This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

80715 

Vol. 89, No. 193 

Friday, October 4, 2024 

1 85 FR 77987 (Dec. 3, 2020). 

NUCLEAR REGULATORY 

COMMISSION 

10 CFR Part 2 

[NRC–2023–0210] 

RIN 3150–AL09 

Non-Substantive Amendments to 

Adjudicatory Proceeding 

Requirements 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Direct final rule; confirmation of 

effective date. 

SUMMARY: The U.S. Nuclear Regulatory 

Commission (NRC) is confirming the 

effective date of November 5, 2024, for 

the direct final rule that was published 

in the Federal Register on August 22, 

2024. This direct final rule amended the 

agency’s rules of practice and procedure 

to improve access to documents and 

make e-filing rules technology neutral, 

to delete an obsolete regulation, to 

clarify the applicability of subpart L and 

subpart N procedures, to enhance 

internal consistency for page limit 

requirements, to enhance consistency 

with the Federal Rules of Evidence for 

‘‘true copies,’’ and to better reflect 

current Atomic Safety and Licensing 

Board Panel practice regarding 

admission of evidence. 

DATES: Effective date: The effective date 

of November 5, 2024, for the direct final 

rule published in the Federal Register 

on August 22, 2024 (89 FR 67830), is 

confirmed. 

ADDRESSES: Please refer to Docket ID 

NRC–2023–0210 when contacting the 

NRC about the availability of 

information for this action. You may 

obtain publicly available information 

related to this action by any of the 

following methods: 

• Federal Rulemaking Website: Go to 

https://www.regulations.gov and search 

for Docket ID NRC–2023–0210. Address 

questions about NRC dockets to Helen 

Chang; telephone: 301–415–3228; email: 

Helen.Chang@nrc.gov. For technical 

questions, contact the individual listed 

in the FOR FURTHER INFORMATION

CONTACT section of this document. 

• NRC’s Agencywide Documents 

Access and Management System 

(ADAMS): You may obtain publicly 

available documents online in the 

ADAMS Public Documents collection at 

https://www.nrc.gov/reading-rm/ 

adams.html. To begin the search, select 

‘‘Begin Web-based ADAMS Search.’’ For 

problems with ADAMS, please contact 

the NRC’s Public Document Room (PDR) 

reference staff at 1–800–397–4209, at 

301–415–4737, or by email to 

PDR.Resource@nrc.gov. The comment 

can be viewed in ADAMS under 

Accession No. ML24256A206. 

• NRC’s PDR: The PDR, where you 

may examine and order copies of 

publicly available documents, is open 

by appointment. To make an 

appointment to visit the PDR, please 

send an email to PDR.Resource@nrc.gov 

or call 1–800–397–4209 or 301–415– 

4737, between 8 a.m. and 4 p.m. eastern 

time, Monday through Friday, except 

Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Ethan Licon, U.S. Nuclear Regulatory 

Commission, Washington, DC 20555– 

0001; telephone: 301–415–1016, email: 

Ethan.Licon@nrc.gov. 

SUPPLEMENTARY INFORMATION: On August 

22, 2024 (89 FR 67830), the NRC 

published a direct final rule amending 

its regulations in part 2 of title 10 of the 

Code of Federal Regulations to revise 

the agency’s rules of practice and 

procedure to improve access to 

documents and make e-filing rules 

technology neutral, to delete an obsolete 

regulation, to clarify the applicability of 

Subpart L and Subpart N procedures, to 

enhance internal consistency for page 

limit requirements, to enhance 

consistency with the Federal Rules of 

Evidence for ‘‘true copies,’’ and to better 

reflect current Atomic Safety and 

Licensing Board Panel practice 

regarding admission of evidence. In the 

direct final rule, the NRC stated that if 

no significant adverse comments were 

received, the direct final rule would 

become effective on November 5, 2024. 

The NRC received one anonymous 

comment, which can be viewed at 

ADAMS Accession No. ML24256A206; 

the comment was not a significant 

adverse comment on the direct final 

rule. Therefore, this direct final rule will 

become effective as scheduled. 

Dated: October 1, 2024. 

For the Nuclear Regulatory Commission. 

Cindy Bladey, 

Chief, Regulatory Analysis and Rulemaking 

Support Branch, Division of Rulemaking, 

Environmental, and Financial Support, Office 

of Nuclear Material Safety and Safeguards. 

[FR Doc. 2024–23015 Filed 10–3–24; 8:45 am] 

BILLING CODE 7590–01–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1006 

Debt Collection Practices (Regulation 

F); Deceptive and Unfair Collection of 

Medical Debt 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Advisory opinion. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing this 

advisory opinion to remind debt 

collectors of their obligation to comply 

with the Fair Debt Collection Practices 

Act (FDCPA) and Regulation F’s 

prohibitions on false, deceptive, or 

misleading representations or means in 

connection with the collection of any 

medical debt and unfair or 

unconscionable means to collect or 

attempt to collect any medical debts. 

DATES: This advisory opinion is 

applicable as of December 3, 2024. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this a document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary 

The CFPB is issuing this advisory 

opinion through the procedures for its 

Advisory Opinions Policy.1 Refer to 

those procedures for more information. 

This advisory opinion explains that 

debt collectors are strictly liable under 

the FDCPA and Regulation F (12 CFR 

part 1006) for engaging in the following 


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80716 Federal Register / Vol. 89, No. 193 / Friday, October 4, 2024 / Rules and Regulations 

2Shameek Rakshmit et al., The Burden of Medical 

Debt in the United States, KFF (Feb. 12, 2024), 

https://www.kff.org/health-costs/issue-brief/theburden-of-medical-debt-in-the-united-states/#:∼:

text=This%20analysis%20of%20government%20

data,debt%20of%20more%20than

%20%2410%2C000. 

3CFPB, Medical Debt Burden in the United States 

at 2 (Mar. 1, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

medical-debt-burden-in-the-united-states/. 

4See Lunna Lopes et al., Health Care Debt in the 

U.S.: The Broad Consequences of Medical and 

Dental Bills, KFF (June 16, 2022), https://

www.kff.org/report-section/kff-health-care-debtsurvey-main-findings/ (finding that 50 percent of 

the people in the United States who have medical 

debt have it because of emergency care and 72 

percent have it because of acute care). 

5CFPB, Medical Debt Burden in the United 

States, at 3 (Mar. 1, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

medical-debt-burden-in-the-united-states/. 

6 George A. Nation III, Contracting for Healthcare: 

Price Terms in Hospital Admission Agreements, at 

106, 124 Dick. L. Rev. 91 (2019) (describing how it 

is ‘‘very common’’ for admissions agreements to not 

include exact prices). 

7 Id. at 92 (‘‘self-pay patients, who enter the 

hospital through the emergency department, simply 

lack capacity to contract due to the rushed, stressful 

and tension-laden emergency circumstances’’). As 

described below, the issue of whether this 

constitutes an implied contract is a matter of State 

law. 

8See CFPB, Medical Debt Burden in the United 

States, at 3 (Mar. 1, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

medical-debt-burden-in-the-united-states/ 

(‘‘medical billing and collections practices can be 

confusing and difficult to navigate’’). 

9See Eric Lopez et al., How Much More Than 

Medicare Do Private Insurers Pay? A Review of the 

Literature, KFF (Apr. 15, 2020), https://www.kff.org/ 

medicare/issue-brief/how-much-more-thanmedicare-do-private-insurers-pay-a-review-of-theliterature/; Frank Griffin, Fighting Overcharged Bills 

from Predatory Hospitals, 51 ARIZ. ST. L.J. 1003 

(2019). 

10Hospitals generally have no limit on their 

‘‘chargemaster’’ rate, the rate they initially charge 

most private payors, and chargemaster rates are 

typically significantly higher than the actual cost of 

services rendered. See National Nurses United, 

Fleecing Patients: Hospitals Charge Patients More 

Than Four Times the Cost of Care’’ (Nov. 2020), 

https://www.nationalnursesunited.org/sites/default/ 

files/nnu/graphics/documents/1120_

CostChargeRatios_Report_FINAL_PP.pdf. 

11See Jennifer Tolbert et al., Key Facts about the 

Uninsured Population, KFF (Dec. 18, 2023), https:// 

www.kff.org/uninsured/issue-brief/key-facts-aboutthe-uninsured-population/. 

12See Matthew Panhans et al., Prices for Medical 

Services Vary Within Hospitals, but Vary More 

Across Them, Medical Care Research and Review 

78(2), 157 (June 19, 2019); Xu, Tim, Angela Park 

and Ge Bai, Variation in Emergency Department vs 

Internal Medicine Excess Charges in the United 

States,’’ JAMA Internal Medicine (2017), https://

pubmed.ncbi.nlm.nih.gov/28558093/. 

13See Ge Bai and Gerard F. Anderson, ‘‘Extreme 

Markup: The Fifty US Hospitals With The Highest 

Charge-To-Cost Ratios,’’ Health Affairs (June 2015), 

https://www.healthaffairs.org/doi/full/10.1377/ 

hlthaff.2014.1414. 

unlawful practices when collecting 

medical bills: 

Æ Collecting an amount not owed 

because it was already paid. This 

includes instances when a bill was 

already fully or partially paid by 

insurance or a Government payor. 

Æ Collecting amounts not owed due to 

Federal or State law. This includes 

where law prohibits obligating a person 

on certain debts. For example, a State 

workers’ compensation scheme may 

make employers or insurers responsible 

for qualifying medical expenses, rather 

than the patients. In addition, the 

Nursing Home Reform Act prohibits 

nursing homes from requiring third 

parties to pay for a patient’s expenses in 

certain circumstances. 

Æ Collecting amounts above what can 

be charged under Federal or State law. 

This includes, for example, collecting 

amounts that exceed limits in the No 

Surprises Act. It also includes collection 

of amounts that exceed a State’s 

common law remedies for claims when 

there is no express contract. 

Æ Collecting amounts for services not 

received. This includes ‘‘upcoding’’ 

where a patient is charged for medical 

services that are more costly, more 

extensive, or more complex than those 

actually rendered. 

Æ Misrepresenting the nature of legal 

obligations. This includes collecting on 

uncertain payment obligations that are 

presented to consumers as amounts that 

are certain, fully settled, or determined. 

