A statewide class action, with possible national reach, has been filed in Indiana against Collection Specialists, Inc., collection attorney Alan R. Miller, Saint John's Health System and its director of accounts receivable, Philip D. Hilger. The action is brought on behalf of all individuals who have been subject to alleged illegal, intimidating, misleading and deceptive collection practices on the part of the named collectors. The action is brought under the federal Fair Debt Collection Practices Act, Indiana state law on statutory deception and breach of contract and the federal Racketeer Influenced
and Corrupt Organizations (RICO) Act and seeks actual, enhanced, treble and statutory damages as well as injunctive and declaratory relief.

This action arises from the alleged unfair, deceptive, misleading and illegal collection practices engaged in by the named collectors. According to the
consumers, the collectors have engaged in a systematic practice that violates both state and federal law. The core allegation made by consumers is that
the collectors have conspired to assess illegal fees in their efforts to collect debts from consumers and have engaged in intimidating and harassing practices, including the filing of unwarranted civil actions against consumers. Specifically, for the claim filed under the Fair Debt Collection Practices Act, the consumers allege that Collection Specialists and Alan Miller in charging what are in effect, flat rate fees in their efforts to collect debts for St. John’s, are violating the Act because they charged fees that were far in excess of actual reasonable costs. Under the Act, such fees as postage, copying, telephone service, mileage and similar costs are permitted. However, the consumers allege that both Collection Specialists and Mr. Miller added fees in excess of $400 each, clearly eclipsing the fees that would have been incurred and permitted under the act.

Consumers also allege that St. John's, the original creditor in this matter, violated Indiana law by intentionally misrepresenting the amount of debts when assigning such debts to professional debt collectors, such as Collection Specialists and Mr. Miller. According to consumers, when St. John's assigns debts to collectors, they intentionally add a collection fee that is not part of the outstanding principal debt. This has the effect of misleading third parties, who may be attempting to assist in collecting the debt, into believing that the principal is higher than it actually is. This also is transferred to consumers, who are presented with unlawful fees when collection attempts are made. Under Indiana law, any false or misleading written statement made in an effort obtain money constitutes actionable deception. These actions also, according to the consumers, constitute a breach of contract under Indiana law.

The consumers final allegation is that these activities amount to racketeering under the Federal RICO statute. The consumers assert that the collectors compose an enterprise operating in Indiana which consists in one part of St. John's and its agent Mr. Hilger, and in another part of Collection Specialists as a debt collection agency and their attorney, Mr. Miller. The consumers allege that these parties are associated in fact, act in concert, and engage in activities aimed at furthering each other's financial interests. Through the U.S. Mail, the consumers claim that the collectors forward false, misleading, deceptive and fraudulent notices to consumers. This allegedly constitutes, according to the consumers, mail fraud. The consumers claim that the repetitive nature of these actions brings the collectors conduct into the realm of organized racketeering.