An Overview of the CFPB & State Initiatives to Stop Wrongful Medical Bill Collections

Why this will interest you

This is crucial because many consumers have suffered due to incorrect and unverifiable medical bills on their credit profiles. We should should ensure they aren’t unfairly burdened with debts they don’t rightfully owe. At Credilife®, this is the kind of work we specialize in. After conducing a comprehensive evaluation of your personal credit profile, we strive to ensure the accuracy and verifiability of reported information, especially that which is negatively impacting your credit profile. We also identify areas for improvement and provide tailored recommendations for credit building and account management. Our ultimate objective is to empower our clients with successes that pave the way for a brighter and more secure financial future.

Important News from the Consumer Financial Protection Bureau

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a report that talks about the problems many American families face when debt collectors chase them for medical bills they might not even owe. The report focuses on the 8,500 complaints that people, including servicemembers and older adults, made in 2022 about medical debt collections. It also explains how the CFPB and states are working together to stop the collection of wrong or inaccurate medical bills. Additionally, it mentions what’s happening in the broader debt collection market and what the CFPB and other federal agencies are doing to protect people from unfair and tricky debt collection practices.

Why Is This Important?

Lots of people are being hounded by debt collectors for medical bills, and this report shines a light on the problem of collecting bills that are wrong or not even owed. The CFPB has previously found that the collection of medical bills is often filled with mistakes.

What the Report Revealed

In 2022, the CFPB got thousands of complaints about medical debt collection. People were upset because they were being asked to pay bills that were already paid, were not really their responsibility, or were for the wrong amount. Sometimes, collectors started chasing these bills long after the medical services were provided, even decades later. Some collectors even put these bills on people’s credit reports without asking them first. Surprisingly, even servicemembers and older adults faced these problems, even though they usually have insurance and access to reduced-cost healthcare.

What You Need to Know

  • Collecting medical bills that are not owed or getting the amount wrong may break the law. This report says that it might go against the Fair Debt Collection Practices Act or the Consumer Financial Protection Act’s rules against unfair or tricky practices. This includes cases where collectors ask for payment for services you never received or charge you for more expensive services than what you got (sometimes called “upcoding”).
  • States have their own rules to protect consumers when it comes to debt collection. Many states have made laws that protect people from unfair medical bill collection and reporting. Federal law doesn’t usually override state laws in this area. So, state protections on medical bill collection are likely to continue.
  • The CFPB is making sure that medical debt collectors follow the law. They have been checking on debt collectors and found many violations, like harassing people about unpaid medical bills or wrongly blaming them for identity theft. When necessary, the CFPB has taken actions against these collectors.
  • The CFPB is also reminding companies about their responsibilities. They’ve issued guidelines to remind debt collectors and credit reporting companies of what they need to do under the law. They’ve also clarified that debt collectors may be breaking the law if they charge extra fees for payment.
  • If you have to deal with debt collectors, the CFPB has resources to help you. They offer sample letters for different situations, like when you need more information about a debt, want to dispute it, or want to limit how and when debt collectors can contact you. They even have a letter for when you want all communication to go through your attorney.

Read the report, Fair Debt Collection Practices Act CFPB Annual Report 2023.

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