Here are your top FOX Business Flash headlines for March 18th.
Equifax, Experian and TransUnion have announced that they will collectively remove nearly 70% of medical debt collection lines from credit reports.
UNPAID MEDICAL BILLS HAVE 58% OF COLLECTION DEBT: CFPB REPORT
As of July 1, paid medical bills will no longer be included in consumer credit reports. In addition, the time period before unpaid medical bills appear on a consumer’s report will be extended from 6 months to one year, giving consumers more time to settle their debt to insurance and medical providers before it is reported. reported.
In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical bills under $500.
| Ticker | Security | past | Change | Change % |
|---|---|---|---|---|
| EPC | Equifax Inc. | 241.12 | +1.75 | +0.73% |
| EXPN | No | No | No | No |
| TRU | RECONNECT | 103.13 | -1.00 | -0.96% |
Three credit reporting firms cover more than 1.6 billion credit accounts for more than 200 million adults each month.
“Medical bill arrears are often due to unforeseen medical circumstances. These changes are another step we are taking together to help people in the United States focus on their financial and personal well-being,” Equifax CEO Mark Begor, Experian CEO Brian Kassin and TransUnion CEO Chris. Cartwright said in a joint statement on Friday. “As an industry, we remain committed to providing fair and affordable access to credit for all consumers.”
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The Consumer Financial Protection Bureau estimated that as of June 2021, medical debt on 43 million credit reports was at least $88 billion.
“Total U.S. medical debt is likely higher because not all medical debt in collections goes to consumer reporting companies,” the CFPB noted in its February 2022 “Medical Debt in the United States” report.
Most consumer credit report medical debt collection lines are under $500, although many people with medical debt have multiple medical fees.
Delayed medical debt can lower a person’s credit score, which can reduce their access to credit and make it harder to find a home or job. (iStock)
Delayed medical debt can lower a person’s credit score, which can reduce their access to credit and make it harder to find a home or job. The CFPB emphasizes that medical debt collection is less predictive of future payment problems than other forms of debt collection.
Blacks and Hispanics, as well as young and low-income people of all races and ethnicities, are more likely to have higher levels of medical debt than the general population. Medical debt also heavily affects the elderly and veterans. Medical debt is more common in the southeast and southwest of the United States.
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The CFPB is committed to ensuring that the consumer credit reporting system is not used coercively against patients and their families to force them into paying dubious medical bills. A CFPB spokesperson told FOX Business that the agency “looks to take a close look at the details of the credit agencies’ plans.”
Equifax said in its 2021 annual report that the CFPB is currently investigating whether the company has complied with the Fair Credit Reporting Act’s requirements for proper resolution of consumer disputes. Sources told the Wall Street Journal, which first reported Friday’s announcement, that Experian and TransUnion are also under investigation over their consumer dispute settlements.
“Because the CFPB is our main regulator, we are constantly interacting with it on a range of issues,” a TransUnion spokesperson told FOX Business. Representatives for Experian did not immediately respond to FOX Business’s request for comment.
The latest step comes after Equifax, Experian, and TransUnion reached an agreement in 2015 with the New York State Attorney General to improve the accuracy of credit reports, improve the fairness and effectiveness of consumer dispute resolution procedures for credit report errors, and protect consumers from unfair harm. . to their credit history due to medical debt.
In recent years, credit reporting firms have agreed to write off debts that do not arise from a contract or agreement to pay from credit reports, such as library fees or fines, parking tickets, speeding tickets, and legal fees or fines. . In 2017, they also agreed to make changes to begin removing civil judgment and tax lien data from credit reports.
President Biden called Friday’s move “a step in the right direction,” adding that his administration “will continue to fight for consumers, from increasing transparency to preventing unexpected billing and more.”