SAN FRANCISCO (CN) – A woman’s credit was ruined and she was unable to secure a mortgage loan due to Kaiser’s illegal debt-collection practices, according to her class action suit filed in U.S. District Court for the Northern District of California in the San Francisco Division.

Theresa Hunter, on behalf of herself and all others similarly situated, sued Kaiser Foundation Health Plan, Inc., USCB, Inc., doing business as USCB America, for violations of the California Consumer Credit Reporting Agencies Act and the federal Fair Credit Reporting Act, violations of the California Unfair Competition Law, negligent and grossly negligent billing practices, negligent and grossly negligent credit furnishing practices, and violations of the California Rosenthall Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act. 

Hunter says that she received medical care from Kaiser defendant in 2012 while she was covered by Medi-Cal, California’s medical assistance program for those of limited financial means.

By law, medical providers are prohibited “from seeking from the beneficiary directly any balance in excess of the amount approved by Medi-Cal … because payment by Medi-Cal to the Medi-Cal provider constitutes payment in full,” the suit states.

California law also prohibits providers or debt-collectors from making reports on alleged Medi-Cal “balances” to credit agencies, according to the action.

As a Medi-Cal provider, Kaiser knew or should have known the Medi-Cal rules and regulations, the suit states, yet it proceeded to ask for payment directly from Hunter and used the services of defendant debt collection agency, USCB, with the result that the unpaid balance, which had ballooned to $9,288 as of Feb. 21, 2018, was reported as a delinquent debt by the three major national consumer credit reporting agencies, the complaint charges.

Hunter says she learned this when she attempted to get a house loan, but her attempts to get the credit agencies to remove the false information herself failed, because Kaiser continued to insist that she was responsible for the charges.

According to the action, Hunter then filed a complaint with the Consumer Financial Protection Bureau in April 2018, which then contacted the three credit reporting agencies, defendant USCB, and the California Attorney General regarding Hunter’s disputed charges.

After receiving a response from USCB, that it was acting under Kaiser’s direction, the Attorney General’s office contacted Kaiser, the suit states. Kaiser’s response reportedly indicated its awareness that Hunter was covered by Medi-Cal at the time she received medical care from Kaiser and that the charges were Kaiser’s responsibility, yet by this time, Hunter had lost her opportunity for obtaining her mortgage loan.

“Upon information and belief, Kaiser regularly attempts to collect money from Medi-Cal beneficiaries like plaintiff concerning medical services covered by Medi-Cal,” the complaint charges.

She seeks actual and statutory damages, punitive damages, and additional damages for class members up to $500,000, an order requiring defendants to disgorge and refund all illegally collected payments for Medi-Cal covered services, injunctive relief to stop further collection of Medi-Cal balances, interest and legal costs.

Hunter is represented by Stephanie R. Tatar of Tatar Law Firm, APC, in Burbank, California, and James A. Francis and John Somilas of Francis & Mailman, P.C., Philadelphia, Pennsylvania.