Consumer Law

Pennsylvania AG sues firm, saying it misrepresented law in debt collection letters

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An Allentown, Pennsylvania, firm and one of its lawyers is being sued by the state’s attorney general for allegedly misrepresenting the law to intimidate family members into paying off relatives’ medical debts.

The suit, filed late last month by Attorney General Kathleen Kane, seeks a permanent injunction against James A. Havassy and the Hamilton Law Group, along with restitution and civil penalties, the Legal Intelligencer reports.

It alleges that the defendants’ debt collection practices violate the Unfair Trade Practices and Consumer Protection Law and the Fair Credit Extension Uniformity Act.

According to the complaint, the defendants have sent letters to many Pennsylvania residents saying that family members of people with medical debts are liable for those debts under the Filial Responsibility Law. But that law only applies to situations where public funds have been spent, not to regular debt collections, it says.

“The Filial Responsibility Law was designed to allow recovery from relatives where public money would otherwise be depleted, not as a general method of ordinary debt collection,” the complaint says. “Defendants use the Filial Responsibility Law as a general method of ordinary debt collection for any debt for any medical service, not for the limited use of recovering funds from family members to prevent depletion of public funds.”

The complaint names six consumers whom it said had received letters from Havassy saying they were liable for a family member’s medical debts, including one to a woman who was making payments to the defendants to pay down a more than $2,000 debt that her deceased son had accrued as an adult.

The firm was incorporated in 2012 as a debt collection law practice, according to the complaint. Most of its clients are health care providers in Lehigh, Northampton and surrounding counties.

Havassy did not return a call for comment, the Intelligencer says.

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