Æ Collecting unsubstantiated medical 

bills. Debt collectors must have a 

reasonable basis for asserting that the 

debts they collect are valid and the 

amounts correct. Debt collectors may be 

able to satisfy this requirement by 

obtaining appropriate information to 

substantiate those assertions, consistent 

with patients’ privacy. This information 

could include payment records 

(including from insurance); records of a 

hospital’s compliance with any 

applicable financial assistance policy; 

copies of executed contracts or, in the 

absence of express contracts, 

documentation that the creditor can 

make a prima facie claim for an alleged 

amount under State law (e.g., 

‘‘reasonable’’ or ‘‘market rates’’). 

This advisory opinion also interprets 

the meaning of ‘‘in default’’ for purposes 

of FDCPA section 803(6)(F)(iii) in the 

medical debt context to be determined 

by the terms of any agreement between 

the consumer and the medical provider 

under applicable law governing the 

agreement. 

II. Background 

Medical debt is a major burden for 

many Americans. Recent estimates 

place total medical debt owed by people 

in the United States at $220 billion.2

Medical debt is known to 

disproportionately impact young and 

low-income adults, Black and Hispanic 

people, veterans, older adults, and 

people in the Southern United States.3

Medical debt is unique because 

consumers rarely plan to take on 

medical debt or choose among providers 

based on price. Most medical debt arises 

from acute or emergency care.4 In many 

cases, patients lack the ability to 

substantively comparison-shop between 

medical service providers due to 

emergency need, restrictive insurance 

networks, price opacity, or limited 

provider availability.5 This leaves many 

patients subject to the pricing and 

policies of the medical service providers 

available to them. 

Healthcare providers send medical 

bills to consumers to obtain 

compensation for care rendered to 

patients. In some cases, providers and 

patients enter into express contractual 

relationships, which may define 

patients’ payment obligations or 

providers’ pricing for the care. Yet 

contracts between providers and 

patients may still be vague, as some do 

not define specific prices for the care 

provided.6 In other cases, such as in 

emergency settings or where 

independent contractors or provider 

groups are involved (e.g., lab work or 

anesthesiology), consumers may not 

have any contractual relationship with a 

medical provider that provides care and 

then sends a bill.7

Consumers consistently report being 

confused about medical billing 

practices.8 One reason for this is the 

variation in how medical providers bill 

their patients. In most cases, medical 

providers charge different rates for the 

same services to different payors, for 

example charging patients far more than 

what Medicare would pay for a given 

procedure if the patient is not covered 

by Medicare.9 This, in part, stems from 

the fact that the pricing of medical 

services is heavily negotiated between 

providers and certain institutional 

payors such as insurance companies, 

and set by Government programs like 

Medicare and Medicaid. As a result, 

healthcare providers are incentivized to 

initially set high list prices as starting 

offers in negotiations with insurers.10 As 

a result, uninsured and out-of-network 

patients are often charged much higher 

prices than those ultimately agreed to 

with insurers for patients in their 

networks.11 Even within network, prices 

sometimes vary by facility or 

department.12 These rates often vastly 

exceed the cost of providing care.13

Research has also shown that healthcare 

markups are higher at hospitals with 


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Federal Register / Vol. 89, No. 193 / Friday, October 4, 2024 / Rules and Regulations 80717 

14See CFPB, Medical Debt Burden in the United 

States, at 11 (Mar. 1, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

medical-debt-burden-in-the-united-states/ 

(referencing Faiz Gani, et al., Hospital markup and 

operation outcomes in the United States, Surgery 

(July 2016), https://www.sciencedirect.com/science/ 

article/abs/pii/S0039606016300022?via%3Dihub; 

Tim Xu, Angela Park, and Ge Bai, Variation in 

Emergency Department vs Internal Medicine Excess 

Charges in the United States, Jama Internal 

Medicine (2017), https://pubmed.ncbi.nlm.nih.gov/ 

28558093/). 

15Medical care providers often calculate and 

itemize charges for care using a standardized set of 

codes. These codes indicate the various aspects of 

care a patient received along with the type and 

scope of that care. Typically, more serious, more 

urgent, or more involved forms of care will incur 

higher charges. If a medical provider designates an 

aspect of a patient’s care with a code that denotes 

a higher or more involved level of care than was 

actually received, the provider is said to be 

‘‘upcoding.’’ 

16 Keith Joiner, Jianjing Lin, and Juan Pantano, 

Upcoding in medicare: where does it matter most, 

Health Economics Review 14(1) (2024), https://

www.ncbi.nlm.nih.gov/pmc/articles/ 

PMC10759668/. 17William Hsiao, Fraud and Abuse in Healthcare 

Claims, California HHS (Jan. 2022), https://

www.chhs.ca.gov/wp-content/uploads/2022/01/ 

Commissioner-William-Hsiao-Comments-on-Fraudand-Abuse-in-Healthcare-Claims.pdf. 18Consumers are increasingly using medical 

credit cards and other financing options to pay for 

medical care, and the CFPB has done significant 

work studying and addressing this issue. See CFPB, 

Medical Credit Cards and Financing Plans’’ (May 4, 

2023), https://www.consumerfinance.gov/dataresearch/research-reports/medical-credit-cardsand-financing-plans/; see also Lorelei Salas, 

Ensuring consumers aren’t pushed into medical 

payment products’’ (June 18, 2024), https://

www.consumerfinance.gov/about-us/blog/ensuringconsumers-arent-pushed-into-medical-paymentproducts/; CFPB, Request for Information on 

Medical Payment Products,’’ 88 FR 44281 (July 12, 

2023). 

19Certain Federal laws, such as the No Surprises 

Act and the Nursing Home Reform Act, limit 

collection activities for certain kinds of medical 

debt. Non-profit hospitals may lose their non-profit 

tax status if they fail to evaluate patients for 

eligibility for financial assistance before the 

hospital takes certain types of collection actions. 

See 26 U.S.C. 501(r)(6). Some State laws similarly 

limit medical debt collections activities. For 

example, states have enacted additional 

requirements that broaden the applicability of 

hospital financial assistance, covering additional 

services for those patients deemed eligible. See 

Washington State Charity Care Law, RCW 

70.170.060 (2024) (requiring non-profit hospitals to 

provide charity care for patients and their 

guarantors with incomes less than 300 percent of 

the Federal poverty guidelines). Medicare and 

Medicaid requirements also vary by State and may 

limit medical debt collections activities. 

20See CFPB, Medical Debt Burden in the United 

States, at 12 (Mar. 1, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

medical-debt-burden-in-the-united-states/. 

21See Jacqueline LaPointe, What’s Behind Private 

Equity’s Interest in RCM Vendors, TechTarget (Mar. 

5, 2024), https://www.techtarget.com/ 

revcyclemanagement/answer/Whats-BehindPrivate-Equitys-Interest-in-RCM-Vendors. 

22See Grand View Research, U.S. Revenue Cycle 

Management Market Size, Share, and Trends 

Analysis Report, https://www.grandview

research.com/industry-analysis/us-revenue-cyclemanagement-rcm-market. 

23See Consent Order, Commonwealth Fin. Sys., 

Inc., CFPB No. 2023–CFPB–0018 (Dec. 15, 2023); 

Consent Order, Phoenix Fin. Servs., LLC, CFPB No. 

2023–CFPB–0004 (June 8, 2023). 

24See CFPB, Fair Debt Collection Practices Act 

CFPB Annual Report 2023 (Nov. 16, 2023); https:// 

www.consumerfinance.gov/data-research/researchreports/fair-debt-collection-practices-act-cfpbannual-report-2023/. 

25See CFPB, Fair Debt Collection Practices Act 

CFPB Annual Report 2023 (Nov. 16, 2023), https:// 

www.consumerfinance.gov/data-research/researchreports/fair-debt-collection-practices-act-cfpbannual-report-2023/; CFPB, Nursing Home Debt 

Collection (Sept. 9, 2022), https://www.consumer

finance.gov/data-research/research-reports/issuespotlight-nursing-home-debt-collection/; see also, 

e.g., Complaint for Civil Penalties, Injunctive and 

Other Relief, Washington v. Providence Health & 

Services, No. 22–2–01754–6 SEA (King Cnty. Sup. 

Ct. Feb. 24, 2024), ¶¶ 70–77 (alleging that hospital 

system sent the accounts of patients it knew were 

eligible for financial assistance under state law to 

debt collectors). 

26 John McNamara, Debt collectors re-evaluate 

medical debt furnishing in light of data integrity 

issues (Feb. 14, 2023), https://www.consumer

finance.gov/about-us/blog/debt-collectors-reevaluate-medical-debt-furnishing-in-light-of-dataintegrity-issues/. 

27See CFPB, Medical Debt Burden in the United 

States, at 4 (Mar. 1, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

medical-debt-burden-in-the-united-states/. 

28 15 U.S.C. 1692l, 1692k; see 87 FR 31940, 31941 

(May 26, 2022) (explaining state authority to 

address violations of the federal consumer financial 

laws committed by ‘‘covered persons’’ and ‘‘service 

providers’’ under the Consumer Financial 

Protection Act). 

29 12 U.S.C. 5481(12)(F), (H), 5512(b), 5514(c); 15 

U.S.C. 1692l(d). 

more Black and Hispanic patients and at 

investor-owned, for-profit hospitals.14

Further, healthcare providers 

sometimes charge patients for 

‘‘upcoded’’ services, or services more 

expensive than what the consumer 

actually received.15 A 2024 study found 

that, from 2010–2019, the total of 

upcoding expenses for Medicare Parts 

A, B, and C was $656 million, $2.39 

billion, and $10–15 billion, 

respectively.16 Upcoding is relatively 

widespread and has been estimated to 

account for 5–10 percent of total 

healthcare expenditures in the United 

States.17

After an individual receives a medical 

service, they and their insurer are billed, 

if the individual is insured. Some 

healthcare providers also market 

medical payment products or other 

external financing options to their 

patients.18 In some cases, providers are 

obligated by State or Federal laws to 

perform certain affirmative functions 

involving the medical bill or refrain 

from specific collection actions.19 After 

any insurance payments or payment via 

a medical payment product are 

received, unpaid amounts, if any, are 

collected by phone calls, letters, emails, 

and offers of payment plans or 

settlements.20 Hospitals and other 

healthcare providers in the United 

States are increasingly outsourcing 

medical billing and collection activities 

to third parties, such as ‘‘Revenue Cycle 

Management’’ firms, which are often 

funded by private equity.21 One 

estimate projects the domestic market 

for Revenue Cycle Management 

companies to grow by 10.2 percent 

annually until 2030.22 Unpaid medical 

bills may also be assigned to more 

traditional debt collectors, including 

those that specialize in medical debt, 

placed with an attorney for litigation, or, 

more rarely, sold to a debt buyer. 

