance debt. It may be a glitch in their computer program that is batching all debts-- even zero balance ones-- together and sending them out to collections.

[pushed]

Thanks for your reply. I did follow your advice including archiving backup copies and images of the statement and sending a C&D letter to DECA. They have not contacted me again. I did call the hospital billing dept. and the agent recognized the error and she didn't see why it had been sent out for collection. She assured me that everything had been taken care of, including letters to the three credit bureaus, and that it wouldn't happen again. I then sent a copy of the validation statement to the three credit reporting agencies asking that the item be removed. By the time I checked months later it was gone.

However, I then received a dunning letter from a different collection agency in May for the same debt! I promptly sent off a request for validation similar to that described in my first post just to cover my bases and I received a similar statement showing a zero balance. This time I went to the hospital to sit down with a patient accounts representative. She couldn't have been nicer, but she couldn't see why my account was still being sent out for collection. She promised that she would get to the bottom of this issue. I also pulled my credit reports and it appeared on two of the credit bureaus. After approximately two weeks the patients accounts rep was unable to determine why this charge continued to be sent out for collection and she couldn't guaranty that it would not happen again.

The hospital in question, hospital A, had been acquired by a large hospital, B, which is now a system of hospitals. The acquisition took place around 2007 and the accident from which the debt arose occurred in 2009.

I wrote to the president of hospital B and explained my problem. I traveled downtown to meet with an ombudsman to resolve the matter. Once I arrived at the meeting there were representatives from IT, patient accounts and two other departments, along with an assistant to the hospital president. I presented all of my documentation including the invoices from the hospital (none of which showed a zero balance), the dunning letters, my letters in response requesting validation and finally my letters to the hospital. They truly had no idea why the (non-existent) debt had been sent out to collections but had never been sent to me for payment, although the balance was zero. (The larger group had been assembled not to challenge my account of what had transpired but rather as a fact finding committee that had already been searching for the source of the problem that affected many more people than me.)

It was about six weeks later that I received a call from the ombudsman who explained what had happened. It had to do with the two IT systems at each hospital. Once the smaller hospital, A, had been purchased by B, a complex interface was designed that would enable hospital A to transmit billing information to the large hospital system B. Apparently that part worked well. But the health system still wanted bills for services from hospital A to be sent out from A since that was a small community hospital and studies had shown that consumers were more likely to pay their bills from the local hospital than the big city health system. Apparently, the interface for transferring billing information from B back to A hadn't been as thoroughly tested so a bill that had been "absorbed" by system B, and credited so the account balance was zero, didn't have the "debt cleared" field properly coded when the data was sent back to A. In fact, the field was interpreted by the IT system at hospital A to mean that the account was delinquent. The collection agencies' software didn't check that the balance owed was a non-zero, positive amount so a letter was generated to the creditor and a report was sent to the credit bureaus. However, the report sent to the credit bureaus listed the original amount billed as the amount delinquent on the account. It soon became clear that under certain conditions the information sent back to hospital A was triggering an interpretation error that resulted in patient accounts being forwarded for collection.

The interface between hospitals A and B was supposed to be temporary. Due to the uncertainty in the health care delivery sector over the past five years, the large system of hospitals assembled by this group was limping along on "temporary interfaces" between hospitals while a permanent, system-wide IT system was being developed and tested. It is being rolled out gradually over the remaining months of 2014. In fact, I just received an email suggesting I enroll in their online patient interface that will make test results available online, the ability to schedule appointments without the need to speak to a human and the ability to request prescription refills, etc., etc.

The reason I wrote this mini-book was to let others know that sometimes technology does not cooperate with the best intentions of the humans that have assured us that our billing issue had been resolved. It pays to check your rating with the credit bureaus as well as the online docket for your county court system to catch something before it has a chance to snowball out of control.