Section 1 Short title
This Act may be cited as the “Accuracy in Reporting Medical Debt Act of 2013”.
Accuracy in Reporting Medical Debt Act of 2013
A BILL
To amend the Fair Debt Collection Practices Act to provide for a timetable for verification of medical debt and to increase the efficiency of credit markets with more perfect information.
Sec. 2 Findings
The Congress finds the following:
A reduction in a consumer’s credit score can impede consumers’ economic activity and consumer borrowing capacity.
A 2012 Federal Trade Commission report found that as many as 40 million Americans have mistakes on their credit report.
According to credit evaluators, medical debt collections are inconsistently reported, and of questionable value in predicting future payment performance.
Medical debt that has been completely paid off or settled will remain on a consumer’s credit report and can significantly damage a consumer’s credit score for 7 years.
Creditworthy consumers may be denied credit, pay higher interest rates, or pay higher fees when buying or refinancing a home loan or obtaining credit for credit-related products due to disputed medical debt on their credit reports.
Sec. 3 Validation of medical debt
In general— Section 809 of the Fair Debt Collection Practices Act (15 U.S.C. 1692g) is amended by adding at the end the following:
“(f) Validation of medical debt—For purposes of medical debt, the following shall apply:
“(1) Definitions—For purposes of this subsection:
“(A) Consumer reporting agency—The term consumer reporting agency has the meaning given such term under section 603(f) of the Fair Credit Reporting Act.
“(B) Disputes the validity—With respect to a medical debt, a consumer disputes the validity of such debt if the consumer states, in writing, that either—
“(i) the consumer is continuing to communicate with an insurance company to determine coverage for the debt;
“(ii) the consumer disputes the amount or existence of the debt; or
“(iii) the consumer has applied for financial assistance, provides evidence of such application, and is awaiting a determination.
“(C) Medical debt—The term medical debt means a debt arising from the receipt of medical services, products, or devices.
“(2) Notice of specific deadline—When sending a statement described under subsection (a)(3), the debt collector shall include the following information:
“(A) That the debt collector could report to a consumer reporting agency regarding the debt, if the consumer does not respond to the notice within 30 days from the date on which the consumer received the statement.
“(B) That, if the consumer does respond, the debt collector could report to a consumer reporting agency regarding the debt at the end of the 120-day period beginning on the date that the debt collector sends the statement.
“(C) The specific date that is the end of the 120-day period beginning on the date that the debt collector sends the statement.
“(3) Effect of consumer notice—If the consumer notifies the debt collector, in writing, within the 30-day period described under subsection (a), that the consumer disputes the validity of the debt, the debt collector may not, during the 120-day period beginning on the date that the debt collector sends the written notice described under subsection (a), communicate with, or report any information to, any consumer reporting agency regarding such debt. This paragraph shall have no effect on when a debt collector may or may not engage in activities to collect or attempt to collect any debt owed or due or asserted to be owed.
“(4) Reporting after the 120-day period—Nothing in this subsection shall prohibit the debt collector from communicating with, or reporting any information to, any consumer reporting agency regarding such debt after the end of such 120-day period.”
Effective date— The amendment made by subsection (a) shall take effect after the end of the 6-month period beginning on the date of the enactment of this Act.