Written By ESR News Blog Editor Thomas Ahearn
The Consumer Financial Protection Bureau (CFPB) has released a bulletin about “Medical Debt Collection and Consumer Reporting Requirements in Connection with the No Surprises Act” to remind credit bureaus of their legal obligations under the “No Surprises Act” that protects consumers from certain unexpected medical bills.
Companies that furnish information to credit bureaus about medical debts prohibited by the No Surprises Act may face legal liability under the Fair Credit Reporting Act (FCRA). The bulletin advises credit bureaus that FCRA accuracy and dispute obligations apply to debts that exceed the amount permitted by the No Surprises Act.
The CFPB bulletin about the No Surprises Act – which took effect January 1, 2022 – reminds debt collectors that furnish information about unpaid medical debts to credit bureaus that they must have reasonable written policies and procedures regarding the accuracy and integrity of consumer information provided to these credit bureaus.
Credit bureaus preparing a consumer report must follow reasonable procedures to assure the maximum possible accuracy of the information contained in the report. Both credit bureaus and furnishers must conduct reasonable and timely investigations of consumer disputes to verify the accuracy of consumer information.
For furnishers and credit bureaus, the accuracy and dispute obligations imposed by federal consumer financial protection law apply to debts from charges that exceed the amount permitted by the No Surprises Act. The CFPB will work with the U.S. Department of Health and Human Services (HHS) to address medical debt abuses.
“Too many Americans have been shocked by surprise medical bills and forced to pay up through credit report coercion,” CFPB Director Rohit Chopra stated in a news release about the bulletin. “Our action today should serve as a reminder not to collect on or furnish credit reporting information about invalid medical debt.”
Unexpected medical expenses and media debt were magnified by the COVID-19 pandemic. In 2021, the Federal Reserve Board reported 17 percent of adults had unexpected medical expenses in the past 12 months. In 2014, the CFPB published a report showing 43 million Americans had overdue medical debt on their credit reports.
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