Consumer complaint received 2020-11-27
Product: Debt collection — Medical debt
Issue: Written notification about debt — Didn't receive enough information to verify debt
Company: Asset Management Outsourcing, Inc. (NJ)

CREDIT AGENCIES AGREE TO WAIT BEFORE ADDING MEDICAL DEBT TO RATINGS XXXX XXXX XXXX NATIONWIDE RECOVERY SERVICES I demand a full accounting of services offered or performed by your client XXXX XXXX XXXX to validate this debt. I was never invoiced or given an 180-day notice to resolve to invoice will be placed with a debt collector as mandated by CFPB and all pertinent credit bureaus XX/XX/2015. 
At this time I make the claim that the medical debt procured against me on any or all credit reporting agencies, should be deleted permanently. 
Too many consumers have learned the hard way that their credit rating can be tarnished by medical bills they may not owe or when disputes delay insurer payment. That should change under new policy agreed to this week by the three major credit reporting agencies.

The agencies say they will establish a 180-day waiting period before medical debt is added to someones credit report. In addition, the agencies agreed that when an insurer pays a bill, the debt will be promptly removed from the consumers credit report, unlike certain debts that remain for years. 
The changes are part of a settlement between the credit rating agencies XXXX, XXXX and XXXX and the XXXX XXXX Attorney Generals office that aims to improve accuracy and enhance procedures for disputing credit report errors. The agreement covers consumers across the country.

