Proposed Amendments to FCRA for Reporting Medical Debt

A bill introduced to Congress this past week would allowPast _due _img consumers who are
behind on their
medical bills
up to 120 days to work out a payment plan with debt
prior to the debt being reported on their credit
file.  This proposed amendment before Congress, called the
Accuracy in Reporting Medical Debt Act, would allow debtors a grace
period within which the debtor could prove the debt was inaccurate,
work with the medical provider or insurance company to resolve the
account or apply for financial assistance to pay off the

If the debtor were to meet the requirements of the Act, the debt
collector would be barred solely from reporting the debt to the
three major credit reporting agencies
, Equifax, Experian and
Trans Union for 120 days, no exception, but it may continue its
collection efforts.  In a previous post I discussed the Medical
Debt Relief Act
, a similar amendment before Congress where
medical debt must be removed from a consumer’s credit report no
more than 45 days after repayment.  Other debts
remain on your credit file
even after repayment for up to 7
years.  This new amendment is aimed at targeting debt
collectors under the FDCPA in addition to the protecting
your credit report
.  The idea behind these proposed
amendments is to alleviate some of the stress consumers suffer
associated with unforeseen health issues and the mass of debt
ailing health often creates. 

The motivation behind this amendment is that proponents say 1 in
10 insurance claims are processed inaccurately and collectors of
medical debts use this to their advantage.  Most consumers are
not aware of their rights under the Fair
Debt Collection Practices Act
(“FDCPA”) and may be coerced into
making payment on a debt that they don’t actually owe.  The
FDCPA, allows a debtor 30 days to
dispute a debt
but does not require a delay in reporting the
debt on the debtor’s credit file.  It simply requires the
account to be marked as “disputed” while the collector
investigates.  Under the new amendment, debtors would have
this 120
day grace period
to figure out the legitimacy of the debt or
work out a payment plan without the stress of a debt collector
reporting the debt and destroying your credit, inevitably making it
harder to obtain financial

If passed, the Accuracy in Reporting Medical Debt Act would work
in conjunction with the Medical
Debt Relief Act
allowing consumers a more opportunity to figure
out their finances and avoid the long-term damage of ailing and
unforeseen health issues.  If you are having problems with
surmounting debt and are being contacted by debt collectors contact
SmithMarco P.C. for a free case