![]() In addition to sending the debt collection letters, Phoenix also furnished debt information to consumer reporting companies. Phoenix’s sending of unlawful debt collection letters risked harming consumers by pressuring or inducing them to pay debts they did not owe. Debt collectors are required to have a reasonable basis for asserting that a consumer owes a purported debt if a dispute is submitted. The CFPB’s investigation found that Phoenix sent collection letters to consumers who had disputed the validity or accuracy of their purported debts, even though Phoenix had not obtained substantiation for the debts. When inaccurate or false information is furnished to consumer reporting companies, it can be a form of coercing patients and their families into paying medical bills and debts they do not owe. One of the findings from the CFPB’s research is that many consumers report that the medical tradelines on their credit reports are not accurate. Medical debt affects people’s ability to access affordable credit, find quality housing, or even obtain a job. In a report published last year, the CFPB found that 43 million consumers had medical bills on their credit reports and that, all together, American families owed around $88 billion in medical bills. Between January 2017 and December 2020, Phoenix received approximately 54.4 million accounts with allegedly outstanding and owed debts from its clients for collection. Phoenix collects primarily past-due medical debts, and furnishes information about consumers to consumer reporting companies. Phoenix is a third-party debt collector with its principal place of business in Indianapolis, Indiana. “Given widespread inaccuracies in medical billing and credit reporting, the CFPB will be working to ensure that patients are not coerced into paying debts that they do not owe.” “With medical debt looming over so many American families, we are taking action against companies seeking to illegally profit off patients,” said CFPB Director Rohit Chopra. Today’s order requires Phoenix to pay redress to affected consumers, and pay a $1.675 million penalty to the CFPB’s victims relief fund. In at least thousands of cases, Phoenix continued to attempt to collect on a debt that was not substantiated after a consumer disputed the validity of the debt. – The Consumer Financial Protection Bureau (CFPB) took action against medical debt collector Phoenix Financial Services (Phoenix) for numerous debt collection and credit reporting violations.
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