New Rule Aims To Curb Inaccurately Reported Medical Debt
by Ashlee Kieler, Consumerist
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Medical bills account for nearly half of all collections notices on consumers’ credit reports, affecting more than 43 million Americans. Me
anwhile, it’s been shown that medical billing is fraught with errors and many consumers sent to collections for these debts are penalized too harshly. A new federal rule hopes to reduce this overly negative impact of medical debt on credit reports.
In an effort to better address the challenges consumers face when it comes to medical debt, the CFPB announced, in conjunction with its new report [PDF], that major consumer reporting agencies will now be required to provide regular accuracy reports to the Bureau on how disputes from consumers are being handled.
“Access to this required reporting information on a regular basis will help us prioritize our work, and it will help us protect consumers even more effectively in this field,” Richard Cordray, CFPB director, says in a statement.
Because medical debts are often the result of unpredictable and costly events such as accidents and sudden illnesses, the CFPB believes they should be weighed differently from non-medical debts. After all, people choose to go into debt buying stuff they can’t afford, but they rarely choose to get an appendicitis that will end up costing them more than a luxury sports car.
Often the CFPB has found that consumers do not even know they owe medical debt until they get a call from the collections agency or they discover it on their credit report.
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Tags: Consumer Debt, Medical Issues