CFPB report finds 15 million Americans with medical debt on their credit reports

Federal Issues CFPB Medical Debt FDCPA Credit Report

On April 29, the CFPB released a report entitled “Recent Changes in Medical Collections on Consumer Credit Records” that showed that as of June 2023 some 15 million Americans (approximately five percent) still have medical bills on their credit reports. However, credit rating agencies’ changes have resulted in a decrease of approximately nine percentage points in the number of Americans that have medical debt on their credit report. Further, the report indicated that the CFPB’s efforts to combat medical debt collection issues (including, and as previously covered by InfoBytes, holding a hearing in July 2023 on medical billing and collections, highlighting the issue in their 2023 FDCPA report, and having its general counsel discuss the issue in April 2024) resulted in a greater expected decline in those with medical billing on their credit report. The CFPB attributed the difference between the forecasted decrease and the actual decrease to two factors: first, that the CFPB’s first report did not include the original date of delinquency; and second, there has been a trend towards reporting fewer medical collections, independent of collection reporting changes.

This year’s report showed that some states saw much larger reductions than others, but indicated a 38 percent nationwide drop in the total balances of medical collections on credit reports, continuing the trend shown in last year’s report that found a 37 percent decline in medical collection tradelines on credit reports (covered by InfoBytes here). Of the 15 million Americans that continue to have medical bills on their credit reports, this year’s report also showed the average reported balance increased from $2,000 to over $3,100, most medical collections tradelines that were removed were below $500, and those living in lower-income communities in the South have the most medical bills in collections for the largest amounts. The CFPB stated that fixing the credit reporting market, including issues that involve the reporting of medical bills, will continue to be a priority.