The CFPB has observed and reported 

on many issues with how debt 

collectors collect medical debt in the 

United States. For example, the CFPB 

has brought enforcement actions against 

debt collectors for collecting on 

disputed medical debts without 

adequate substantiation.23 The CFPB 

has also previously described reports 

from consumers who have received 

collections notices for medical debts 

they should or do not owe. Specifically, 

consumers have reported receiving 

collections notices for debts that have or 

should have been covered by insurance, 

government payors, hospital financial 

assistance programs, or that the patient 

has otherwise paid.24 Consumers also 

have reported receiving collections 

notices for debts they believe they do 

not owe under State or Federal law. 

Further, many debt collectors do not 

have timely access to healthcare 

providers’ billing and payment 

information, increasing the likelihood 

that the debt collector collects on an 

amount that is not owed, such as a bill 

that has already been paid.26 Many 

consumers have reported difficulties 

receiving verification of medical debts 

for which they have received collections 

notices.27 In some cases, debt collectors 

either may not have or refuse to provide 

to a consumer upon request proof of 

insurance payments, documentation 

confirming that the amount billed 

complies with State law and other 

affirmative collection requirements, 

such as hospital financial assistance, or 

other documents that would 

demonstrate the validity of the debt and 

the accuracy of the demanded amount. 

The FDCPA’s protections are enforced 

by the CFPB, by other Federal 

regulators, by individual consumers, 

and, under certain circumstances, by 

States.28 And the CFPB is responsible 

for issuing rules regarding the FDCPA.29

To the extent a person qualifies as a 

‘‘debt collector’’ under the FDCPA and 

its implementing Regulation F, that 

person is subject to the FDCPA and 


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80718 Federal Register / Vol. 89, No. 193 / Friday, October 4, 2024 / Rules and Regulations 

30 15 U.S.C. 1692a(6) (defining ‘‘debt collector’’); 

12 CFR 1006.2(i) (same). 

31 15 U.S.C. 1692e; 12 CFR 1006.18(a). 

32 15 U.S.C. 1692e(2)(A); 12 CFR 1006.18(b)(2)(i). 

33 15 U.S.C. 1692f; 12 CFR 1006.22(a). 

34 15 U.S.C. 1692f(1); 12 CFR 1006.22(b). 

35See, e.g., 15 U.S.C. 1692e(8) (prohibiting 

‘‘[c]ommunicating or threatening to communicate to 

any person credit information which is known or 

which should be known to be false’’) (emphasis 

added); 15 U.S.C. 1692d(5) (prohibiting debt 

collectors from ‘‘causing a telephone to ring or 

engaging any person in telephone conversation 

repeatedly or continuously with intent to annoy, 

abuse, or harass’’) (emphasis added); 15 U.S.C. 

1692j(a) (making it unlawful to ‘‘design, compile, 

and furnish any form knowing that such form 

would be used’’ to deceive consumers in a specified 

way’’) (emphasis added). 

36See, e.g., 15 U.S.C. 1692k(b)(1) (including as a 

factor for calculating statutory damages ‘‘the extent 

to which [the debt collector’s] noncompliance was 

intentional’’). Entities may also have an affirmative 

defense to liability for violations described in this 

advisory opinion, but only if they maintain 

procedures that are reasonably designed to prevent 

unintentional violations that are the result of bona 

fide errors. See 15 U.S.C. 1692k(c) (providing 

affirmative defense for violations if they are: (1) 

‘‘not intentional,’’ (2) the result of ‘‘a bona fide 

error,’’ and (3) occurred despite ‘‘the maintenance 

of procedures reasonably adapted to avoid any such 

error’’). Further, ‘‘the broad statutory requirement of 

procedures reasonably designed to avoid ‘any’ bona 

fide error indicates that the relevant procedures are 

ones that help to avoid errors like clerical or factual 

mistakes. Such procedures are more likely to avoid 

error than those applicable to legal reasoning. . . .’’ 

Jerman v. McNellie, et al., 559 U.S. 573, 587 (2010). 

37Every Federal Circuit Court of Appeals to 

address this issue has held that the FDCPA is a 

strict liability statute. See, e.g., Vangorden v. 

Second Round, Ltd. P’ship, 897 F.3d 433, 437–38 

(2d Cir. 2018) (‘‘The FDCPA is ‘a strict liability 

statute’ and, thus, there is no need for a plaintiff 

to plead or prove that a debt collector’s 

misrepresentation . . . was intentional.’’); Allen ex 

rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 

(3d Cir. 2011) (‘‘The FDCPA is a strict liability 

statute to the extent it imposes liability without 

proof of an intentional violation.’’); Stratton v. 

Portfolio Recovery Assocs., LLC, 770 F.3d 443, 448– 

49 (6th Cir. 2014) (‘‘The FDCPA is a strict-liability 

statute: A plaintiff does not need to prove 

knowledge or intent.’’). 

38Congress enacted the FDCPA in 1977 to 

‘‘eliminate abusive debt collection practices by debt 

collectors, to ensure that those debt collectors who 

refrain from using abusive debt collection practices 

are not competitively disadvantaged, and to 

promote consistent State action to protect 

consumers against debt collection abuses.’’ Public 

Law 95–109, sec. 802(e), 91 Stat. 874, 874 (codified 

at 15 U.S.C. 1692(e)). 

39 15 U.S.C. 1692f(1); 12 CFR 1006.22(b). 

40 15 U.S.C. 1692e(2)(A); 12 CFR 1006.18(b)(2)(i). 

41See Vangorden v. Second Round, L.P., 897 F.3d 

433, 437–38 (2d Cir. 2018) (consumer stated claim 

under FDCPA sections 807 and 808 when debt 

collector sought to collect debt that consumer had 

already settled with creditor); Gonzalez v. Allied 

Collection Servs., Inc., No. 216CV02909MMDVCF, 

2019 WL 489093, at *8–9 (D. Nev. Feb. 6, 2019), 

aff’d, 852 F. App’x 264 (9th Cir. 2021) (debt 

collector violated FDCPA sections 807 and 808 

when it sought to collect full amount of debt that 

had been partially paid); see also Complaint for 

Permanent Injunction and Other Equitable Relief, 

FTC v. Midwest Recovery Systems, LLC, No. 12– 

00182 (E.D. Mo. Nov. 25, 2020), https://

www.ftc.gov/system/files/documents/cases/01_-_

complaint.pdf (pleading violation of FDCPA section 

807 where, among other things, ‘‘[t]he debt was 

medical debt in the process of being re-billed to the 

consumer’s medical insurance’’). 

42 15 U.S.C. 1692f(1); 12 CFR 1006.22(b). 

43See Restatement (Second) of Contracts sec. 178 

(‘‘A promise or other term of an agreement is 

unenforceable on grounds of public policy if 

legislation provides that it is unenforceable. . . .’’); 

Regulation F.30 The FDCPA and 

Regulation F prohibit the use of ‘‘any 

false, deceptive, or misleading 

representation or means in connection 

with the collection of any debt,’’ 31

including, for example, any false 

representation of ‘‘the character, 

amount, or legal status of any 

debt.’’ 32The FDCPA and Regulation F 

also prohibit the use of ‘‘unfair or 

unconscionable means to collect or 

attempt to collect any debt,’’ 33

including, for example, the ‘‘collection 

of any amount (including any interest, 

fee, charge, or expense incidental to the 

principal obligation) unless such 

amount is expressly authorized by the 

agreement creating the debt or permitted 

by law.’’ 34 The CFPB reminds debt 

collectors that these FDCPA 

prohibitions interact with other Federal 

and State laws in a variety of ways that 

could create liability for debt collectors 

operating in the medical debt market. 

The CFPB also reminds debt 

collectors that sections 1692e(2)(A) and 

1692f(1) impose strict liability. First, 

these two provisions include no scienter 

requirement, in contrast to several 

others that do.35 Second, the statute 

differentiates between intentional and 

unintentional violations.36 As many 

courts have held,37 imposing strict 

liability for violations of these 

provisions is therefore the best reading 

of the plain language, consistent with 

the statute’s overall structure, and 

consonant with Congress’ intent.38

III. Collection of Debts Invalid Under 

Law 

A. Collection of Amounts Not Owed 

Because Already Paid 

Section 808(1) of the FDCPA 

prohibits, in relevant part, the collection 

of any amount ‘‘unless such amount is 

expressly authorized by the agreement 

creating the debt or permitted by 

law.’’ 39 And section 807(2)(A) prohibits 

any false representation of ‘‘the 

character, amount, or legal status of any 

debt.’’ 40

Under these provisions, debt 

collectors must only collect or attempt 

to collect the amount that a consumer, 

in fact, owes at the time of a debt 

collection action after all appropriate 

deductions for partial payments by the 

consumer or third parties are made. The 

amounts due on a medical bill can often 

be adjusted multiple times, in light of 

payments made by consumers 

themselves or by third parties, such as 

insurers. Providers may also agree to 

accept a reduced amount in full 

satisfaction of the bill, or reduce the 

amount billed pursuant to a financial 

assistance policy or program. 

Under the FDCPA, the ‘‘amount [ ] 

expressly authorized by the agreement 

creating the debt’’ refers only to the 

remaining balance on a debt that is fully 

owed by the consumer after any 

payments that reduce the debt’s 

remaining balance are deducted because 

such payments reduce the amount that 

the consumer is obligated to pay under 

the original agreement. Accordingly, 

seeking to collect an amount that does 

not account for partial payments or 

changes to the bill made by the provider 

would violate the FDCPA’s prohibitions 

against unfair or unconscionable debt 

collection practices because the amount 

has not been expressly agreed to. In 

other words, once a partial payment has 

been made toward an agreed-to amount, 

collection or attempted collection of the 

full amount without accounting for the 

partial payment is collection of an 

amount greater than that agreed to or 

permitted by law. Such collection or 

attempted collection would also violate 

the FDCPA’s prohibitions against 

deceptive or misleading debt collection 

practices because it would misrepresent 

the amount of the debt actually owed.41

Because payments toward a debt might 

be made at any time, debt collectors are 

responsible for ensuring that the correct 

collection amount is sought during each 

attempt at collection. 

