What Creditors and Medical Service Providers Need to Know About DC’s Amended Debt Collection Law

Creditors and medical service providers should reassess their consumer credit agreements and collection practices in light of a recent amendment to the Washington, D.C. Debt Collections Act, which goes into effect January 1. 2023. The DC Council previously enacted emergency debt collection restrictions in response to the COVID-19 pandemic. These restrictions are now enacted permanently through the new amendment and impose new restrictions on communicating with consumers via email, text and social media.


The amendment adopts a definition of “consumer debt” that is subject to the Debt Collection Act that includes medical debts, and it also defines “consumer debt” as including only debts that are ” more than 30 days past due and payable, unless another period is agreed to by the consumer. Creditors, including medical service providers, should consider updating their agreements with customers to better define at what stage of delinquency a debt will be subject to DC debt collection law.


In addition, the amendment limits the number of communications allowed with consumers, shortens the limitation period, prohibits the collection of debts for which the applicable limitation periods have run, limits the recovery of attorneys’ fees in collection actions and requires debt collectors to provide detailed information in their initial written communication regarding a written off consumer debt, in English and Spanish.


Unlike CFPB Regulation F, the amendment expressly prohibits electronic communication with consumers via email, text message or “private messages via social media platforms”. Subject to numerous restrictions, however, debt collectors may use these methods of electronic communication to obtain The amendment does not clearly state whether creditors collecting uncharged consumer debt may also communicate electronically with consumers to obtain their consent to other electronic communications.


Penalties for violations of DC’s debt collection law include actual damages, costs and attorneys’ fees, punitive damages between $500 and $4,000 per violation, and any other relief the court may deems appropriate.


DC’s debt collection amendments continue a nationwide trend of imposing restrictions on medical debt collection practices, such as the enactment of the No Surprise Law, the recent DC Medical Debt Collection Enforcement Bulletin Consumer Financial Protection Agency, California’s recent ban on certain sales of medical debt and its increase in the minimum income qualification for financial assistance and the recent passage of Arizona’s Proposition 209, which limits the rate interest on medical debt at 3% and imposes various other restrictions on debt collection practices.


For more information, please contact one of the authors or the Manatt professional you work with.


Additional Resources


Update: Implementation of the No Surprises Act and CMS Vaccination Mandate Guidelines for Healthcare Workers – Manatt, Phelps & Phillips, LLP


CFPB Will Enforce Laws Preventing Collection/Reporting of NSA Prohibited Medical Debts – Manatt, Phelps & Phillips, LLP


Assembly Bill (AB) 532 and AB 1020 – Health Care Debt and Fair Billing Policies


Arizona voters approve new limits on consumer debt collection | American banker


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