Charging a Percentage Fee for Medical Bills Violates FDCPA

The 11th Circuit held that a debt collector that added a percentage that was equivalent to its fee to a medical bill assigned to it for collection violated the FDCPA.  In Bradley v. Franklin Collection Services, Inc. the court held that Franklin violated 15 U.S.C. § 1692f(1), including any interest, fee, charge, or expense incidental to the principal obligation unless such amount is expressly authorized by the agreement creating the debt or permitted by law.

Franklin added 33.33% to Bradley's bill assigned to it for collection.  This was the fee Franklin would collect for payment of the bill.  But Bradley signed an agreement with his medical provider in which he agreed to pay the costs of collection.  In reaching its decision, the court reasoned that the costs of collection do not include the fee paid to the debt collector.

The lesson is that whenever you get a bill from a debt collector for an unpaid healthcare bill, you should closely scrutinize the bill for extra fees and costs.  In addition, you should demand in writing that the collector validate the debt including itemization of the amount it seeks to collect.

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