B. Collection of Amounts Not Owed Due 

to Federal or State Law 

Section 808(1) of the FDCPA 

prohibits, in relevant part, the collection 

of any amount ‘‘unless such amount is 

expressly authorized by the agreement 

creating the debt or permitted by 

law.’’ 42 An ‘‘amount expressly 

authorized by the agreement creating 

the debt or permitted by law’’ means 

only a debt that the consumer is legally 

obligated to pay. If a Federal or State 

law relieves consumers of the obligation 

to pay for medical costs, in whole or in 

part, then collection of those costs is not 

‘‘permitted by law’’ but rather 

prohibited by law. Thus, any amount 

that a consumer is not obligated to pay 

by operation of Federal or State law, is 

not an ‘‘amount . . . permitted by law.’’ 

Nor is the amount collectible as an 

‘‘amount [ ] expressly authorized by the 

agreement creating the debt’’ since 

contractual terms that contravene 

Federal or State law are unenforceable 

as contrary to public policy.43


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see also, e.g., United States v. Blue Cross/Blue 

Shield of Ala., 999 F.2d 1542, 1547 (11th Cir. 1993) 

(‘‘The application of a regulatory statute that is 

otherwise valid may not be defeated by private 

contracts.’’) (citing Connolly v. Pension Benefit 

Guaranty Corp., 475 U.S. 211, 224 (1986)); 

SodexoMAGIC, LLC v. Drexel Univ., 24 F.4th 183, 

219–20 (3d Cir. 2022) (‘‘[A] voluntarily-agreed-to 

contract term is enforceable unless a statute or the 

common law specifically prevents enforcement of 

that term.’’) (applying Pennsylvania law); Metcalfe 

v. Grieco Hyundai LLC, 698 F. Supp. 3d 239, 2442 

(D.R.I. 2023) (‘‘Because the [Rhode Island State 

statute] explicitly allows collective actions, the 

class action waiver provision in the Leasing 

Agreement is unenforceable as against public policy 

in Rhode Island.’’) (applying Rhode Island law). 

44See, e.g., Kottler v. Gulf Coast Collection 

Bureau, Inc., 460 F. Supp. 3d 1282, 1293 (S.D. Fla. 

2020), aff’d, 847 F. App’x 542 (11th Cir. 2021) (debt 

collector violated section 807(2)(A) when it 

attempted to collect a debt for which consumer had 

pending workers’ compensation claim); Young v. 

NPAS, Inc., 361 F. Supp. 3d 1171, 1196 (D. Utah 

2019) (debt collector violated FDCPA sections 

807(2)(A) and 808(1) when it attempted to collect 

a debt that consumer did not owe under Utah 

workers’ compensation law); Raytman v. Jeffrey G. 

Lerman, P.C., No. 17 CIV. 9681 (KPF), 2018 WL 

5113952, at *5–6 (S.D.N.Y. Oct. 19, 2018) 

(consumer stated claim for violations of FDCPA 

sections 807 and 808 when debt collector sought to 

collect debt that consumer did not owe under New 

York Medicaid payment rules). 

45See generally CFPB Circular 2022–05: Debt 

collection and consumer reporting practices 

involving invalid nursing home debts (Sept. 8, 

2022), available at: https://www.consumer

finance.gov/compliance/circulars/circular-2022-05- 

debt-collection-and-consumer-reporting-practicesinvolving-invalid-nursing-home-debts/. 

46This may be the case even if terms of the 

contract creating the debt would make a given 

consumer liable. See, e.g., Tuttle v. Equifax Check, 

190 F.3d 9, 13 (2d Cir. 1999) (noting that it would 

be a violation of section 1692f(1) to collect a fee if 

State law expressly prohibits such fees, even if the 

contract allows it). 

47 15 U.S.C. 1692e(2)(A); 12 CFR 1006.18(b)(2)(i). 

48 15 U.S.C. 1692f(1); 12 CFR 1006.22(b). 

49See Requirements Related to Surprise Billing; 

Part II, 86 FR 55980 (Oct. 7, 2021). 

50See CFPB Bulletin 2022–01: Medical Debt 

Collection and Consumer Reporting Requirements 

in Connection With the No Surprises Act, 87 FR 

3025, 3026 (Jan. 20, 2022). 

51See State Surprise Billing Laws and the No 

Surprises Act, accessible at: https://www.cms.gov/ 

files/document/nsa-state-laws.pdf, at 2 (‘‘The No 

Surprises Act supplements State surprise billing 

law protections; it does not replace them.’’). 

52See, e.g., Conn. Gen. Stat. secs. 38a–477aa, 20– 

7f; Mich. Comp. Laws sec. 333.24507. 

53See, e.g., Leslie v. Quest Diagnostics, Inc., No. 

CV171590ESMAH, 2019 WL 4668140, at *7 (D.N.J. 

Sept. 25, 2019) (‘‘Plaintiffs sufficiently allege that 

Quest’s chargemaster prices are unreasonable based 

on Quest’s internal cost structure, the usual and 

customary rates charged, and payments received for 

these services by both Quest and other laboratory 

testing services.’’). 

54Colomar v. Mercy Hosp., Inc., No. 05–22409– 

CIV–SEITZ, 2007 WL 2083562, at *4 (S.D. Fla. July 

20, 2007) (‘‘Florida law is settled that when the 

price term in a contract for hospital services is left 

‘open’ or undefined, then the courts will infer a 

reasonable price.’’). 

A range of laws protect consumers 

from the legal obligation to pay medical 

bills in certain circumstances. For 

example, a State workers’ compensation 

scheme may provide that a medical 

provider only has recourse against a 

patient’s employer or workers’ 

compensation insurer for the treatment 

of a work-related injury.44 And the 

Federal Nursing Home Reform Act 

prohibits, among other things, nursing 

care facilities that participate in 

Medicaid or Medicare from requesting 

or requiring a third-party guarantee of 

payment as a condition of admission, 

expedited admission, or continued stay 

in the facility, and thus nursing care 

facilities cannot collect the debt from 

third parties in violation of this law.45

A debt collector that collects or 

attempts to collect a debt from a 

consumer who is not legally obligated 

on the debt by operation of State or 

Federal law violates the FDCPA’s 

prohibitions against unfair or 

unconscionable debt collection 

practices because the amount is not 

expressly authorized by the agreement 

creating the debt or permitted by law 46

and also violates the FDCPA’s 

prohibitions against deceptive or 

misleading debt collection practices 

because it would falsely represent the 

amount of the debt. Debt collectors are 

responsible for ensuring that they do not 

collect or attempt to collect debts that 

are not legally owed by the relevant 

consumer, whether by operation of State 

or Federal law. 

C. Collection of Amounts Above That 

Permitted by Federal or State Law 

Section 807 prohibits any false 

representation of ‘‘the character, 

amount, or legal status of any 

debt.’’ 47Section 808(1) of the FDCPA 

prohibits, in relevant part, the collection 

of any amount ‘‘unless such amount is 

expressly authorized by the agreement 

creating the debt or permitted by 

law.’’ 48 Debt collectors would violate 

the FDCPA when they collect or attempt 

to collect amounts that exceed limits or 

calculation methods provided by State 

or Federal law, thus misrepresenting the 

consumer’s obligation to pay the debt 

and collecting or attempting to collect 

an amount not permitted by law. Here 

again, a range of laws may operate to 

limit or control the amount that a 

medical provider may bill a patient in 

certain circumstances. For example, the 

Federal No Surprises Act of 2020 

restricts the charges that certain medical 

providers can bill to certain patients 

depending on a number of factors such 

as their insured status and whether a 

billing provider is in- or out-of-network 

for a patient’s health insurance plan.49

As the CFPB has previously stated, the 

FDCPA’s prohibition on 

misrepresentations includes 

misrepresenting that a consumer must 

pay a debt stemming from a charge that 

exceeds the amount permitted by the No 

Surprises Act.50 Thus, for example, a 

debt collector who represents that a 

consumer owes a debt arising from outof-network charges for emergency 

services would violate the prohibition 

on misrepresentations if those charges 

exceed the amount permitted by the No 

Surprises Act. Relatedly, if a Federal 

law limits or caps the amount a 

consumer may be billed in a given 

circumstance, then collection or 

attempted collection of an amount over 

the relevant limit or cap would run 

afoul of the FDCPA’s prohibition on 

collection of amounts unless permitted 

by law. 

State law may also provide a limit on 

the allowable amount that a medical 

provider can bill a consumer. Many 

States have enacted laws to protect 

consumers from unexpected medical 

bills in much the same vein as the 

Federal No Surprises Act and which 

may provide additional protections 

beyond those in the Federal law.51

While State laws vary considerably, 

many include limits on the amounts 

that medical providers, both emergency 

and non-emergency, can bill certain 

consumers and provide specific 

standards to guide billing 

calculations.52 As with the Federal 

statute, where one of these State laws 

applies to limit the amount that a 

medical provider can bill a consumer, a 

debt collector that collects or attempts 

to collect an amount that exceeds the 

relevant limits would violate the 

FDCPA’s prohibition against 

misrepresenting the amount of the debt 

owed and the prohibition against 

collecting or attempting to collect an 

amount unless permitted by law. 

Finally, State contract or common law 

may also provide limits on the 

allowable amount that a medical 

provider can bill a consumer in certain 

circumstances. For example, consumers 

are sometimes billed by medical service 

providers that the consumer did not 

enter into an express agreement with 

prior to receiving the services. In these 

circumstances, some courts have held 

that State contract law provides that the 

relationship between the consumer and 

provider is governed by an implied-infact agreement, the price term of which 

may be limited to a ‘‘reasonable’’ 

amount.53 Courts have also interpreted 

some States’ laws to require that when 

an express contract for medical services 

contains no explicit price term, a 

‘‘reasonable’’ price term should be 

inserted.54 Courts have even invalidated 


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55See, e.g., Ahern v. Knecht, 563 NE2d 787, 793 

(Ill. App. 1990) (price term in contract for appliance 

repair was unconscionable and repairman would be 

allowed only ‘‘the actual value of his services’’); 

Toker v. Westerman, 274 A.2d 78, 81 (N.J. Super. 

1970) (price term in contract for sale of refrigerator 

was unconscionably high; court refused to enforce 

term, relieving the defendant-consumer from 

obligation to pay remaining balance owed); 

Restatement (Second) of Contracts sec. 208— 

Unconscionable Contract or Term, cmt. g (1981) 

(‘‘the offending party [to an unconscionable 

contract] will ordinarily be awarded at least the 

reasonable value of performance rendered by him’’); 

see also De La Torre v. CashCall, Inc., 422 P.3d 

1004, 1009 (Cal. 2018) (‘‘As long established under 

California law, the doctrine of unconscionability 

reaches contract terms relating to the price of goods 

or services exchanged.’’). 

