Report charges ‘rising volume’ of consumer complaints over coercive credit reporting of medical bills

A rising volume of coercive credit reporting and privacy intrusions based on unverified and inaccurate medical billing have been reported by consumers in their complaint calls made to the federal consumer financial protection agency, it said in a report issued Wednesday.

According to the Consumer Financial Protection Bureau (CFPB), consumers are reporting that they receive medical bills that are inaccurate or not owed. They also describe difficulties in identifying, verifying, or eliminating the bills. Consumers also report, the agency said, of learning of an outstanding medical bill only after experiencing a drop in their credit score and being told that only paying the bill would remove the negative collections information from their credit report.

“When they did receive prior notice of medical bills in collections, people reported that debt collectors included detailed medical information that resulted in privacy breaches of sensitive medical information,” the bureau alleged in its report. “Many people reported paying medical bills to avoid adverse financial and privacy consequences, even when they did not believe the bill to be valid.”

The bureau’s April 2022 Complaint Bulletin’s cover item, “Medical billing and collection issues described in consumer complaints,” also reports that consumers:

  • Do not recognize or owe alleged medical bills, but they continue to be contacted by debt collectors.
  • Suspect unpaid medical bills are being surreptitiously and unlawfully placed on their credit reports.
  • Experience their credit reports being used as weapons to force payments.
  • Report that collection notices contained large amounts of highly sensitive medical information.

“The consumer experiences in today’s report strongly suggest that many medical bills reported on credit reports are disputed, inaccurate, or not owed,” the agency wrote. “This finding supports previous research by the CFPB that found medical bills are less predictive of future repayment than other bills or credit obligations.

“Specifically, medical bills do less to help lenders determine the likelihood that a credit applicant will repay a new credit extension, like a personal loan,” the agency asserted.

Complaint Bulletin: Medical billing and collection issues described in consumer complaints