The Why: Phoenix Financial Services attempted to collect on debts that were disputed by consumers and using unlawful letters and misrepresentations to attain these collections.
The CFPB took action against Phoenix Financial for numerous debt collection and credit reporting violations. In over a thousand cases, this collection company continued to collect on a debt that was not investigated or substantiated after a consumer disputed the validity of the debt. A collection company is required by law to investigate disputes obtained by consumers. It was found that no “reasonable” investigations as to the validity of these debts were attempted and the company still sent out letters to collect. As a result, many inaccuracies would remain in consumers credit reports. This was considered a direct violation of the FCRA Regulation V. Phoenix is now required to pay redress to the affected consumers and pay the CFPB a $1.67 million penalty to their victim’s relief fund.
CFPB Director, Rhohit Chopra, stated; “With medical debt looming over so many American families, we are taking action against companies seeking to illegally profit off patients. 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.”
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. Medical debt affects people’s ability to access affordable credit, find quality housing, or even obtain a job. 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. 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.” See the published article from the CFPB
These violations are all too common a practice. This is why it is important for consumers to be vigilant and keep a close eye on their credit reports for inaccuracies. If you don’t have a credit monitoring service, there is no better time than now to obtain one. If you feel that you have inaccuracies on your credit report and you feel your disputes are going nowhere, please reach out to Credit Law Center. We are trained to look for these violations and our Attorney’s fight for consumer rights on a daily basis. If you are thinking of credit repair, go with a company that can get results via the Law. We sue debt collectors!!!
