The proposed rule change, announced Tuesday, would also increase privacy protections, help raise credit scores and prevent debt collectors from using the credit reporting system to coerce people to pay. Congress in 2003 restricted lenders from obtaining or using medical information, including medical debts, through the Fair and Accurate Credit Transactions Act. But federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions. In March 2022, the CFPB released a report estimating that medical bills made up $88 billion of reported debts on credit reports and announced that it would assess whether credit reports should include data on unpaid medical bills. The complex nature of medical billing, insurance coverage and reimbursement, and collections means that medical debts that continue to be reported are often inaccurate or inflated, it added.

Source: Los Angeles Times June 20, 2024 17:26 UTC