56 Debt collectors may be able to minimize risk of 

misrepresentations in these circumstances by 

working with client medical providers to ensure 

that pricing and billing practices comply with 

applicable legal limits. 

57 15 U.S.C. 1692f(1); 12 CFR 1006.22(b). 

58 15 U.S.C. 1692e(2)(A); 12 CFR 1006.18(b)(2)(i). 

59 Langley v. Statebridge Co., LLC, No. CIV.A. 14– 

6366 JLL, 2014 WL 7336787, at *3 (D.N.J. Dec. 22, 

2014) (consumer stated claim under FDCPA section 

807(2)(A) when debt collector attempt to collect 

debt for tax and insurance payments not actually 

made by creditor); Fitzsimmons v. Rickenbacker 

Fin., Inc., No. 2:11–CV–1315 JCM PAL, 2012 WL 

3994477, at *3 (D. Nev. Sept. 11, 2012). 

60See Centers for Medicare & Medicaid Servs., 

Common Types of Healthcare Fraud, at 2 (2016), 

https://www.cms.gov/files/document/overview

fwacommonfraudtypesfactsheet072616pdf. 

(‘‘Upcoding is a term that is not defined in [] 

regulations but is generally understood as billing for 

services at a higher level of complexity than the 

service actually provided or documented in the 

file.’’); U.S. ex rel. Harris v. Bernad, 275 F. Supp. 

2d 1, 4 (D.D.C. 2003) (‘‘The government alleges that 

the defendants engaged in ‘upcoding’—that is, 

submitted claims with CPT codes that represented 

a level of care higher than the defendants actually 

provided.’’). 

61Nothing in this Advisory Opinion should be 

interpreted to mean that in order to mitigate risk of 

violations of the FDCPA debt collectors should 

obtain access to documents beyond relevant patient 

contracts or bills. Again, debt collectors may be able 

to minimize risk of misrepresentations in these 

circumstances by working with client medical 

providers to ensure appropriate billing practices. 

62See, e.g., Univ. of S. Ala. v. Bracy, 466 So.2d 

148, 150 (Ala. Civ. App. 1985) (stating elements of 

account stated claim under Alabama law in medical 

context); Egge v. Healthspan Servs. Co., No. CIV. 

00–934 ADM/AJB, 2001 WL 881720, at *2 (D. Minn. 

July 30, 2001) (elements of account stated claim 

under Minnesota law in medical context). 

63See, e.g., Grandell Rehab. & Nursing Home, Inc. 

v. Devlin, 809 N.Y.S.2d 481 at *3 (N.Y. Sup. Ct. 

2005) (rejecting nursing home’s account stated 

claim because, among other reasons, receiving 

consumer disputed their liability and the amounts) 

(citing Abbott, Duncan & Wiener v. Ragusa, 214 

A.D.2d 412, 413 (N.Y. App. Div. 1995)). 

64When evaluating a claim under section 807 of 

the FDCPA, courts apply the ‘‘least sophisticated 

debtor’’ standard. See, e.g., Jensen v. Pressler & 

Pressler, 791 F.3d 413, 420 (3d Cir. 2015) (applying 

‘‘least sophisticated debtor’’ standard to evaluate 

liability under section 807); McCollough v. Johnson, 

Rodenburg & Lauinger, LLC, 637 F.3d 939, 952 (9th 

explicit price terms in contracts when 

those terms were determined to be 

unconscionable under State law, often 

limiting the price that must be paid to 

some ‘‘reasonable’’ amount as a 

remedy.55

The CFPB reminds debt collectors 

that State law may determine or limit 

the amount that medical providers may 

charge to consumers, and that collection 

of or an attempt to collect an amount 

that exceeds the allowable amount 

under State law (including applicable 

State case law) may misrepresent the 

amount of the debt in violation of the 

FDCPA. Collection or an attempt to 

collect an amount that exceeds the 

allowable amount under State law may 

also violate the prohibition against 

collecting or attempting to collect an 

amount unless permitted by law. These 

State law cases make clear that the 

collection amount that is ‘‘permitted by 

law’’ may be much less than the amount 

asserted to be owed by the medical 

provider. Debt collectors are responsible 

for ensuring that they do not collect or 

attempt to collect amounts above that 

which the relevant consumer(s) can be 

charged under applicable State and 

Federal laws. Because, as noted above, 

the FDCPA imposes strict liability, debt 

collectors should ensure that they only 

collect or attempt to collect amounts 

that may be charged under applicable 

State law.56

D. Collection of Amounts Not Owed 

Because Services Not Received 

Section 808(1) of the FDCPA 

prohibits, in relevant part, the collection 

of any amount ‘‘unless such amount is 

expressly authorized by the agreement 

creating the debt or permitted by 

law.’’ 57 And section 807(2)(A) prohibits 

any false representation of ‘‘the 

character, amount, or legal status of any 

debt.’’ 58 As relevant here, the ‘‘amount 

[] expressly authorized by the agreement 

creating the debt’’ means amounts due 

for services actually rendered under the 

relevant agreement. Similarly, a ‘‘false 

representation of the . . . amount . . . 

of any debt’’ includes a representation 

to a consumer that they owe an amount 

for services that have not been rendered. 

Courts have held that it is a violation 

of the FDCPA for debt collectors to 

collect or attempt to collect amounts for 

services that were not rendered.59

Medical bills, especially for services 

rendered in hospitals, are frequently 

calculated by reference to a 

standardized set of codes that indicate 

the type and degree of medical care a 

patient received. Typically, providers 

will seek greater compensation for more 

serious, more urgent, or more involved 

forms of care. As noted above, if a 

medical provider designates an aspect of 

a patient’s care with a code that denotes 

a higher or more involved level of care 

than was actually received, the provider 

is said to be ‘‘upcoding.’’ 60

A debt collector that collects or 

attempts to collect a debt that has been 

‘‘upcoded’’ violates the FDCPA’s 

prohibitions against unfair or 

unconscionable debt collection 

practices because the amount is not 

expressly authorized by the agreement 

for services actually rendered and also 

violates the FDCPA’s prohibitions 

against deceptive or misleading debt 

collection practices because it would 

falsely represent the amount of the debt. 

Debt collectors are responsible for 

ensuring that they do not collect or 

attempt to collect amounts that have 

been charged for services that have not 

actually been rendered.61

IV. Misrepresentation of the Nature of 

Legal Obligations 

Section 807(2)(A) prohibits any false 

representation of ‘‘the character, 

amount, or legal status of any debt.’’ A 

‘‘false representation of the . . . legal 

status of any debt’’ includes 

representations to a consumer about the 

legal nature of the provider’s claim for 

payment and the legal rights and 

obligations that arise under that 

particular type of claim. 

As described above, there are a variety 

of ways in which medical bills and the 

amounts demanded therein differ from 

consumer transactions where a 

consumer agrees to a known and 

definite price in exchange for goods or 

services. In medical billing, consumers 

sometimes enter agreements that have 

undefined price terms or are billed by 

providers with whom the consumer has 

never entered into an express 

agreement. The legal basis for a 

provider’s claim for payment in such 

circumstances therefore also varies, and 

each such basis may have different 

implications for a consumer’s legal 

rights or obligations. For example, 

under some States’ laws, providers 

sometimes demand payment for services 

on the basis of an account stated theory, 

whereby a party presents another with 

an alleged statement of account and a 

legal obligation to pay that amount 

arises if the receiving party does not 

object within a reasonable period of 

time.62 The inverse is also true under 

these State’s laws: an account stated 

claim cannot be maintained if the 

receiving party disputes the alleged 

statement of account within a 

reasonable period of time before making 

payments on the account.63

However, the variations in medical 

billing and the associated legal 

consequences are not readily apparent 

or known to most consumers.64 Most 


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Cir. 2011) (same); Jeter v. Credit Bureau, Inc., 760 

F.2d 1168, 1177 n.11 (11th Cir. 1985) (same). 65See, e.g., Miller v. Carrington Mortgage Servs., 

LLC, 607 B.R. 1, 5–6 (D. Me. 2019) (consumer 

alleged fear that ‘‘he would never be free from 

demands for payment’’ or that debt collector had 

‘‘found a way of getting around the bankruptcy 

discharge protections.’’); cf. Daugherty v. 

Convergent Outsourcing, Inc., 836 F.3d 507, 513 

(5th Cir. 2016) (‘‘[A] collection letter seeking 

payment on a time-barred debt (without disclosing 

its unenforceability) but offering a ‘settlement’ and 

inviting partial payment (without disclosing the 

possible pitfalls) could constitute a violation of the 

FDCPA.’’); Buchanan v. Northland Grp., Inc., 776 

F.3d 393, 399 (6th Cir. 2015) (consumer stated 

claim under section 807(2)(A) when debt collector 

offered to ‘‘settle’’ time-barred debt at a discount 

and noting that rule under Michigan law that partial 

payment revives a time-barred debt ‘‘is almost 

assuredly not within the ken of most people, 

whether sophisticated, whether reasonably 

unsophisticated, or whether unreasonably 

unsophisticated’’). 

66C.f. Shula v. Lawent, 359 F.3d 489, 491–92 (7th 

Cir. 2004) (affirming finding of liability under 

section 807 where debt collector attempted to 

collect amount of court costs that were not in fact 

awarded in State law action); Van Westrienen v. 

Americontinental Collection Corp., 94 F. Supp. 2d 

1087, 1101–02 (D. Or. 2000) (consumer stated claim 

under section 807(2)(A) when debt collector’s 

communications suggested that wage garnishment 

or asset seizure would occur ‘‘within 5 days’’ when 

such legal action was not procedurally possible in 

that time span); Biber v. Pioneer Credit Recovery, 

Inc., 229 F. Supp. 3d 457, 473–74 (E.D. Va. 2017) 

(consumer stated claim under section 807(2)(A) 

when debt collector threatened to garnish wages 

without disclosing that it had not in fact taken 

preliminary procedural steps required to do so). 

