CFPB issues advisory on medical debt collection

The Consumer Financial Protection Bureau issued an advisory opinion that said debt collectors, which may include third-party “revenue cycle management” companies, are violating federal law when they collect on inaccurate or legally invalid medical debts.

Details: The CFPB said these illegal practices 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.

• Collecting on debts without documentation that the amount is actually owed.

More: The advisory is the latest CFPB action on medical debt. The agency this summer proposed a rule to ban medical bills from people’s credit reports.

ICBA View: ICBA in August said the CFPB does not have the statutory discretion to eliminate the use of all medical debt from consumer reports and the proposal would increase the inaccuracy of credit reports and hinder community bank efforts to comply with other regulatory requirements.