On June 2, 2021, Nevada enacted a new law regarding medical collections (SB 248), which went into effect July 1, 2021, and, to put it nicely, left much to be desired in terms of clarity. In an effort to better understand the enigma that is SB 248, the Consumer Relations Consortium (CRC) sent nine questions to the Nevada Financial Institutions Division (NFID) and received responses on June 25, 2021.
The questions and responses are shown below in their entirety. While useful, it is important to note that these responses are not official interpretations.
Questions and Answers:
CRC Question #1: What does “taking any action to collect a medical debt” mean? It is not defined, yet it appears in multiple places and impacts various concepts in SB 248.
NFID Response: Any action would include any communication via telephone or mail, not initiated by the medical debtor, reporting to credit reporting agencies any part of the collection process. An agency cannot communicate with a medical debtor orally or in writing until the notification letter required by SB248 is sent. The process would be: you are assigned the debt, you mail out the notice required by SB248, you must wait 60 days, and then you can proceed to attempt to collect the debt as you normally would and in compliance with all other provisions in SB248, NRS and NAC 649, and FDCPA.
CRC Question #2: Consumers often have questions about medical bills and will likely call the collection agency to get answers. Is responding to a medical debtor’s non-payment-related inquires, such as billing, service, or insurance questions, during the 60-day notice period “taking an action to collect a medical debt”? How should an agency respond if asked about what happens after the 60-day period? If an agency intends to begin collections and/or credit reporting after the 60-day notice period, is it permitted for the agency to explain that to the consumer? Must they instead refuse to discuss what happens after as that may be interpreted as “action to collect?”
NFID Response: A debtor may initiate the contact for validation and/or to make voluntary payment or to ask questions. All provisions of SB248 applies including any disclosures required.
CRC Question #3: The mini-Miranda is a required disclosure under the Fair Debt Collection Practices Act (FDCPA) and provides debtors with important information. Is providing the mini-Miranda in the 60-day notice letter “taking an action to collect a medical debt”? Are collection agencies permitted to include the mini-Miranda in the 60-day notice? Can they recite it on telephone calls during the 60-day window (as required by the FDCPA)?
NFID Response: The FDCPA language and SB248 language may be combined in the 60-day notification letter. Suggested language for the letter, in addition to the requirements in SB248 and FDCPA:
“This is a notification that ABC Collection Company will not take any actions to collect this debt within 60 days from the date of this letter. Any payments made toward the debt during this timeframe are considered voluntary and will not void the 60-day notification period described above.
We will take no other action to collect this debt until 60 days from the date of this letter”
All notifications to Nevada consumers need approval from NFID.
CRC Question #4: Can the 60-day notice include the validation notice required by 15 USCA §1692g of the FDCPA, which requires disclosures to be sent within the initial communication about a debt, or within five days of the initial communication? If not, is the 60-day notice not considered an action to collect a debt? How can a debt collection agency reconcile federal requirements with the requirements of SB 248
NFID Response: SB248 does not replace FDCPA. SB248 is in addition to FDCPA. The FDCPA language and SB248 language may be combined in the 60-day notification letter.
CRC Question #5: Can the 60-day notice be included in the new Model Notice published by the CFPB in Regulation F, which goes into effect on November 30, 2021?
NFID Response: yes
CRC Question #6: What should a collection agency do if a voluntary payment is mailed during the 60-day notice period? Must the disclosures of Section 7.5 be provided via letter? Can the agency call the debtor to provide those disclosures? If so, how long must a collection agency wait before depositing a payment?
NFID Response: A medical debtor may make a voluntary payment. SB248 must be complied with regarding the disclosures. Suggestion to add SB248 voluntary payment verbiage on the agency’s website and to mail a letter confirming receipt of a voluntary payment with the required language and the required disclosures.
CRC Question #7: May a debt collection agency that will not report the medical debt to a credit bureau comply with Section 7.5 by stating that the debt will not be reported or omitting that disclosure instead of saying the debt “will not be reported to any credit reporting agency during the 60-day notification period”?
NFID Response: Pursuant to Section 8.5, the protections set forth in sections 7, 7.5 and 8 of SB248 are for the benefit of medical debtors and cannot be waived. The disclosure must be made to the debtor. Suggested language:
“Pursuant to NRS 649, medical debt cannot be reported until 60 days from the date of the letter. However, ABC Collection agency does not report to credit reporting agencies.”
CRC Question #8: Does this Law apply only to accounts placed after July 1, 2021, with letters sent on or after the effective date? Is an agency required to send a 60-day notice for accounts that were placed and worked prior to the effective date?
NFID Response: SB248 becomes effective July 1, 2021. NFID cannot provide legal advice, however, NFID will not enforce SB248 on accounts that existed prior to the effective date.
CRC Question #9: If a debtor disputes the debt or requests validation within the first thirty days, the FDCPA requires an agency to provide validation before resuming collections. Can the agency provide the validation within the first sixty days, or should they wait until after the notice period has expired before validating?
NFID Response: SB248 does not replace FDCPA. SB248 is in addition to FDCPA. If the medical debtor initiated the communication, the validation can be mailed
Although multiple parties filed a lawsuit to stop the law from going into effect, the court won’t weigh in on the suit until late July. Therefore, as it stands right now, collection agencies have the unpleasant task of figuring out just how to comply with SB 248's nebulous requirements. While the responses from NFID may be helpful, it is essential to note that these responses are not official interpretations and should not be considered part of the law. Any collection agency or other accounts receivable industry collecting Nevada medical debt should pay serious attention to their compliance efforts in Nevada. SB 248 will require updates to numerous policies, procedures, and training. Since SB 248 is ambiguous and conflicts with other laws, entities subject to SB 248 should ensure that any updates to internal protocols are captured in a policy and procedure. We will keep you up to date on the progress of the pending lawsuit.
About the Consumer Relations Consortium
The Consumer Relations Consortium (CRC) is a membership group for forward-thinking organizations that wish to influence the direction of collections compliance, legal strategy, and regulatory policy. The CRC is comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers, and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors, and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC is managed by The iA Institute.
Learn more at www.crconsortium.org.
About the iA institute
The iA Institute is a media company that provides news, education, events and connection for professionals in consumer finance. The iA team believes the value of your time and investment in our content should be undeniable, so we thoughtfully design everything we do with a focus on the details that make a difference. Our initiatives include the flagship website and newsletter insideARM; the Consumer Relations Consortium (CRC) and iA Innovation Council membership groups; the iA Research Assistant and Case Law Tracker premium subscriptions; the iA Strategy & Tech digital conference; and the uniquely engaging annual Women in Consumer Finance event. iA is a certified Woman-Owned business.
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