67See Debt Collection Practices (Regulation F), 

Final Rule, 85 FR 76734, 76857 (Nov. 30, 2020) 

(codified at 12 CFR part 1006) (‘‘[I]it is clear that 

a debt collector must have (or have access to) 

records reasonably substantiating its claim that a 

consumer owes a debt in order to avoid engaging 

in deceptive or unfair collection practices in 

violation of the FDCPA when it attempts to collect 

the debt.’’). 

68As noted above, nothing in this Advisory 

Opinion should be interpreted to mean that in order 

to mitigate risk of violations of the FDCPA debt 

collectors are encouraged to obtain access to 

documents beyond relevant patient contracts or 

bills as permitted under applicable privacy laws. 

69See 26 U.S.C. 501(r). 

70This example is provided merely as an 

illustration of the kinds of information that may be 

necessary to properly substantiate debt collection 

information in a given circumstance and is not 

offered as a complete or exhaustive list that would 

guarantee compliance in all circumstances. 

consumers understand a demand for 

payment from a debt collector to mean 

that they owe the full amount 

demanded. The least sophisticated 

consumer presented with a demand for 

payment may believe that the full 

demanded amount is legally owed.65 In 

particular, a consumer may be unlikely 

to know that, in the absence of an 

express agreement and definite price 

term, a debt collector’s demand for 

payment may not accurately reflect the 

consumer’s actual legal obligation to the 

provider under State law.66

A debt collector that collects or 

attempts to collect a debt where the 

amount is not based on an express 

contractual price term risks violating the 

FDCPA’s prohibitions against deceptive 

or misleading debt collection practices 

if the debt collector gives the misleading 

impression that the amount demanded 

is final and that precise amount is 

legally owed. Moreover, because, as 

noted above, the FDCPA imposes strict 

liability, debt collectors are responsible 

for ensuring that they do not collect or 

attempt to collect debts in a way that 

deceives or misleads a consumer, 

explicitly or impliedly, about the legal 

status of the medical provider’s claim 

and a consumer’s right to object to 

claims, as appropriate; a debt collector 

may misrepresent the legal status of the 

debt even if the collector is relying on 

information provided by the medical 

provider. When dealing with 

uncertainty arising from the lack of 

express agreement, debt collectors may 

be able to minimize their risk of 

engaging in violations by 

communicating clearly and 

conspicuously with consumers about 

the legal status of the debt and the 

amount owed, for example, as 

appropriate, that an enforceable 

payment obligation may not exist until 

proven in court. 

V. Substantiation of Medical Debts 

Section 807(2)(A) prohibits any false 

representation of ‘‘the character, 

amount, or legal status of any debt.’’ 

When a debt collector makes a demand 

for payment of a debt or otherwise 

represents that a consumer owes a debt, 

the collector makes an implied 

representation that it has a reasonable 

basis to assert the character, amount, 

and legal status of the debt.67 A debt 

collector violates the prohibition against 

false representations if the collector has 

no reasonable basis on which to 

represent that the specific amount 

demanded is due and legally collectible. 

The many unique features of the 

markets for medical care and services 

present particularly acute risks of 

uncertainty as to the ‘‘character, 

amount, or legal status’’ of debts that are 

incurred in these markets. As described 

above, the health care market is 

complex, variable, and opaque. Prices 

charged by providers vary widely even 

for the same treatment or procedure and 

are often conditional, changing based on 

factors that often cannot be known 

before services are rendered. A variety 

of State and Federal laws may impact a 

consumer’s liability for payment, in 

whole or in part, or for the amount that 

may be charged. Billing and payment 

are complicated by the involvement of 

third-party payors such as insurers, 

public compensation programs, or 

tortfeasors. And the nature or legal basis 

of a provider’s claim for payment may 

be unclear, often due to a lack of express 

agreements. While this level of 

uncertainty may arise from the 

inherently complex reality of medical 

care and the broader heath care system, 

it underscores the need for debt 

collectors to properly substantiate the 

character, amount, and legal status of 

medical debt before they begin 

collection, in accord with consumer’s 

expectations that debt collectors have a 

reasonable basis for their demands.68

Although a debt collector must be 

able to substantiate claims regarding the 

amount and validity of the debt made to 

a consumer, including those made at the 

outset of collection, the type and 

amount of information that is necessary 

to substantiate a particular 

representation will vary depending 

upon the claim itself, the circumstances 

surrounding the claim, and the need to 

observe patients’ privacy rights under 

relevant law. The inherently uncertain 

and conditional nature of the costs of 

and payments for medical care means 

that debt collectors should exercise 

heightened care to ensure that they have 

a reasonable basis to assert that the debt 

is legally collectible and the specific 

amount is owed. For example, consider 

a debt collector that receives summary 

information concerning accounts for 

collection from a provider group that 

operates within a hospital. An initial 

reasonable step to substantiate the debts 

prior to collection may include 

obtaining any relevant patient 

agreements or contracts executed by the 

relevant patients. If, as is often the case, 

there is no contract between patients 

and the provider group, the debt 

collector may need documents sufficient 

to make a prima facie case for the 

demanded amount under the applicable 

State law. Consider another example 

where a debt collector is onboarding a 

hospital client. The debt collector may 

reduce risk of liability if it has access to 

full payment histories for the patient 

accounts, including any payments from 

third parties covering any portion of an 

overall demanded amount, and to 

confirm the hospital’s compliance with 

any affirmative legal obligations, such as 

requirements to assess consumers under 

financial assistance policies if the 

hospital is a non-profit 69 or otherwise 

participates in financial assistance 

programs, to ensure that there is a 

reasonable basis for the demanded 

amount.70

Regulators, including the CFPB, have 

brought actions against debt collectors 

for failing to substantiate collection 


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71See, e.g., Complaint for Civil Penalties, 

Injunctive and Other Relief, United States v. Asset 

Acceptance, LLC, No. 12–00182 (M.D. Fla. Jan. 30, 

2012), ECF No. 1 (Asset Acceptance Compl.); 

Consent Order, Encore Capital Grp., Inc., CFPB No. 

2015–CFPB–0022 (Sept. 9, 2015) (Encore Consent 

Order); Consent Order, Portfolio Recovery Assocs., 

LLC, CFPB No. 2015–CFPB–0023 (Sept. 9, 2015) 

(PRA Consent Order). 

72See Asset Acceptance Compl. ¶¶ 9–10; Encore 

Consent Order, ¶ 22; PRA Consent Order, ¶ 24. 

73See Asset Acceptance Compl., ¶ 11; Encore 

Consent Order, ¶ 23; PRA Consent Order, ¶ 27. 

74See Asset Acceptance Compl., ¶ 11–16, 49–52; 

Encore Consent Order, ¶¶ 24–35; PRA Consent 

Order, ¶¶ 28–32. 

75See Asset Acceptance Compl., ¶ 81–83; Encore 

Consent Order, ¶ 112–114; PRA Consent Order, 

¶ 103–105. 

76See Asset Acceptance Compl., ¶ 54–55; Encore 

Consent Order, ¶ 45–47, 78–81, 103–105; PRA 

Consent Order, ¶ 63–66, 94–96,. 

77 15 U.S.C. 1692e (‘‘A debt collector may not use 

any false, deceptive, or misleading representation or 

means in connection with the collection of any 

debt.) (emphasis added); 15 U.S.C. 1692f (‘‘A debt 

collector may not use unfair or unconscionable 

means to collect or attempt to collect any debt.’’) 

(emphasis added). 78 15 U.S.C. 1692a(6). Section 803 also provides 

that the term ‘‘debt collector’’ ‘‘includes any 

creditor who, in the process of collecting his own 

debts, uses any name other than his own which 

would indicate that a third person is collecting or 

attempting to collect such debts’’ as well as, ‘‘[f]or 

the purpose of section 808(6), . . . any person who 

uses any instrumentality of interstate commerce or 

the mails in any business the principal purpose of 

which is the enforcement of security interests.’’ 15 

U.S.C. 1692a(6). The term ‘‘creditor’’ is defined as 

‘‘any person who offers or extends credit creating 

a debt or to whom a debt is owed, but such term 

does not include any person to the extent that he 

receives an assignment or transfer of a debt in 

default solely for the purpose of facilitating 

collection of such debt for another.’’ 15 U.S.C. 

1692a(4). 

79 15 U.S.C. 1692a(6)(F)(iii). The exemptions 

under section 803a(6)(F)—including the exemption 

for debt collection activity that ‘‘concerns a debt 

which was not in default at the time it was obtained 

by such person’’—explicitly apply only to persons 

collecting or attempting to collect debts ‘‘owed or 

due another.’’ Compare 15 U.S.C. 1692a(6)(F) 

(exemption that references ‘‘owed or due another’’) 

with 15 U.S.C. 1692a(6)(A)–(E) (exemptions that do 

not use ‘‘owed or due another’’ language). 

80 De Dios v. Int’l Realty & Invs., 641 F.3d 1071, 

1074 (9th Cir. 2011). Outcomes for non-express 

agreements may vary considerably under relevant 

State law, and this Advisory Opinion takes no 

position on the correct interpretation of those laws. 

81See, e.g., Lawson v. FMR LLC, 571 U.S. 429, 440 

(2014); see also, e.g., Taniguchi v. Kan Pac. Saipan, 

Ltd., 566 U.S. 560, 566 (2012) (‘‘When a term goes 

undefined in a statute, we give the term its ordinary 

meaning.’’). 

82See, e.g., Default Merriam-Webster.com 

Dictionary, https://www.merriam-webster.com/ 

dictionary/default/ (accessed Aug. 19, 2024) 

(‘‘failure to do something required by duty or law 

. . . a failure to pay financial debts’’; Default, 

Black’s Law Dictionary (11th ed. 2019) (‘‘The 

omission or failure to perform a legal or contractual 

duty; esp., the failure to pay a debt when due.’’); 

Default, Ballentine’s Law Dictionary (3d ed. 1969) 

(‘‘Fault; neglect; omission; the failure to perform a 

duty or obligation; the failure of a person to pay 

money when due or when lawfully demanded.’’). 

83See, e.g., The Restatement (First) of Contracts 

Index D80 (1932) (‘‘Default: See Breach of 

Contract.’’); Restatement (Second) of Contracts sec. 

235(2) (1981) (‘‘When performance of a duty under 

a contract is due any non-performance is a 

breach.’’); 23 Williston on Contracts sec. 63:16 (4th 

ed.) (‘‘It is a material breach of a contract to fail to 

pay any substantial amount of the consideration 

owing under the contract.’’); Butler Mach. Co. v. 

