Consumer group highlights benefit of move by major credit bureaus
On the heels of an announcement by the three major credit bureaus that they will be removing up to 70% of medical debt from consumer credit reports by this summer, consumer advocacy group Consumer Federation of America (CFA) applauded the move as good news for consumers.
“This is a great step forward for America's consumers, and we strongly support the efforts of the Consumer Financial Protection Bureau in pushing credit reporting agencies to reevaluate their use of medical debt on consumer credit reports,” said Rachel Gittleman, Financial Services Outreach Manager at Consumer Federation of America. “However, many consumers will still have medical debts on their credit reports, which can negatively impact their ability to secure housing, loans, or even jobs. Black, Hispanic, and low-income consumers are more likely to have medical debt and more likely to be under- or uninsured. Consumers should not face lasting repercussions from getting sick.”
The support from CFA echoes claims made by the National Consumer Law Center (NCLC) that medical debt can have devastating impacts on consumers.
Although 1 in 3 consumers have past due medical bills, according to the National Consumer Law Center, the debt burden is disproportionately carried by Black and Hispanic people, young adults and low-income consumers. Medical debt has lasting repercussions for consumers — and is a leading cause of bankruptcy, with 62% of bankruptcies related to medical debt.
“Medical debt is frequently overwhelming and confusing, and consumers face an uphill battle trying to remove inaccurate information from their credit reports,” said Erin Witte, Director of Consumer Protection at Consumer Federation of America. “Particularly while the COVID-19 pandemic is ongoing and medical debt is surging, consumers will benefit from having these medical debts removed from their credit reports so that they can meaningfully participate in the economy.”
Comments / 10