US Watchdog Issues Warning to Medical Debt Collectors, Reports Reuters

The top U.S. consumer financial regulator has issued a warning to medical debt collectors, indicating that they could face enforcement actions if they engage in illegal practices aimed at collecting inaccurate or invalid medical debts.

According to the U.S. Consumer Financial Protection Bureau (CFPB), approximately 100 million Americans are burdened with medical debt totaling $220 billion. The agency released legal guidance highlighting various collection tactics it deems unlawful.

The CFPB, often viewed unfavorably by the industry, is intensifying its efforts to address what it identifies as predatory revenue-generating practices. Amid rising prices and as a tight election year looms, Vice President Kamala Harris is leading initiatives aimed at removing medical debt from consumer credit reports.

CFPB Director Rohit Chopra emphasized the prevalence of errors in medical billing, which can involve inflated charges, duplicate fees, or charges for services that were never performed. He stated, “The CFPB is taking action to ensure that Americans are not unfairly pursued by debt collectors over unsubstantiated or invalid medical bills.”

The CFPB has identified several illegal practices, including double billing for the same service, attempting to collect on debts that are false or poorly documented, and failing to adhere to legal limits. Additionally, the bureau notes that some collectors misrepresent consumers’ rights to dispute charges.