Alabama Congressman Joins Debt Collectors in Support of Deceptive and Unfair Collection of Medical Debt

November 19, 2024 — Press Release

Rep. Palmer’s Resolution to Overturn the CFPB’s October Advisory Opinion Comes on the Heels of a Legal Challenge Brought by ACA International

WASHINGTON – More than 100 million people struggle under the weight of medical debt, with many facing unfair and deceptive debt collection tactics. The Consumer Financial Protection Bureau (CFPB) issued an advisory opinion last month to address these harmful practices, drawing the ire of the debt collection industry and its allies in Congress. 

Earlier this month, debt collection industry trade group ACA International filed a lawsuit challenging the CFPB’s advisory, and it recently filed a request for a temporary restraining order seeking to prevent the advisory opinion from taking effect. Amid the legal challenges, Representative Gary Palmer (R-AL-6) filed a resolution under the Congressional Review Act (CRA) last week seeking to reverse the advisory opinion.

“The advisory opinion clarifies that certain medical debt collection practices are unlawful,” said NCLC Senior Attorney April Kuehnhoff. “The advisory opinion includes prohibitions on collecting amounts that are not owed, clarifies that debt collectors must have a reasonable basis for asserting that a medical debt is owed, and directs courts to look at the contract between patients and medical providers to determine when debts are in default.”

“These are entirely reasonable and common sense provisions,” said NCLC Senior Attorney Chi Chi Wu. “Debt collectors are telling us they don’t want to follow basic protections like ‘get the amount of the debt right before you try to collect it.’ Healthcare is one of the most frequent debts companies collect and it’s especially important to make sure debt collectors respect the rights of consumers, who may be vulnerable as they or their families battle serious health conditions in addition to the burden of medical debt. Members of Congress should support the CFPB’s efforts to protect consumers with medical debts in collection, not nullify those protections.”

Medical debt is a growing problem for Americans and the burden of medical debt falls even more heavily on Black and Hispanic patients. People living in the South and in non-Medicaid expansion states, including Alabama, are also more likely to have medical debt. 

Related Resources

• Nursing Home Debt Collection Practices Put Residents’ Family and Friends At Risk, Oct. 30, 2024
• White House Efforts Will Reduce Medical Debt, Protect Consumers from Harmful Debt Collection, Oct. 1, 2024
• Medical Debt Behind Bars: The Punishing Impact of Copays, Fees, and Other Carceral Medical Debt, Sept. 6, 2024
• Don’t Add Further Insult to Injury: Medical Debt & Credit Reports, Jan. 6, 2023