Legislation Would Give Consumers 120 Days To Resolve Medical Debts Before Dinging Credit Reports
Tuesday, May 28, 2013 - 7:12 PM
Consider the following: 1-in-10 insurance claims are processed incorrectly; debt collectors are using account information that may be incomplete, inaccurate and out-of-date; once reported to a credit bureau, medical debt — whether real or erroneous — can do severe damage to your credit score. Perhaps it couldn’t hurt to give consumers a chance to challenge or resolve medical debts before collectors report them to the credit bureaus?
That’s the thinking behind the Accuracy in Reporting Medical Debt Act, introduced last week by Congressman Gary Miller of California and Carolyn McCarthy of New York.
The bill, which would amend the Fair Debt Collection Practices Act, would give consumers 120 days to resolve medical debt with collectors before that debt is reported to Equifax, Experian or Transunion. It would require debt collectors to delay reporting the debt to the bureaus if the supposed consumer can show that she is continuing to work with an insurance company; was unaware that the debt existed or disputes owing the debt; or has applied for financial assistance.