Class Action: State Collection Service Made False Threats of Negative Credit Reporting

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A proposed class action filed in Wisconsin alleges that State Collection Service, Inc. threatened to report three consumers’ medical debts to credit bureaus before it was legally permitted to do so.

Due to “billing disputes and delays in insurance coverage,” medical debts are prohibited from appearing on consumers’ credit reports for at least 180 days after delinquency, the case explains. Still, the suit claims the defendant sent the plaintiffs collection notices that stated, in part:

“If requested, this office will notify you if and when it intends to report this claim to a credit bureau, but in no event will that happen until after the 30 day validation period described below.”

Since the debts were not eligible to be submitted to credit reporting agencies during the 180-day waiting period, the case argues that State Collection Service deceived the consumers by suggesting the company would be able to take action against them should they not pay or dispute their obligations within 30 days of receiving the letters.