The Consumer Financial Protection Bureau (CFPB) released its
annual report to Congress on the Fair Debt Collection Practices Act (FDCPA),
focusing on challenges faced by American families dealing with medical debt
collectors. The report cites 8,500 complaints in 2022 from servicemembers,
older adults and other consumers regarding medical debt collections and
highlighted efforts by the CFPB and states to halt the pursuit of inaccurate or
unjust medical bills.
The CFPB’s report summarizes activities by the CFPB and
other federal agencies in managing debt collection, including actions by the Federal
Trade Commission (FTC) to safeguard small businesses from unfair debt
collection practices.
“Protecting small businesses, in addition to individual
consumers, is a high priority for the [FTC],” the report states. “While some
statutes, including the FDCPA, involve household debt, the FTC Act empowers the
FTC to take action to protect small business consumers. These actions highlight
the type of deceptive and unfair debt collection conduct that exists regardless
of whether the victim is a small business or individual consumer and illustrate
the measures the FTC has undertaken to combat such conduct.”
With respect to common consumer complaints, the report emphasized
issues reported about medical bills inaccurately pursued or not owed.
Complaints revealed instances where bills were already paid, incorrect amounts
were collected or collections began long after care was provided. It also pointed
out instances in which medical bills appeared on credit reports without prior
consumer contact. The report noted many servicemembers and older adults raised
concerns despite having insurance coverage.
“Complaints about attempts to collect a debt that the
consumer reports is not owed has been the predominant issue selected by
consumers since the CFPB began accepting debt collection complaints in 2013,”
the report states. “Most consumers who stated that the debt is not owed report
that the debt is not their debt (51 percent). Consumers described being
contacted about debts they do not recognize, attempts to collect a debt that
belongs to someone else, and being in collections for services or products they
did not receive.”
In about 30 percent of debt collection complaints, consumers
reported the debt resulted from identity theft and they often learned about the
debt after reviewing their credit report or after receiving an alert from a
credit monitoring service.
“Many of these consumers described completing an identity
theft report and contacting the collectors listed on their credit report in an
attempt to remove the debt,” the report continues. “In addition to these
issues, consumers also complained that their debt was paid (16 percent) or was
discharged in bankruptcy and is no longer owed (3 percent).”
The report outlines violations by medical debt collectors,
including attempts to collect erroneous or inflated bills in violation of federal
laws. It also underscores actions states can take to more effectively enforce debt
collection laws to protect consumers without federal intervention.
Additionally, the CFPB issued reminders about legal
obligations, including a bulletin on the No Surprises Act and advisories
addressing unlawful nursing facility debts and prohibited fees. It supported
state-level actions and offered consumer resources like sample letters for
interactions with debt collectors.