FDCPA Class Action Filed Against Mercy Health Saint Mary's, NPAS

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Mercy Health Saint Mary’s and NPAS, which manages the former’s revenue cycles, are the defendants in a class action claiming the entities engaged in a pre-collect “flat-rating” scheme to intentionally misrepresent to consumers that they were in fact debt collectors.

The case alleges NPAS sends “pre-collect” letters in an attempt to induce payment from debtors. Even though NPAS sends the pre-collection letters, it is Mercy Health to which debtors must make payments, something that is never made explicitly clear to the unsophisticated consumer, according to the suit.

A debt collection agency is prohibiting from flat-rating, which the Fair Debt Collection Practices Act (FDCPA) outlines as the furnishing of any collection form knowing that said form would create the false belief in a consumer that any party other than a creditor is participating in the collection of a debt when in fact no other party is involved other than the debt collector. The lawsuit claims the defendants failed to provide an FDCPA-required mini-Miranda notice clearly stating that they were debt collectors attempting to collect a debt and that any information provided by the debtor would be used for that purpose.