[co-author: Stephanie Kozol]*
The Washington State Attorney General’s (AG) Office filed a lawsuit against Renton Collections Inc., accusing the company of violating Washington’s Collection Agency Act by failing to include certain disclosures in their collection letters to debtors.
The Washington State Legislature amended the Collection Agency Act in July 2019 to, among other things, require companies that collect medical debt from debtors in Washington to include “a statement that informs the debtor of his or her right to request the original account number, the date of the last payment, and an itemized statement” with their first written notice to such debtors.
Filed on March 5 in King County Superior Court, the Washington AG’s lawsuit contends that each nonconforming notice equates to a per se violation of the Washington Consumer Protection Act and that “[b]y sending first written notices without the disclosures required by [the Collection Agency Act], the company “engaged in unfair methods of competition in trade or commerce that affected the public interest in violation of [the state Consumer Protection Act]”, which constitutes a separate source of potential liability. According to AG Nick Brown, Renton Collections recovered more than $35 million while ignoring Washington’s disclosure law, and made more than $7 million in commissions doing so.
The Washington Consumer Protection Act allows for potential penalties of up to $7,500 per violation and also requires reimbursement of the AG’s costs and fees. Consequently, under the Washington AG’s theory of liability, the company is purportedly liable for up to $15,000 in penalties per nonconforming notice. Washington will also be seeking injunctive relief.
Why It Matters
The Washington AG’s lawsuit against Renton Collections underlines the importance of maintaining a regulatory compliance program that focuses on relevant changes in state law as well as baseline federal requirements.
*Senior Government Relations Manager