Morris Constr. Co., 682 NW2d 773, 778 (S.D. 2004) 

(‘‘Morris was to make monthly payments of $5,547 

and its failure to make such monthly payments 

constituted a default under the terms of that 

agreement.’’). 

84See Ward v. NPAS, Inc., 63 F.4th 576, 583–84 

(6th Cir. 2023) (Though medical provider’s bill said 

‘‘due on receipt’’ court considered evidence that 

provider ‘‘didn’t treat Ward’s failure to pay 

immediately as a breach’’ dispositive to the 

question of whether debt was in default when 

placed with third-party.); Prince v. NCO Fin. Servs., 

Inc., 346 F. Supp. 2d 744, 749 (E.D. Pa. 2004) (‘‘This 

evidence of Capital One’s State of mind with regard 

to whether the debt was in default is a satisfactory 

initial showing that Capital One did not consider 

Prince’s account to be ‘‘in default.’’); Roberts v. 

NRA Grp., LLC, No. CIV.A. 3:11–2029, 2012 WL 

3288076, at *6 (M.D. Pa. Aug. 10, 2012) (‘‘[W]hether 

Plaintiff’s account was in default will be 

determined by looking at the ‘state of mind’ of the 

creditor to see whether the creditor considered the 

debt to be in default.’’). 

information for accuracy and 

completeness before beginning 

collection efforts when there were 

indications that the information suffered 

from a high degree of uncertainty or 

unreliability.71 For example, many debt 

collectors operate as ‘‘debt buyers,’’ 

purchasing large portfolios of debts from 

creditors or other debt collectors at 

significant discounts from the face value 

of the underlying debts.72 These 

‘‘portfolios’’ of debts may functionally 

be little more than spreadsheets 

containing purported information 

concerning debts and may not be 

accompanied by underlying contracts, 

customer agreements, or other 

documentation evidencing the existence 

and amount of the debts.73 This 

information may be facially unreliable, 

such as when the sellers of the debt 

explicitly disclaim its accuracy or 

collectability or when it is readily 

apparent that the information is 

inaccurate.74 In these circumstances, the 

CFPB and other regulators have alleged 

that the debt collectors were on notice 

that collecting or attempting to collect 

the purported debts based on the 

information in their possession could 

lead to widespread or repeated 

violations of section 807(2)(A).75

Proceeding to collect the purported 

debts based on that unsubstantiated 

information misrepresented to the 

affected consumers that the collectors 

had a reasonable basis for their 

collection attempts.76 Importantly, this 

misrepresentation did not rely on a 

finding that the claimed amount was 

incorrect—for which a debt collector 

can be separately liable, see generally 

section II, supra—but on their failure to 

substantiate the validity and amounts of 

the debts that were sought. 

Debt collectors working with medical 

debts are responsible for ensuring that 

they possess a reasonable basis for 

collecting or attempting to collect those 

debts. Collecting or attempting to collect 

medical debts without substantiation 

violates section 807(2)(A). 

VI. Defining Default Under the FDCPA 

The prohibitions imposed by sections 

807 and 808 of the FDCPA apply only 

to ‘‘debt collectors.’’ 77 As relevant here, 

Section 803 of the FDCPA defines ‘‘debt 

collector’’ in two ways: (1) ‘‘any person 

who uses any instrumentality of 

interstate commerce or the mails in any 

business the principal purpose of which 

is the collection of any debts,’’ or (2) any 

person ‘‘who regularly collects or 

attempts to collect, directly or 

indirectly, debts owed or due or 

asserted to be owed or due another.’’ 78

The statute also provides a limited 

number of exemptions from the 

definition of ‘‘debt collector.’’ One of 

those exemptions carves out of the 

definition ‘‘any person collecting or 

attempting to collect any debt owed or 

due or asserted to be owed or due 

another to the extent such activity . . . 

concerns a debt which was not in 

default at the time it was obtained by 

such person.’’ 79 In the context of 

medical debt collection, for purposes of 

section 803(6)(F)(iii)’s exemption, 

whether a debt is ‘‘in default’’ is 

determined by the terms of any 

agreement between the consumer and 

the medical provider under applicable 

law governing the agreement.80

The term ‘‘default’’ is not specifically 

defined in the FDCPA, so the meaning 

of the term should first be determined 

by its ordinary meaning.81 ‘‘Default’’ is 

commonly defined as the failure to 

satisfy an agreement, promise, or 

obligation, especially a failure to make 

a payment when due.82 These 

definitions are consistent with the 

longstanding common law use of the 

word as a party’s failure to perform 

contractual obligations at the time they 

come due.83 Further, applicable law— 

typically State contract law—may 

determine when obligations are due 

under a contract. 

However, some third-party firms 

collecting on past-due medical bills 

have argued that the bills were not in 

default because the firm or the creditor 

did not consider or treat the accounts as 

in default until some later date.84 To the 

contrary, under the plain meaning of 

‘‘default,’’ when a ‘‘default’’ has 

occurred for purposes of section 

803(6)(F)(iii) with respect to medical 

bills is determined based on the terms 

of the relevant consumer-provider 


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85 Mavris v. RSI Enters., 86 F. Supp. 3d 1079, 

1088 (D. Ariz. 2015). 

86Echlin v. Dynamic Collectors, Inc., 102 F. Supp. 

3d 1179, 1185 (W.D. Wash. 2015) (rejecting 

defendant’s argument that it did not ‘‘consider’’ 

plaintiffs debt to be in default until a particular 

dunning letter was sent because ‘‘Dynamic’s belief 

that Echlin’s account was not in default is not 

dispositive of whether default had in fact 

occurred’’); Hartman v. Meridian Fin. Servs., Inc., 

191 F. Supp. 2d 1031, 1043–44 (W.D. Wis. 2002) 

(holding that defendant did not meet section 

803(6)(F)(iii) exception and rejecting argument that 

defendant does not ‘‘consider’’ a buyer to be in 

default before end of 30-day cure period when 

buyer’s contract with creditor expressly provided 

that buyer would be in default ‘‘if he fails to pay 

on time’’). 

87S. Rep. No. 95–382, at 3–4 (1977), as reprinted 

in 1977 U.S.C.C.A.N. 1695, 1698. In its section-bysection discussion of the bill, the report reiterates 

that ‘‘The term [debt collector] does not include 

. . . persons who service debts for others.’’ S. Rept. 

No. 95–382, at 7, 1977 U.S.C.C.A.N. 1695, 1701. 

88Of course, an entity that operates as a mortgage 

servicer does not enjoy a blanket exemption from 

the FDCPA for all its activities and can still satisfy 

the definition of ‘‘debt collector’’ for those debts 

that were in default when they were obtained by the 

entity. See, e.g., Babadjanian v. Deutsche Bank 

Nat’l Tr. Co., No. CV1002580MMMRZX, 2010 WL 

11549894, at *5 (C.D. Cal. Nov. 12, 2010) (collecting 

cases); S. Rep. No. 95–382, at 3–4 (1977), as 

reprinted in 1977 U.S.C.C.A.N. 1695, 1698 (‘‘so long 

as the debts were not in default when taken for 

servicing). 

89See, e.g., Alibrandi v. Fin. Outsourcing Servs., 

Inc., 333 F.3d 82, 86 (2d Cir. 2003) (collecting cases 

that ‘‘distinguish[] between a debt that is in default 

and a debt that is merely outstanding’’); FTC, 

Annual Report to Congress on the Fair Debt 

Collection Practices Act (2000), (available at: 

https://www.ftc.gov/reports/annual-report-congressfair-debt-collection-practices-act-0) (‘‘[Section 

803(6)(F)(iii)] was designed to avoid application of 

the FDCPA to mortgage servicing companies, whose 

business is accepting and recording payments on 

current debts.’’) (emphasis in original) (citing S. 

Rep. No. 95–382). 

90See 15 U.S.C. 1692(e) (‘‘It is the purpose of this 

subchapter to eliminate abusive debt collection 

practices by debt collectors, to insure that those 

debt collectors who refrain from using abusive debt 

collection practices are not competitively 

disadvantaged, and to promote consistent State 

action to protect consumers against debt collection 

abuses.’’). 

91See, e.g., Salinas v. R.A. Rogers, Inc., 952 F.3d 

680, 683 (5th Cir. 2020) (‘‘Because Congress 

intended the FDCPA to have a broad remedial 

scope, the FDCPA should be construed broadly and 

in favor of the consumer.’’) (internal quotations 

omitted); Brown v. Card Serv. Ctr., 464 F.3d 450, 

453 (3d Cir. 2006) (‘‘Because the FDCPA is a 

remedial statute . . . we construe its language 

broadly, so as to effect its purpose. . . .’’); Johnson 

v. Riddle, 305 F.3d 1107, 1117 (10th Cir. 2002) 

(‘‘Because the FDCPA, like the Truth in Lending 

Act (TILA), 15 U.S.C. 1601 et seq., is a remedial 

statute, it should be construed liberally in favor of 

the consumer.’’). 

92See. e.g., Alibrandi v. Fin. Outsourcing Servs., 

Inc., 333 F.3d 82, 88 (2d Cir. 2003) (rejecting 

argument by debt collector that default status of 

debt should be determined by a ‘‘letter agreement’’ 

between the collector and creditor); Echlin v. 

Dynamic Collectors, Inc., 102 F. Supp. 3d 1179, 

1185 (W.D. Wash. 2015) (‘‘Dynamic’s belief that 

Echlin’s account was not in default is not 

dispositive of whether default had in fact 

occurred.’’); Mavris v. RSI Enters., 86 F. Supp. 3d 

1079, 1086 (D. Ariz. 2015) (‘‘[T]he lender’s 

subjective choice that the debtor has not defaulted 

cannot be dispositive of whether default has in fact 

occurred. If it were, debtors’ access to FDCPA 

protections would be subject to the whim of 

creditors, who could leave debtors completely in 

the dark about when, if ever, those protections 

commence. Objective indicia of a creditor’s 

treatment of a debt are entitled to greater weight.’’). 

