The Consumer Financial Protection Bureau (CFPB) recently issued a report shedding light on the difficulties American families experience when confronted with medical debt collection. The CFPB received thousands of consumer complaints about medical debt collection in 2022, prompting further investigation into these practices.
The report highlighted key findings:
- Medical debt collectors may violate federal law when they attempt to collect bills that are not actually owed or are the wrong amount. This includes instances in which a collector is collecting charges for services the patients never received, more expensive versions of services than what were actually provided – often called “upcoding”, or amounts based on rates that are inconsistent with applicable state law.
- States are generally able to enforce their own debt collection laws to protect consumers. Inaccuracies in the collection, furnishing, and reporting of medical bills are common, so state restrictions on these practices are unlikely to result in less accurate or robust collections or credit reporting.
In response to these findings, the CFPB outlined steps it is taking to ensure that medical debt collectors follow the law, including the Fair Debt Collection Practices Act and the Fair Credit Reporting Act:
- Supervision and enforcement efforts: The CFPB has found numerous violations during recent examinations of debt collectors and taken enforcement actions where appropriate.
- Reminding entities about their obligations: The CFPB issued a bulletin reminding debt collectors and credit reporting companies of their legal obligations under the No Surprises Act, and confirmed that debt collectors may be violating the law when they attempt to collect unlawful nursing facility debts.
- Support for state-level actions: States can enforce both the Fair Debt Collection Practices Act and the Fair Credit Reporting Act against persons covered by the Consumer Financial Protection Act.
- Education and outreach activities: The CFPB provides consumers with five sample letters to use when interacting with debt collectors.
Read the report, Fair Debt Collection Practices Act CFPB Annual Report 2023, here.
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