Regulators work to stop unlawful debt collection from families

Nursing homes and debt collectors are flouting a law that prohibits them from requiring friends and family of care home residents to shoulder the costs of the facilities, according to a federal report issued Thursday. The Consumer Financial Protection Bureau said friends and family members have had to declare bankruptcy, had their wages garnished and their homes repossessed after signing unenforceable contracts called “admission agreements” with nursing facilities.

As a result, they have been held liable as third parties for their loved ones’ nursing home stays. Distraught relatives, in sometimes emotional testimony, and lawyers for families told regulators Thursday about collectors seeking tens of thousands of dollars — even hundreds of thousands — in unpaid nursing home fees.

An increase in complaints led the agency and Department of Health and Human Services’ Centers for Medicare and Medicaid Services to send a letter to nursing homes and their debt collectors reminding them to follow the law.

Rohit Chopra, director of the consumer bureau, held a virtual public hearing with advocates, nursing home administrators and people affected by what they say are unlawful debt collection practices.

Anna Anderson, a consumer protection lawyer in New York, said she has seen hundreds of lawsuits filed against friends and family of care home residents that seek reimbursement for of facilities’ costs. “It’s not only routine” she said. “It’s a deeply troubling practice.”

She said it “puts families in a position of having to choose between protecting their family members at nursing facilities or putting themselves in a position of financial ruin.”