A Colorado Springs woman has prevailed over a medical debt collection company after the Denver-based federal appeals court agreed Medicredit, Inc. violated consumer protection law by contacting her after she expressly asked for the calls to stop.

On Tuesday, a three-judge panel for the U.S. Court of Appeals for the 10th Circuit upheld a lower court’s decision in favor of Elizabeth Lupia, and found that Medicredit had not shown that its company policies were sufficient to prevent unauthorized calls to debtors.

The ruling notably determined that a single call that went to voicemail was sufficient grounds for a federal consumer protection claim.

“It was just one day. Or that’s how Medicredit, the debt collection agency, tells it,” wrote Judge Gregory A. Phillips in the panel’s August 17 opinion. “On a Monday, Medicredit received a letter from a consumer, Elizabeth Lupia, demanding that it cease calling her about an unpaid medical debt. The next day, on Tuesday, before Medicredit processed the letter, it again called Ms. Lupia regarding the debt.”

But for Lupia, he added, “it was about more than just one day.”

After an April 2017 medical procedure in Colorado Springs, the hospital billed Lupia for the balance that her insurer did not pay. After Lupia refused to pay, the hospital turned to Medicredit to collect on the debt, which attempted to do beginning in April 2018.

At the heart of the dispute was the three-day period that elapsed between when Medicredit received Lupia’s letter requesting all telephone calls to “cease immediately,” and when it finally processed the request.

Lupia sued Medicredit for violating the Fair Debt Collection Practices Act, which Congress enacted to eliminate abusive debt collection practices. The law prohibits a debt collector from contacting someone who has communicated in writing that they want the contacts to cease.

The law also requires collection agencies to pause their attempts to collect on a debt if it is under dispute, as it was in Lupia’s case.

“All that the debt collector had to do was not call to comply with the FDCPA,” said Dan Vedra, a consumer protection lawyer in Denver who reviewed the 10th Circuit’s decision. “The debt collector violated the law by calling her anyways, but claimed she suffered no ‘injury in fact.’  The debt collector is like a driver who gets a speeding ticket whose only defense is ‘well, I didn’t kill anyone’.”

Initially, Medicredit asserted Lupia did not have legal standing to sue because she had not suffered any harm from the unanswered call Medicredit placed to her on May 8, 2018. U.S. District Court Senior Judge Robert E. Blackburn, who issued the original decision siding with Lupia, said she had, in fact, suffered an injury – namely an invasion of privacy.

On appeal, Medicredit contended it had made a genuine error in contacting Lupia, given that she sent her letter to the company’s Post Office Box and it typically takes three business days to process mail and put a hold on an account if necessary. The company also argued to the 10th Circuit that a three-day processing time was reasonable, and that Blackburn was wrong in concluding that no jury “could find a procedure which inexplicably allows a three-day lag between receipt of a debtor’s dispute and logging that dispute into the system” amounted to a reasonable means of preventing erroneous contact.

But the 10th Circuit agreed with Blackburn and noted that Medicredit had refused to provide details about its mail handling policies at first, only to introduce its evidence much later. The panel declined to consider Medicredit’s late response to the allegations.

One member of the panel, Chief Judge Timothy M. Tymkovich, asked Lupia’s lawyer at oral arguments why a three-day lag was unreasonable.

“Is a debt collector required to have, like, 24/7 on-call mail processors?” he wondered. 

Attorney Russell S. Thompson IV responded that it was difficult to judge the reasonableness because the company had not disclosed its mail-handling procedures. But in general, he said, “contacting the consumer is an invasion of privacy and that’s what Congress meant to avoid here: invading this consumer’s privacy of being called at home and harassed at home when specifically asked not to do it.”

Neither Thompson nor attorneys for Medicredit responded to a request for comment on the decision.

Last year, the Colorado Attorney General’s Office disclosed that consumer complaints increased by 7.8% between 2018 and 2019, with the second-largest category of complaints involving harassment from debt collectors.

Steve Berken, a bankruptcy lawyer with Berken Cloyes in Denver, praised the decision as being good for consumers, who tend to “put up with abusive collection efforts” and not complain.

“The decision well could have gone for Medicredit. For years, courts have held that damages require something ‘concrete’,” he said. “The 10th Circuit embraces a more expansive view, and one that includes a telephone call as intrusive.”

The U.S. Supreme Court has issued multiple decisions – including TransUnion, LLC v. Ramirez in June 2021 – ruling that a violation of consumer protection law is not enough for a legal claim without an actual harm to the consumer.

Vedra, the consumer protection lawyer, said that the size of the harm should determine the damages the consumer receives, and not whether they can have their day in court to begin with.

“The 10th Circuit’s opinion here stands in stark contrast to those courts who wish to dismiss consumer claims on jurisdictional grounds,” he said, “even when the consumer can articulate the violation of a right protected by Congress.”

The case is Lupia v. Medicredit.