What Debt Collection Agencies Can and Can’t Do Regarding Medical Bills
Debt collection agencies play a significant role in managing medical bills, but their actions are governed by strict regulations to protect consumers from unfair practices. Understanding what these agencies can and cannot do is crucial for navigating the complex process of medical debt collection.
What Debt Collection Agencies Can Do
- Contact Consumers:
- They can reach out to patients via phone, mail, or email to discuss outstanding debts.
- Negotiate Payment Plans:
- Collectors may offer payment plans that allow consumers to settle debts over time.
- Report Debts (Under Certain Conditions):
- While recent regulations limit the inclusion of medical bills on credit reports (e.g., CFPB rule banning certain medical debt), collectors can still report unpaid debts if they meet specific criteria.
- Pursue Legal Action Within Statute of Limitations:
- Collectors have a limited timeframe (varies by state) during which they can sue consumers for unpaid debts.
Read: What rights do you have when dealing with medical debt collectors?
What Debt Collection Agencies Cannot Do
- Engage in Deceptive Practices:
- The Fair Debt Collection Practices Act (FDCPA) prohibits using false or misleading information when collecting debts.
- Harass Consumers:
- Collectors are not allowed to contact consumers at unreasonable times or places without consent.
- Collect Inaccurate Debts:
- The CFPB has clarified that collecting unsubstantiated or legally invalid medical bills is prohibited.
- Exceed Legal Limits on Billing:
- Collectors must adhere to federal and state laws regarding billing amounts; exceeding these limits is illegal.
- Misrepresent Consumer Rights:
They cannot mislead patients about their rights regarding contesting bills or seeking financial assistance programs available through healthcare providers.
Debt collection agencies must operate within strict legal boundaries when handling medical bills—ensuring transparency, fairness, and respect for consumer rights throughout the process—while also adhering to evolving regulatory guidelines aimed at protecting individuals from abusive practices!
Read: How does medical debt impact your credit score?
