For more than a decade, a Leominster medical devices company with customers scattered throughout New England filed thousands of debt collection lawsuits in the local courthouse.
In doing so, Regional Home Care Inc., which provides equipment to treat sleep apnea, oxygen deficiency, and other respiratory conditions, became by far the most prolific filer of such cases in that Central Massachusetts court.
Last year, the deluge of cases caught the attention of Attorney General Maura Healey’s office, which ordered RHC to refrain from making any new filings while it investigated the company for possible violation of consumer protection laws.
“Over the last 10 years, RHC has filed more than 12,000 debt collection lawsuits against its customers,” nearly all of them in Leominster, the attorney general’s office said in a court filing last year.
The problem, the attorney general’s office said, was that most of the consumers lived far from the Leominster courthouse, and contesting the allegations would require them to travel long distances or risk losing the cases because they failed to show up.
“When we found out that Regional Home Care was forcing thousands of consumers, many of them low-income, to travel hundreds of miles to defend themselves in illegal debt collection lawsuits, we took immediate action to shut those practices down,” the attorney general’s office said in a statement last week.
The office is now pursuing “monetary relief for consumers harmed by Regional Home Care’s abusive debt collection practices,” and warned that it will go after any company that “exploits vulnerable consumers in this way.”
In a brief interview, Michael Angelini, a lawyer representing RHC, said the company had violated no laws. He said the law cited by the attorney general’s office governing where debt collectors can file lawsuits is not applicable to RHC. That law applies only to professional debt=collection companies, he contended, not companies such as RHC acting on their own to collect debts.
RHC has “a perfect right” to opt for the local court, he said.
Angelini said many of the cases arose when customers failed to return equipment provided by RHC.
“When they’re done they don’t return the machines,” and RCH “goes after them for the value of the machines,” he said.
But the company did stop filing suits against consumers shortly after the attorney general’s office told them to do so early last year, court records show. And the company has dismissed numerous pending cases since then, according to court records.
In a letter to RHC, the attorney general’s office last year cited the federal Fair Debt Collection Practices Act, which it said bans creditors from filing in a court “so far away or inconvenient that the consumer is unable to appear and will likely” lose the case due to failure to appear.
That law, whose provisions are incorporated into the Massachusetts consumer protection act, says a debt collector has only two options when picking a court in which to sue a consumer: the district court where the consumer lives, or the one where the contract for the underlying good or service was signed.
The text of the law says it applies to “any debt collector who brings a legal action on a debt against a consumer.”
RHC’s practice of filing almost all of its suits in Leominster “plainly violates Massachusetts law,” the attorney general’s office wrote to RHC, noting the company had sued customers living more than 100 miles away in such places as the Berkshires and Cape Cod.
A sampling of 20 cases reviewed by the Globe at Leominster District Court showed that defendants in eight of those cases lived in New Hampshire or Maine, in one case more than 250 miles from the courthouse. In those cases, the company demanded payment of amounts ranging from about $250 to more than $1,000, usually for allegedly failing to return company-owned equipment.
Raymond J. Salmon, acting clerk-magistrate of the court, said RHC cases typically accounted for almost all of the 20 or so cases on the docket during weekly debt collection sessions. He said it was unusual for even one defendant in a RHC case to show up. When defendants fail to appear, defaults are issued and judgments are automatically made against them for the full amounts.
It was unclear how much money RHC has collected as a result of the thousands of suits it filed in the Leominster court. Salmon said very few defendants have contacted the court to inquire about defaults, which are reported to credit-rating agencies and negatively affect consumers’ credit scores.
One defendant, who was reached by phone and who asked that his name not be used, said he remembered being contacted by someone about a debt to RHC several years ago and decided to pay the couple hundred dollars tht was demanded to end the matter.
“It was easier to pay the money,” he said.
In a similar case in 2017, the attorney general’s office sued the Lawn Co. for what it said were “abusive and illegal debt collection practices,” leading to a settlement in which the company agreed to change its practices, pay a $150,000 penalty, and pay $143,514 in restitution to customers, according to the attorney general’s office and court filings.
The Lawn Co., which had previously filed more than 1,600 debt collection suits against consumers in the Westborough courthouse, agreed to end that practice, the attorney general’s office and court documents say.