The Consumer Financial Protection Bureau (CFPB) released a report that highlighted medical debt collection protection issues that consumers face. Efforts by states and the bureau are being taken to end the collection of inaccurate medical bills that sometimes consumers do not actually owe.
The report, which outlines 8,500 complaints submitted in 2022 by service members, older adults and other consumers, discusses how the CFPB and states have worked to stop the collection of medical bills that are inaccurate or not even owed. The report also provides updates on the debt collection market and summarizes activities by the CFPB and other federal agencies relating to debt collection, including the Federal Trade Commission (FTC) and its actions under the FTC Act to protect small businesses from unfair debt collection practices. The report highlights the significant evidence that the collection, furnishing and reporting of medical bills is plagued by inaccuracies.
The CFPB is implementing measures to ensure medical debt collectors follow the law, including the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. The CFPB has taken enforcement actions against debt collectors who harass individuals with unpaid medical bills and claim responsibility for debts incurred due to identity theft. It has also reminded 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 collecting unlawful nursing facility debts. The CFPB supports state-level actions against individuals covered by the Consumer Financial Protection Act and other federal consumer financial laws. Additionally, the CFPB offers consumers five sample letters for interacting with debt collectors.
The report reveals that medical debt collectors may violate federal law by collecting bills that are not actually owed or are the wrong amount. This includes collecting charges for services patients never received, collecting for more expensive versions of services than what was actually provided or collecting amounts based on rates inconsistent with state law. However, states can generally enforce their own debt collection laws to protect consumers, as preemption of state law is narrow under the Fair Debt Collection Practices Act and Fair Credit Reporting Act. Additionally, inaccuracies in medical bill collection, furnishing and reporting are common, so state restrictions on these practices are unlikely to result in less accurate collections or credit reporting.
