Ending Unfair Medical Debt Collection

Consumer bureau takes action against debt collectors

A key federal regulator is taking action to prevent debt collectors from using illegal tactics to collect debt or collecting on debts that are not owed.

The Consumer Financial Protection Bureau (CFPB) issued guidance designed to prevent abuse of consumers who owe medical debt.

The CFPB identified several practices that debt collectors sometimes use that violate federal law. These include: double-dipping to get paid for services already covered by insurance, hounding consumers to pay fake or exaggerated charges, misrepresenting consumers’ rights to contest bills, and collecting on debts without documentation that the amount is actually owed.

“Medical billing is often riddled with errors, including inflated or duplicative charges, fees for services the patient never received, or charges already paid,” said CFPB Director Rohit Chopra. “The CFPB is taking action to ensure that Americans are not unfairly chased by debt collectors over unsubstantiated or invalid medical bills.”

CFPB analysis notes that around 100 million Americans owe a total of $220 billion in medical debt.

While in many cases, a debt for medical bills is legitimately owed, that debt may have been paid in part by the patient or may be due from an insurance company. Debt collectors will sometimes seek to collect on a debt while an insurance claim that would satisfy the debt is pending, resulting in a double payment to the hospital for the same services.

Previous action from the CFPB removed medical debt from consumer credit reports.

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