Report from Thordsen Law Offices
NEW YORK SETTLEMENT WITH THREE MAJOR CREDIT BUREAUS FOR CORRECTION OF CREDIT REPORTS REGARDING MEDICAL DEBT COLLECTIONS AND HOW THE DEBTS ARE TO BE REPORTED
Unpaid medical costs, comprises more than half of all collection items (sent by debt collection companies to the credit bureaus) on credit reports(p.7). Medical debt collection items on credit reports may not be accurate reflections of consumers’ creditworthiness.
Collection Furnishers (collection agencies and debt buyers) will have to furnish the name of the Original Creditor and the Creditor Classification Code associated with each account or item reported.
The Credit Reporting Agencies (CRAs) shall take corrective action against Collection Furnishers identified including, but not limited to, working with a Collection Furnisher to remediate the problem, suppressing certain of the Collection Furnisher’s data, and refusing to accept certain information from the Collection Furnisher.
The CRAs shall prohibit Collection Furnishers from reporting debt that did not arise from any contract or agreement to pay (including, but not limited to, certain fines, tickets, and other assessments).
The CRAs shall implement a process designed to remove from the CRAs’ respective credit reporting databases any existing data reported by Collection Furnishers relating to the collection of debt that did not arise from a contract or agreement to pay.
The CRA’a shall require Collection Furnishers to regularly reconcile data relating to accounts in collection that have not been paid in full. This regular reconciliation will be accomplished, in part, by periodic removal or suppression of all collection accounts that have not been updated by the Collection Furnisher within the last six months
Collection Furnishers shall accurately report and delete accounts that are sold, transferred, or no longer managed by the reporting entity.
CRAs shall prevent the reporting and display of medical debt identified and furnished by Collection Furnishers when the date of the first delinquency is less than one hundred and eighty (180) days prior to the date that the account is reported to the CRAs.
Collection Furnishers shall use special comment codes of “BP” for debt identified as “paid by insurance” and “AB” for debt identified as “being paid by insurance.”
Collection Furnishers to remove or suppress medical accounts reported as “paid by insurance” or “being paid by insurance” if such accounts were in fact paid in full by the consumer’s insurance carrier and were not the obligation of the consumer.
CRA’s to remove or suppress known medical collections furnished by Collection Furnishers from files within the CRAs’ respective credit reporting databases when such debt is reported either as having been paid in full by insurance or as being paid by insurance.
This should all be completed in 3 years and 9 months. However, nothing prevents consumers from arguing the medical bills now submitted by debt collectors and using the settlement as authority to remove collection items from their credit reports…
What does this mean? The CRA’s have about 6 months to put all corrections in place. Consumers with medical debts in collection can argue to have them taken off and cite the Attorney General of New York opinion for the authority if it fits in the guidelines. To review the entire 41 page agreement
between the State of New York and the credit bureaus, go to: http://www.ag.ny.gov/pdfs/CRA%20Agreement%20Fully%20Executed%203.8.15.pdf
IF YOU HAVE QUESTIONS ABOUT MEDICAL DEBTS THEN CALL ME AT 888-667-8529.
THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. THE AUTHOR MAKES NO CLAIMS ABOUT ITS ACCURACY, COMPLETENESS, OR UP-TO-DATE CHARACTER. NO AUTHOR OR OWNER OF THIS DOCUMENT AND ITS WEBSITE IS ACTING AS YOUR ATTORNEY. LEGAL RULES AND TAX RULES CHANGE FREQUENTLY, THEREFORE, WE CANNOT GUARANTEE THAT ANY INFORMATION CONTAINED HEREIN OR ON A WEBSITE IS ACCURATE OR UP TO DATE. FOR LEGAL ADVICE PLEASE CONSULT AN ATTORNEY.