Consumer complaint received 2025-08-22 00:00:00
Product: Debt collection — Other debt
Issue: Attempts to collect debt not owed — Debt was already discharged in bankruptcy and is no longer owed
Company: Healthcare Finance Direct LLC.
State: NM

Complaint narrative:
UPDATED XX/XX/XXXX To Whom It May Concern, I am filing this response regarding an ongoing collection attempt tied to my former treatment with XXXX XXXX XXXX, which filed for XXXX XXXX XXXX on XX/XX/XXXX, and ceased operations by XX/XX/XXXX. At the time of their closure, my orthodontic treatment was still incomplete, and the retainers I prepaid for were never delivered. Despite XXXX failure to deliver on their obligations, I received a collection notice from XXXX, a third-party agency acting on behalf of XXXX, demanding payment of {$1000.00}. I have never communicated with XXXX, was not given an itemized explanation of the debt, and I dispute the validity of the amount in full. 

In addition to this, XXXX heavily marketed a so-called " Lifetime Smile Guarantee, which promised continued support and refinement if results were not maintained. This promise was false and misleading. The company shut down without honoring this advertised benefit, leaving me with no recourse, despite paying under the belief that this protection would be available. This constitutes a clear violation of 15 U.S.C. 45 ( a ) ( 1 ) of the Federal Trade Commission Act, which prohibits deceptive business practices, including false advertising and misrepresentations of service guarantees. 

Furthermore, XXXX never provided me with any documentation in advance identifying where in the contract this so-called XXXX XXXX could be voided. My treatment was not completed, yet the company and its collection agents continue to pursue me as if services were fully rendered. Adding to the deception, the contract itself was not even provided to me until after my credit had already been hit with a derogatory collection markan action that demonstrates bad faith and violates both consumer protection laws and fair credit reporting standards. 

Critically, XXXX reported this alleged debt to the credit bureaus before ever sending me a bill or validation notice. This violates the Fair Debt Collection Practices Act ( 15 U.S.C. 1692g ), which requires collectors to provide written validation of a debt within 5 days of first contact, and prohibits collection activity ( including credit reporting ) until validation is given. The Consumer Financial Protection Bureau has explicitly confirmed this in its official bulletin, stating : > A debt collectors reporting of a debt to a consumer reporting agency is a collection activity that must not be done without providing the validation notice and giving the consumer an opportunity to exercise their rights. ( CFPB XXXX XXXX, XX/XX/XXXX ). 



Courts have also upheld this interpretation. For example, in XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX XXXX XXXX. XXXX XXXX ( XXXX XXXX XXXX ), affd, XXXX XXXX XXXX XXXX ( XXXX Cir. XXXX ), the court held that reporting a disputed debt to a credit bureau without first validating it constituted collection activity under the FDCPA. Similarly, in XXXX v. XXXX XXXX. XXXX, XXXX XXXX XXXX XXXX XXXX XXXX ( XXXX Cir. XXXX ), the Sixth Circuit recognized that credit reporting is a powerful tool used by debt collectors and is indeed subject to the FDCPAs protections.

At the state level, XXXX XXXX courts have also emphasized strong consumer protections under the Unfair Practices Act ( NMSA 1978, 57-12-1 et seq. ). In XXXX XXXX XXXX XXXX, XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX ), the XXXX XXXX XXXX XXXX held that businesses engage in an unfair or deceptive trade practice when they make representations that may, tend to, or do deceive or mislead any person. XXXX marketing of a Lifetime Smile Guarantee without disclosing how or when it could be voided, and its subsequent failure to honor that promise, clearly falls within this prohibited conduct under XXXX XXXX law. 

Therefore, XXXX and XXXX acted unlawfully by placing a derogatory mark on my credit file before ever providing me with proper notice or validation of the debt. This deprived me of my statutory right to dispute the debt before damage to my credit was done. 


-- - Appropriate and Requested Remedial Actions 1. Immediate Removal of Derogatory Credit Reporting Under the Fair Credit Reporting Act ( FCRA ), 15 U.S.C. 1681s-2 ( a ) ( 1 ) ( A ), furnishers of credit information must not report information they know or should reasonably know is inaccurate. There is no valid debt owed for services that were never rendered, and continued reporting of this balance is inaccurate, misleading, and legally unenforceable. I request that all derogatory marks related to this account be deleted from my credit file, pursuant to FCRA 1681i ( a ) ( 5 ) ( A ).

2. Cease and Desist Collection Efforts Attempting to collect a debt based on undelivered services and false promisesparticularly when the business is bankruptis a violation of the Fair Debt Collection Practices Act ( FDCPA ), 15 U.S.C. 1692e ( 2 ) ( A ), which prohibits false representations about the legal status of a debt. XXXX has never called me, and the only notice I received was an unsolicited email with no supporting documentation, violating FDCPA 1692g, which requires clear validation of debt upon first contact. I formally request a cease of all collection efforts and consider any future attempts unlawful until validation is produced.

3. Full Refund for Undelivered Services and Misrepresented Guarantees XXXX failed to complete treatment, withheld funds for undelivered retainers, and marketed a Lifetime Guarantee they never intended to honor. These failures constitute : Breach of Contract Unjust Enrichment Failure of Consideration ( Restatement ( Second ) of Contracts 237 ) Deceptive Practices under the FTC Act Violations of the XXXX XXXX Unfair Practices Act ( XXXX XXXX, XXXX et seq., as applied in XXXX XXXX XXXX XXXX XXXX XXXX ). 


Because I must now seek care from another aligner company to complete treatment, I am incurring new out-of-pocket costs that should have been covered by XXXX original contract and falsely advertised guarantees. I request a full refund for all services not rendered, including the undelivered retainers. 


-- - Conclusion and Relief Sought In summary, I respectfully ask that the CFPB take the following actions : Instruct XXXX and/or XXXX to remove all derogatory marks related to this debt ; Order a full cease of collection activity against me ; Ensure a complete refund is issued for the undelivered treatment and retainers ; Investigate XXXX advertising and partner billing practices, particularly the misuse of Lifetime Guarantee language, the failure to disclose any lawful basis for voiding such a warranty, and the post-bankruptcy sale or transfer of consumer accounts. 


Thank you for your attention to this matter and for protecting consumers from exploitative, deceptive, and unlawful financial practices. 

Sincerely, XXXX XXXX

Company response to consumer: Closed with explanation