September 8, 2020

Debt Collection Practices: What’s Legal?


Debt collection practices are regulated under federal and Michigan law. The Federal Fair Debt Collection Practices Act (FFDCPA) was enacted to eliminate abusive debt collection. You would be considered a “debt collector” and therefore be subject to the FFDCPA only if: (1) your principal purpose is debt collection; (2) your regular activity is collecting debts owed to third parties; and (3) you create the appearance that the debt is being collected by an outside party when in the process of collecting your own debts.

Since a dental practice’s principal purpose is the provision of dental services, it is neither principally concerned with debt collection nor regularly in the business of collecting debts owed to another creditor. As long as a dental practice attempts to collect, in its own name, debts owed to it arising from the provision of dental services to its own patients, the practice will fall outside the definition of a “debt collector” and therefore not be subject to FFDCPA.

The Michigan Collection Practices Act (MCPA) also restricts practices used in the collection of consumer debt. Since it is unclear whether the provision of dental services creates consumer debt subject to the MCPA, the best practice would be to assume this type of debt be treated as if it is regulated by MCPA. The MCPA broadly defines the entities it covers, prohibiting most creditors from engaging in certain conduct to collect a debt. A dental practice collecting debts arising from the provision of services to patients would be a type of creditor regulated by the MCPA.

Read the complete Q&A in the Journal of the Michigan Dental Association on page 18.

About the author:

Daniel J. Schulte answer questions about health care lawDaniel J. Schulte has more than 25 years of experience helping clients solve tough problems and capitalize on opportunities that require a blend of business and legal expertise. His practice focuses on addressing the legal, business, licensing, and regulatory challenges of health care professionals, organizations, and facilities. Dan understands how legal issues impact business objectives and, as a result, offers his clients practical, results-oriented advice. He is a Certified Public Accountant, former managing partner and current executive committee member of the firm. Dan also serves as co-chair of the firm’s Health Care Practice Group.



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Daniel J. Schulte

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Health Care Law