93See, e.g., FTC, Staff Opinion Letter, 1989 WL 

1178045 at *1 n.2 (Apr. 25, 1989) (‘‘Whether a debt 

is in default is generally controlled by the terms of 

the contract creating the indebtedness and 

applicable state law.’’). 

agreements under applicable law. It is 

the terms of the contract—the 

‘‘[o]bjective indicators of the debt’s 

status’’ at the time it was obtained 85— 

that governs when collection of medical 

debts is covered by the FDCPA, not the 

subjective state of mind of the medical 

debt collector.86

In addition to being consistent with 

the term’s plain meaning, reading 

‘‘default’’ as coextensive with 

contractual breach under applicable law 

is consistent with Congress’s intent to 

apply this exemption to ‘‘servicers’’ of 

debt that is not in default at the time the 

person obtains it. The FDCPA’s 

legislative history explains that 

Congress ‘‘[did] not intend the 

definition [of debt collector] to cover the 

activities of . . . mortgage service 

companies and others who service 

outstanding debts for others, so long as 

the debts were not in default when 

taken for servicing.’’ 87 These references 

make clear the intended distinction 

between a consumer who has failed to 

meet their contractual obligation to pay 

and a consumer who has an outstanding 

debt but under their contract repays it 

over a defined period of time (i.e., their 

failure to pay the entire outstanding 

balance on a payment due date does not 

breach the contract).88 Courts and the 

Federal Trade Commission (FTC) have 

likewise recognized a distinction 

between a debt that may yet be 

‘‘outstanding’’ but for which a consumer 

is not necessarily ‘‘in default.’’ 89

In the context of medical debt, 

amounts owed are not typically paid on 

a regular, recurring schedule over time 

pursuant to the terms of a contract. To 

the contrary, as noted above, medical 

debts are contractually generally due in 

full at a given time. Medical debt 

collectors therefore do not ‘‘service’’ 

debts on an ongoing basis like the 

mortgage servicers intended to be 

covered by this exemption. 

To be sure, the terms of a given 

contract or the principles of applicable 

law may differentiate between one (or 

more) missed payments and contractual 

breach, in which case the debt may not 

be ‘‘in default’’ if a single payment is 

missed. But absent such terms or 

applicable legal principle, failure to 

make full payment by the given time 

constitutes a breach of the consumer’s 

contractual obligation. If a person 

obtains that debt (or the right to collect 

it) after that failure to make full 

payment, that person has obtained a 

debt ‘‘in default at the time it was 

obtained’’ and therefore does not qualify 

for the section 803(6)(F)(iii) exemption. 

Finally, defining ‘‘default’’ for 

purposes of section 803(6)(F)(iii) by 

reference to relevant consumer-provider 

agreements and background legal 

principles also best effectuates the 

statute’s purpose and Congress’ intent, 

closes off avenues for regulatory 

evasion, and is consistent with prior 

regulatory interpretations. The FDCPA 

is a remedial consumer protection 

statute aimed at curbing abusive and 

unscrupulous conduct by debt 

collectors and establishing 

comprehensive national standards for 

the debt collection industry.90 As such, 

the statute’s provisions are interpreted 

liberally in favor of consumers’ 

interests.91 Defining ‘‘default’’ by 

reference to the relevant consumer 

agreements and applicable governing 

law advances consumer interests 

because it is an objective, transparent 

standard that a consumer or their 

advocate can apply to ascertain the 

status of a party seeking to collect 

money that is claimed to be owed by the 

consumer. Relatedly, an objective 

standard for defining ‘‘default’’ prevents 

debt collectors from attempting to 

expand the section 803(6)(F)(iii) 

exemption by reference to the subjective 

intent or belief of the collector or 

creditor or by reference to agreements or 

policy documents that the consumer has 

no access to.92 And this interpretation is 

consistent with prior staff advisory 

opinions on this definition issued by the 

FTC in the period when that agency had 

primary regulatory authority over the 

FDCPA.93

VII. Regulatory Matters 

The CFPB has concluded that the 

advisory opinion is an interpretive rule 

in part and a general statement of policy 

in part. Insofar as the advisory opinion 

constitutes an interpretive rule, it is 

issued under the CFPB’s authority to 

interpret the Fair Debt Collection 

Practices Acts and Regulation F, 

including under section 1022(b)(1) of 

the Consumer Financial Protection Act 

of 2010, which authorizes guidance as 

may be necessary or appropriate to 

enable the CFPB to administer and carry 


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94 12 U.S.C. 5512(b)(1). 

95 44 U.S.C. 3501–3521. 

96 5 U.S.C. 801 et seq. 

out the purposes and objectives of 

Federal consumer financial laws.94

Insofar as the advisory opinion 

constitutes a general statement of 

policy, it provides background 

information about applicable law and 

articulates considerations relevant to the 

CFPB’s exercise of its authorities. It does 

not confer any rights of any kind. 

The CFPB has determined that this 

rule does not impose any new or revise 

any existing recordkeeping, reporting, or 

disclosure requirements on covered 

entities or members of the public that 

would be collections of information 

requiring approval by the Office of 

Management and Budget under the 

Paperwork Reduction Act.95

Pursuant to the Congressional Review 

Act,96 the CFPB will submit a report 

containing this interpretive rule and 

other required information to the United 

States Senate, the United States House 

of Representatives, and the Comptroller 

General of the United States prior to the 

rule’s published effective date. The 

Office of Information and Regulatory 

Affairs has designated this interpretive 

rule as a ‘‘major rule’’ as defined by 5 

U.S.C. 804(2). 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–22962 Filed 10–3–24; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2024–0768; Project 

Identifier AD–2022–00504–R; Amendment 

39–22825; AD 2024–16–19] 

RIN 2120–AA64 

Airworthiness Directives; Bell Textron 

Inc. Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Bell Textron Inc. Model 212, 412, 

412CF, and 412EP helicopters. This AD 

was prompted by reports of cracked tail 

boom attachment barrel nuts (barrel 

nuts). This AD requires replacing all 

steel alloy barrel nuts with nickel alloy 

barrel nuts, replacing or inspecting 

other tail boom attachment point 

hardware, repetitively inspecting 

torque, and repetitively replacing tail 

boom attachment bolts (bolts). This AD 

also prohibits installing steel alloy 

barrel nuts. The FAA is issuing this AD 

to address the unsafe condition on these 

products. 

DATES: This AD is effective November 8, 

2024. 

The Director of the Federal Register 

approved the incorporation by reference 

of certain publications listed in this AD 

as of November 8, 2024. 

ADDRESSES: 

AD Docket: You may examine the AD 

docket at regulations.gov under Docket 

No. FAA–2024–0768; or in person at 

Docket Operations between 9 a.m. and 

5 p.m., Monday through Friday, except 

Federal holidays. The AD docket 

contains this final rule, any comments 

received, and other information. The 

address for Docket Operations is U.S. 

Department of Transportation, Docket 

Operations, M–30, West Building 

Ground Floor, Room W12–140, 1200 

New Jersey Avenue SE, Washington, DC 

20590. 

Material Incorporated by Reference: 

• For Bell material identified in this 

AD, contact Bell Textron Inc., P.O. Box 

482, Fort Worth, TX 76101; phone: (450) 

437–2862 or 1–800–363–8023; fax: (450) 

433–0272; email: productsupport@

bellflight.com; or website: 

bellflight.com/support/contact-support. 

• You may view this material at the 

FAA, Office of the Regional Counsel, 

Southwest Region, 10101 Hillwood 

Parkway, Room 6N–321, Fort Worth, TX 

76177. For information on the 

availability of this material at the FAA, 

call (817) 222–5110. It is also available 

at regulations.gov under Docket No. 

FAA–2024–0768. 

FOR FURTHER INFORMATION CONTACT: 

Jacob Fitch, Aviation Safety Engineer, 

FAA, 1801 S Airport Road, Wichita, KS 

67209; phone: (817) 222–4130; email: 

jacob.fitch@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 by adding an AD that would 

apply to certain serial-numbered Bell 

Textron Inc. (Bell) Model 212, 412, 

412CF, and 412EP helicopters. The 

NPRM published in the Federal 

Register on May 8, 2024 (89 FR 38841). 

The NPRM was prompted by reports of 

cracked barrel nuts on Model 412EP 

helicopters. According to Bell, the root 

cause for cracking can vary from 

corrosion damage, high time in service, 

or hydrogen embrittlement. Barrel nut 

cracking can also cause loss of torque on 

the associated bolt and subsequent bolt 

cracking. Due to design similarities, 

Model 212, 412, and 412CF helicopters 

are also affected. 

In the NPRM, the FAA proposed to 

require, for certain serial-numbered 

Model 212, 412CF, 412, and 412EP 

helicopters, replacing the upper lefthand (LH) steel alloy barrel nut and bolt 

with a new nickel alloy barrel nut, 

retainer, and bolt. For certain other 

serial-numbered Model 412 and 412EP 

helicopters, the FAA proposed to 

require removing the upper LH steel 

alloy barrel nut, inspecting the removed 

upper LH steel alloy barrel nut and 

replacing it with a nickel alloy barrel 

nut and retainer, and either inspecting 

or replacing the upper LH bolt. For 

those serial-numbered Model 212, 412, 

412CF, and 412EP helicopters, the FAA 

also proposed to require removing the 

upper right-hand (RH), lower LH, and 

lower RH steel alloy barrel nuts, 

inspecting those removed steel alloy 

barrel nuts and replacing them with 

new nickel alloy barrel nuts and 

retainers, and either inspecting or 

replacing the upper RH, lower LH, and 

lower RH bolts. Thereafter for those 

helicopters, as well as for one additional 

serial-numbered Model 412/412EP 

helicopter, the FAA proposed to require 

inspecting the torque applied on each 

bolt to determine if the torque has 

stabilized and, depending on the results, 

replacing and inspecting certain tail 

boom attachment point hardware and 

repeating the torque inspections, or 

applying torque stripes. For all 

applicable helicopters, the FAA 

proposed to require repetitively 

inspecting the torque applied on each 

bolt within a longer-term compliance 

time interval and, depending on the 

results, replacing and inspecting certain 

tail boom attachment point hardware 

and repeating the torque inspections 

and stabilization, or applying torque 

stripes. Additionally, for all applicable 

helicopters, within a longer-term 

compliance time interval, the FAA 

proposed to require repetitively 

replacing the upper LH bolt and 

inspecting the other three bolts and, 

depending on the results, taking 

corrective action. Following 

accomplishment of those actions, the 

FAA proposed to require inspecting the 

torque applied on each bolt to 

determine if the torque has stabilized 

and, depending on the results, replacing 

and inspecting certain tail boom 

attachment point hardware and 

repeating the torque inspections, or 

applying torque stripes. Lastly, the FAA 

proposed to prohibit installing steel 

alloy barrel nuts on any helicopter. The 


khammond on DSKJM1Z7X2PROD with RULES