State Collection Service on Your Credit Report: What to Know

State Collection Service, Inc. (SCS) is a Madison, Wisconsin healthcare debt collection agency founded in 1949 with a 2015 federal judgment awarding a consumer $1,001 in statutory damages and attorney fees for FDCPA violations.

The agency has logged 71 BBB complaints in three years, including a documented complaint where SCS verbally agreed to a $2,751 settlement on a recorded line and then increased the price to $7,500 when the consumer called back to pay.

SCS collects exclusively for healthcare providers and is a member of the HFMA Medical Accounts Receivable Resolution Task Force.

Who Is State Collection Service, Inc.?

State Collection Service, Inc. is a third-party healthcare debt collection agency founded in 1949 in Madison, Wisconsin. The company holds BBB accreditation and also operates offices in Beloit and Milwaukee, Wisconsin, and Chicago, Illinois. In 2008, SCS merged with Protocol Financial Service, Inc., a Minnesota collections business.

Who Does SCS Collect For?

SCS focuses exclusively on healthcare receivables. Confirmed clients from BBB complaint documentation include Fairview Health Services and M Health Fairview, with SCS providing early-out and bad-debt collection services to hospitals, medical clinics, physicians, and specialists across the country.

Two Documented Federal Cases

A 2015 decision in the Northern District of Illinois, Eastern Division, awarded a plaintiff $1,001 in statutory damages plus reasonable attorney fees for State Collection Service’s violations of the FDCPA.

A 2016 civil case alleged SCS called a consumer during inconvenient hours and used unconscionable means of debt collection. The court acknowledged the plaintiff’s right to bring the charges but found at trial that no violations had been committed.

Common SCS Complaint Patterns

SCS’s BBB complaint record surfaces specific recurring issues tied to its collection conduct.

• Verbal settlement agreement subsequently increased: A documented BBB complaint describes a consumer who reached a verbal agreement of $2,751 on a recorded line. Within 24 hours the consumer called back to pay and was told the amount had increased to $7,500. SCS attributed the discrepancy to the creditor retaining final settlement authority.
• Medical bill amounts that increase unexpectedly: A documented complaint describes SCS quoting a $144 medical bill that increased to $244 when the consumer attempted to pay online.
• Collecting on debts consumers do not owe: The most common BBB complaint category describes SCS collecting balances consumers dispute as not belonging to them or not matching any service they received.
• Reporting large numbers of accounts for a single consumer: A documented BBB complaint describes SCS reporting 30 separate accounts totaling $29,000.74 for a single consumer.

What SCS Cannot Do Under Federal Law

• Make verbal settlement representations and then retract them: If SCS quoted a settlement amount on a recorded line, that representation may be a binding statement under FDCPA Section 1692e’s prohibition on false or misleading representations.
• Misrepresent the amount owed: FDCPA Section 1692e(2) prohibits misrepresenting the amount of a debt. A balance that increases unexpectedly when the consumer attempts to pay raises this concern.
• Continue collecting after a written validation request: All collection activity must pause until SCS produces documentation.
• Report inaccurate information to credit bureaus: The FCRA requires accurate and complete reporting. Accounts a consumer disputes as not belonging to them are FCRA accuracy violations.

Wisconsin Consumer Act

Wisconsin residents have additional state-level protections under the Wisconsin Consumer Act (WCA), which applies more broadly than the FDCPA — the WCA covers original creditors as well as third-party collectors. File complaints with the Wisconsin Department of Financial Institutions alongside any CFPB complaint.

Medical Debt Reporting Protections

Credit bureau voluntary policy changes effective 2023 removed paid medical balances and balances under $500 from credit reports. Dispute any such entry directly with all three bureaus.

Minnesota residents have an additional protection: Minnesota law effective October 2024 prohibits reporting any medical debt to credit bureaus. A documented SCS BBB response confirms the agency does not report medical debt for Minnesota consumers under this law.

Verify Before Paying SCS

Send a certified validation letter demanding the original provider’s name and contact information, the original itemized bill with CPT codes, the insurance Explanation of Benefits, proof that insurance was billed before the account was referred to SCS, and written confirmation of the exact balance or settlement amount that would satisfy the debt.

If SCS has verbally quoted a settlement amount on any call, request written confirmation of that amount before making any payment.

How to Check Your Credit Report

Pull all three reports at AnnualCreditReport.com and look for State Collection Service or SCS as the furnisher. Confirm the original provider, service date, and balance for each entry. Paid balances and balances under $500 should not appear. Minnesota residents should dispute any SCS medical entry under the 2024 state prohibition.

How Long Can SCS Legally Pursue the Debt?

Wisconsin allows six years on most written contracts including medical service agreements. The state where you received treatment controls the statute.

Your Options for Resolving the Account

• Get any settlement agreement in writing before paying: The documented $2,751 to $7,500 increase shows verbal agreements with SCS may not be honored. Demand written confirmation on SCS letterhead before any payment.
• Dispute accounts you do not recognize: If SCS is reporting accounts from a provider you did not visit, dispute each entry with all three bureaus and file a CFPB complaint.
• File a Wisconsin Department of Financial Institutions complaint: The Wisconsin Consumer Act provides state enforcement authority over SCS as a Wisconsin-licensed collector.
• Request itemized documentation for any balance that increased: If the amount SCS presents differs from what you were previously quoted, demand a written itemized statement before engaging further.

How to Contact State Collection Service

Handle all communication in writing. Send disputes by certified mail with return receipt requested:

• Address: State Collection Service, Inc., 2509 S Stoughton Road, Madison, WI 53716
• Phone: (800) 477-7474 or (877) 677-4862

Bottom Line

State Collection Service has a 2015 federal judgment for FDCPA violations, a documented complaint for verbally agreeing to a settlement and then more than doubling it, and a pattern of collecting accounts consumers do not recognize.

Any verbal settlement with SCS should be confirmed in writing before payment. If SCS is reporting accounts you do not recognize, dispute with all three bureaus and file complaints with the CFPB and Wisconsin Department of Financial Institutions.

If an SCS account is on your credit file, the right move depends on whether the original provider is one you recognize, whether insurance was properly applied, and whether any settlement amount SCS has quoted is documented in writing.