Attorney general gets tough with debt collector who went after debtors’ relatives

July 08--A Lehigh Valley debt collector has settled a state investigation that alleged it illegally tried to collect medical debts from patients' relatives by misusing a Colonial-era law.

I wrote about the debt collection activities of Hamilton Law Group a few years ago after hearing from a Bangor couple who received dunning letters for their late son's unpaid bills.

The couple, Peg and Bob Mohn, didn't believe it was fair that they should be responsible for another adult's debts. Their son was 47 when he died in 2013. He had no assets, so his parents did not open an estate that creditors could have filed against. But believing they had no other choice and seeking to protect their credit, the Mohns set up a payment plan to pay his bills.

They paid for about seven months, until the state attorney general's office sued Hamilton Law Group and its president, James Havassy, in May 2015 over its collections activities.

The attorney general alleged the firm had improperly used the state's Filial Responsibility Law "to coerce payments" from debtors' relatives.

Havassy declined to comment Thursday. In settling the lawsuit, Havassy and Hamilton Law Group did not admit liability, fault, wrongdoing or the violation of any state or federal law or regulation.

Peg Mohn told me Thursday she is pleased with the outcome.

"It is good news that we don't have to worry about paying the money back and should get restitution," she said.

The Filial Responsibility Law was drafted centuries ago so family members would take responsibility for each other and the government wouldn't have to.

Its use waned when the modern public support system was developed, but the law gained new life in 2012 when the state Superior Court ruled that an Allentown man was responsible for nearly $93,000 in bills from the rehabilitation center that had treated his mother after a car accident.

The law doesn't always make parents and their children responsible for each other's debts, though. The debtor must be indigent and the person targeted for payment must have the ability to pay. That was a key point in the case against Hamilton Law Group, which recently moved from East Allen Township to Whitehall Township.

The attorney general's office said a court order establishing a relative's responsibility for the debt is required before collecting under the law, but Hamilton Law Group used the law "as a general method of ordinary medical debt collection."

The Mohns had received collections letters that said: "Notice is hereby given to you that a spouse, parent and child of an indigent person all have the legal responsibility to care for and maintain or financially assist them. Therefore, in accordance with the Filial Responsibility Law, as we can prove that the debts of your relative were not timely paid as they became due, you are fully responsible for this debt."

The letters sought payment of about $2,000 owed by their son to two physicians offices that had treated him several years before his death.

The attorney general's office apparently had been investigating Hamilton Law Group around the time Mohn contacted me because it saw my column and contacted her to ask that she file a formal complaint.

The attorney general's lawsuit cited six examples, including the Mohns'. One woman received collection notices for an anesthesia bill owed by her adult son, who has his own health insurance. A man was pursued for the cost of his mother's and adult sister's dental services. Another man was pursued for his father's debt to a cardiologist. Two people claimed their credit profiles were "negatively marked."

The settlement, filed Thursday in Commonwealth Court, requires Havassy and his law group to remove any negative reports filed with national credit bureaus.

The settlement also calls for the payment of $366 in restitution; a $3,000 fine; $3,000 in investigative costs; and $65 in court costs. The firm also agreed to stop all collection efforts that were based solely on the Filial Responsibility Law.

Other debtors affected by the firm's collections activities under the Filial Responsibility Law may be eligible for restitution and restored credit profiles if they file complaints with the attorney general's office within 90 days. Complaints can be filed at 877-888-4877 or www.attorneygeneral.gov. Neither the settlement nor the lawsuit notes how much money people paid the firm.

Know your rights if you are contacted by a debt collector. You are entitled to receive paperwork, called a "validation notice," that explains how much you owe and to whom you owe. If you don't believe you owe the money, within 30 days you should write a letter to the debt collector explaining that.

You can file complaints about debt collectors with the attorney general; Federal Trade Commission (202-326-2222, ftc.gov); and Consumer Financial Protection Bureau (855-411-2372, consumerfinance.gov).

The Watchdog is published Thursdays and Sundays. Contact me at [email protected], 610-841-2364 or The Morning Call, 101 N. Sixth St., Allentown, PA, 18101. I'm on Twitter @mcwatchdog and Facebook at Morning Call Watchdog.

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