Leominster company that used deceptive debt collection practices reaches $2.5 million settlement with Attorney General’s Office
LEOMINSTER – Attorney General Andrea Campbell announced Thursday that her office has reached a $2.5 million settlement with Regional Home Care, Inc., a Leominster-based medical equipment supplier and home service provider, for engaging in deceptive debt collection practices and charging MassHealth members for balances they either didn’t owe, or were already paid for by MassHealth.
“Regional Home Care engaged in illegal practices at the expense of vulnerable consumers across Massachusetts who depend on this medical equipment for their health and livelihood,” Campbell said in a statement. “As a result of this settlement, thousands of consumers who were harmed by this company’s actions will directly benefit, and our office will continue to protect consumers from predatory practices and scams.”
Regional Home Care sells/rents equipment such as oxygen tanks and Continuous Positive Airway Pressure devices to treat respiratory ailments like oxygen deficiency and sleep apnea. The company also serves low-income consumers enrolled in MassHealth, the Attorney General’s Office said.
The Attorney General’s Office filed an assurance of discontinuance in Suffolk Superior Court with Regional Home Care which alleges that the company engaged in predatory debt collection practices which included making misleading threats to consumers about the consequences of not paying their bills. The assurance of discontinuance also says the company failed to inform consumers of their legal right to obtain validation and dispute their debts.
In addition, the Attorney General’s office alleges that the company has filed over 13,000 debt collection lawsuits against consumers in the Leominster District Court, 99% of whom were not local to Leominster.
“This practice is not only illegal, but hinders debtors’ access to justice because of the long distances they are forced to travel to defend themselves in court hearings,” Campbell said in a statement. “As a result, Regional Home Care obtained court judgments more easily against consumers who were unable to travel to Leominster to contest their cases, and consumers who were able to travel were forced to incur unnecessary travel expenses and take time off work to litigate their cases.”
According to the Attorney General’s office, the settlement also alleges that Regional Home Care collected and/or attempted to collect charges from MassHealth members in excess of the amounts paid by MassHealth.
The settlement requires Regional Home Care to pay $500,000 to the state and vacate every consumer judgement it has thus far obtained against consumers in Leominster District Court (unless the consumer already resides in Leominster or the judgement has been satisfied). According to the Attorney General’s Office, $2.1 million worth of judgements are expected to be vacated. The company is also required to refund MassHealth members over $9,000.
Lastly, the company is also now required to follow both state and federal laws:
“Under the terms of the settlement, Regional Home Care will also come into compliance with federal and state laws and change its business practices and reporting requirements,” Campbell said. “This will include filing any lawsuits against consumers in their respective judicial district, making at least three attempts to retrieve equipment or obtain payment before initiating litigation against consumers, and not billing, collecting, attempting to collect or seeking payment from MassHealth members for medical equipment or return shipping costs for medical equipment, even if those members have stopped using and have not returned equipment.”
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