The three agencies gather information from banks and collection agencies about consumers credit such as payment history and how much someone owes to credit score for more than 200 million individuals throughout the country. A persons credit score is used as a measure of credit worthiness, and can influence peoples ability to get loans and the interest rates they are charged, among other things. 
This is going to help millions of people access more affordable loans, says XXXX XXXX, a principal at XXXX XXXX XXXX in XXXX XXXX, Mass. People will no longer be penalized for having a medical bill slip past them and get on their credit report even though the bill gets paid. 
Insurers sometimes wrangle with patients and providers for months before paying a bill. The new six-month waiting period will give consumers time to resolve such disputes, XXXX noted. 
Medical debt accounts for more that half of the collection items on credit reports, according to a report by the Consumer Financial Protection Bureau. Among people facing collection for only medical debt, about half have otherwise clean credit reports with no sign of past debt collection problems. 
Company Mishandled Consumer Credit Reporting Disputes, Prevented Consumers From Exercising Debt Collection Rights WASHINGTON, D.C. Today, the Consumer Financial Protection Bureau ( CFPB ) announced an enforcement action against a medical debt collection company for mishandling consumer credit reporting disputes and preventing consumers from exercising important debt collection rights. These practices potentially affected the credit scores of thousands of individuals and caused consumers distress and confusion. The CFPB is ordering the company to provide over {$5.00} XXXX in relief to harmed consumers, correct its business practices, and pay a {$500000.00} penalty. 
XXXX XXXX XXXX mistreated consumers and prevented them from exercising critical debt collection rights, said CFPB Director XXXX XXXX. These violations are particularly egregious given the challenges many consumers already face who are attempting to navigate the medical debt maze. Today we are putting a stop to these illegal practices and getting consumers the relief they deserve. 
XXXX XXXX XXXX, XXXX, which does business as XXXX XXXX XXXX, is a debt collection agency that primarily collects medical debt on behalf of hospitals, doctors, and other healthcare providers. The company is an indirect subsidiary of XXXX XXXX XXXX, XXXX, which provides billing and other services to more than 600 hospitals nationwide. XXXX XXXX XXXX, a publicly traded XXXX services company based in XXXX, Texas, is the parent company of XXXX XXXX XXXX. 
Companies that collect medical debt and supply this information to credit reporting agencies have a significant impact on consumers credit scores. More than XXXX XXXX Americans have medical debt adversely affecting their credit reports, and more than half of all overdue debt on consumer credit reports is from medical debt. A recent CFPB report found that the complex processes by which medical bills are incurred, collected by a wide range of debt collectors, and reported to credit reporting agencies can create unique challenges for consumers. The Bureau also found that medical debt can overly penalize consumer credit scores. 
As part of its debt collection business, XXXX XXXX XXXX regularly supplies information on the status of its medical debt collection accounts to credit reporting agencies and is considered a furnisher under the Fair Credit Reporting Act. Credit reporting agencies track a consumers credit history and other consumer transactions based on information supplied by furnishers. The reports that credit reporting agencies sell are used in determining everything from consumer eligibility for credit to employment decisions. 
XXXX XXXX XXXX typically initiates collection efforts through letters and telephone calls to consumers. Within five days of their initial communication, debt collectors are generally required to send debt validation notices to alert consumers about their right to request proof that a debt is valid or dispute the debt. A CFPB investigation, however, uncovered that XXXX XXXX XXXX failed to send debt validation notices to thousands of consumers. 
The CFPB also found that the company mishandled consumer credit reporting disputes by failing to investigate and respond to consumers within the 30-day timeframe required under the law. Because the company furnishes information related to past-due medical debt, the information consumers seek to dispute or validate has the potential to lower credit scores. 
The CFPB order charges the company with violating the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. The violations specifically include : Mishandling consumer credit reporting disputes : XXXX XXXX XXXX failed to respond to more than 13,000 consumer credit report disputes within the 30-day timeframe required by law. On average, the company took more than 90 days to respond to consumers disputes and, in some cases, took over a year. Consumers spent time and money attempting to follow up on unresolved disputes and experienced distress and confusion due to the delays. The CFPB found that the company had no policies or procedures in place to investigate these consumer credit report disputes. Instead, the company treated consumer credit report disputes in the same way as other consumer complaints and had no deadline for responding. 
Preventing consumers from exercising important debt collection rights : XXXX XXXX XXXX failed to send debt validation notices to more than 10,000 consumers. During this time, the company continued to collect over {$2.00} XXXX from consumers who did not receive the notices. Failing to provide notices denies consumers the opportunity to assess whether the debt is valid and whether the amount or source is correct. These notices can be an especially important consumer safeguard with regard to medical debt, where issues like insurance reimbursements and medical billing processes are commonly fraught with complexity, confusion, and delay, and can lead to consumers being unsure of how much to pay or even whom to pay. 
Together, these violations had the potential to harm thousands of consumers and in some cases, negatively impact their credit scores. This can hinder consumers ability to obtain credit or increase the rates they may pay for credit. In some cases, the company reported inaccurate information to the credit reporting agencies and then failed to provide a timely response to consumer disputes about the errors. Some consumers may also have been able to avoid negative information on their credit reports if they had known about their right to assess and dispute the debt in question. 
Enforcement Action To address these violations, the CFPB order requires XXXX XXXX XXXX to take the following actions : Provide over {$5.00} XXXX in relief to harmed consumers : XXXX XXXX XXXX must identify all affected consumers and provide monetary relief. Consumers who were never sent a debt validation notice and who made payments to the company will receive a full refund and have remaining account balances forgiven. The company will pay {$100.00} to consumers who were never sent a debt validation notice and did not make any payments to the company. The company must also pay damages ranging from $ XXXX {$1000.00} to each consumer who did not receive a timely response to his or her credit report dispute. The amount that each consumer receives will correspond to the duration of the companys delay in responding to the consumers credit report dispute. The company must submit a written plan to the CFPB for approval detailing how the company will identify affected consumers and provide relief. 
Correct errors on credit reports : XXXX XXXX XXXX must identify all consumer accounts affected by its illegal business practices and fix any inaccuracies. The company must also update the account information it has furnished to the credit reporting companies and notify all affected consumers of this update, to the extent it has not already done so. 
End illegal credit reporting and debt collection practices : The company must cease its illegal business practices and develop new policies to comply with federal consumer credit reporting and debt collection laws. 
Establish consumer safeguards : XXXX XXXX XXXX must change how it does business and establish safeguards to ensure it has the staffing, facilities, systems, and information necessary to timely and completely respond to consumer credit report disputes. It must also establish a strong oversight program to identify any systemic inaccuracies to ensure that it informs consumers of their right to validate and dispute inaccurate debts in collection. 
Pay a civil monetary penalty of {$500000.00} : XXXX XXXX XXXX will pay a {$500000.00} fine for the illegal actions. 
The CFPB will continue to enforce federal laws to ensure accuracy in credit reporting and debt collection. Consumers should check their credit report for inaccuracies at least once a year. Consumers can order a free credit report once every 12 months from XXXX. 
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