Creditor Fined $10k For Collecting Debts Using Different Name

The Connecticut Department of Banking has reached a settlement with a creditor that was using a different name under which to collect unpaid debts for not having a collection license that will see the company pay a fine of $10,000 and stop collecting debts in the state unless it is using the “true name of the business.”

A copy of the consent order against Laboratory Corporation of America, more commonly known as LabCorp, can be accessed by clicking here.

Ultimately, it was a newspaper report in which a Connecticut resident contained about receiving bills from a company called “LCA Collections” in an attempt to collect $314 for a COVID-19 test that was administered in May 2020. The Banking Department sent a letter to LabCorp indicating that it appeared as though the company was operating in the state without the proper license, to which the company responded that “LCA Collections” was not a consumer collection agency; it was an in-house division of LabCorp and only collected LabCorp debts.

But the Department ruled that the company was in violation of Section 36a-647-6(15) of state regulations, which “prohibits the use of any business, company or organization name other than the true name of the creditor’s organization.” The company argued that courts have granted motions to dismiss filed by LabCorp under the Fair Debt Collection Practices Act for using “LCA Collections.”

Rather than proceed with enforcement proceedings which could result in fines of up to $100,000 per violation, the company opted to settle.

Along with assurances that the alleged violations will not occur again in the future, the company agreed to pay $10,000 and “cease and desist from collecting debts in this state under the ‘LCA Collections’ or any name other than the true name of the business, company, or organization” in Connecticut.

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