CFPB Warns Debt Collectors of Engaging in Illegal Collection Practices

By Consumers for Quality Care, on October 23, 2024

The U.S. Consumer Financial Protection Bureau (CFPB) has issued a warning to debt collectors that utilize illegal tactics when pursing medical debts, according to Fierce Healthcare.

The CFPB reminded debt collectors that it is illegal to collect on bills that are “inaccurate, unsubstantiated or invalid under the law.” CFPB Director Rohit Chopra stated that the agency is taking action because “medical billing is often riddled with errors, including inflated or duplicative charges, fees for services the patient never received or charges already paid.”

The warning is specifically aimed at revenue cycle management firms, which are hired by hospital systems to allow them to stay an arm’s length away from directly engaging in predatory debt collection practices. The agency noted that they are fielding an increasing number of complaints from consumers who are being harassed by debt collectors for bills that are inaccurate or don’t even exist.

Illegal practices include double dipping (where a collection agency will attempt to collect on a bill already paid by the insurer), falsifying bills, collecting on bills without proper documentation, and collecting on services and procedures which may be already covered by federal or state law.

CQC urges lawmakers and regulators to take action to put an end to predatory medical debt collection tactics that harm consumers and exacerbate the medical debt crisis.