The New Mexico Public Interest Research Group recently released a report exploring consumer complaints on medical debt, concluding that debt collectors have work to do when it comes to accuracy and illegitimately affecting credit scores.

The ninth in a series of reports that reviews complaints to the Consumer Financial Protection Bureau found that nearly two-thirds of complaints about medical debt collection asserted that the debt was never owed, was unverified, or was already paid or discharged.

The report was released in an effort to demonstrate the importance of the CFPB and raise awareness about the government agency’s work, as well as encourage policymakers to eliminate aggressive debt collection practices, according to Andrew Balis, NMpirg’s campaign organizer.



“What we found is medical debt items on a person’s credit report are usually wrong or they’re about the wrong person, and yet medical debt is usually the first item on a credit report and they still play a major role in,” he said.

The report, created by the Frontier Group, used qualitative research. They searched the consumer complaint database open to the public for complaints related to medical debt collection practices and categorized how the debt was accrued, what consumers said about it and whether debt collectors had used inappropriate tactics in collecting it.

Balis said NMpirg has several recommendations for state and federal policy makers, including stopping aggressive debt collection practices and protecting the CFPB.

“It’s a largely overlooked practice that has a huge effect on people’s credit. It’s not like something like overdraft fees that’s directly affecting people’s solvency, but it is affecting their credit scores and that’s not a small thing,” Balis said.

He said the CFPB has returned $11 billion to consumers.

“The CFPB is working and it’s worth defending from these specific avenues of attack in this Congress,” Balis said. “These include threats to unilaterally fire the CFPB director. They also include legislation that’s in the House that would transform it into a so-called independent commission of five members that would open it up to gridlock.”

The constitutionality of the single director structure of the agency is currently being debated in court, Balis said. Currently, the CFPB director is appointed by the president, with the agency receiving funding from the federal reserve rather than Congress.

One legislator who would like to see change is New Mexico Congressman Steve Pearce, Balis said.

According to a press release, on April 5th Pearce questioned CFPB Director Cordray during his semi-annual appearance before the House Committee on Financial Services about the CFPB’s stances on payday loans and its definition of rural.

Pearce was concerned that the CFPB doesn’t break down complaints by rural county or take complaints about community banks, and said that access to payday loans is important to rural communities..

He also questioned why the CFPB maintains a database of consumer complaints about debt collections, but doesn’t track complaints about it’s own agency.

“I hear quite frequently when I go to a district that CFPB’s intrusive. They’re limiting our access,” Pearce said in the committee meeting.

Cordray responded that the CFPB successfully worked with Congress to change their definition of rural and that the agency is familiar with New Mexico’s issues, as one of its two call centers is located in-state.

Balis said that, while the report is designed to inform policy makers, it’s also important to build community awareness of medical debt collection issues and the existence of the CFPB.

“Students get sick and we all are subject for our healthcare system,” he said. “For students, things like student loan debt is more important and the CFPB does do work with that, but the U.S. has one of the most expensive health care systems in the world. You can still face insolvency even if you have insurance.”

Balis is correct that not all UNM students are familiar with the agency, as student Alexandria Bernard said she’d never heard of it.

“Now that I am learning about it, I think it’s very useful because everyone’s basically starting off on their own,” she said. “People take advantage of college students because they don’t know a lot of things. I think the earlier you know about it the better.”

UNM student Austin Tyra was also unfamiliar with the agency, but felt it could be useful to students.

“I would think it’s not only useful, but necessary,” he said. “A lot of people, including myself will never be very well versed in banking and lending. Having somebody who’s at least keeping in mind the consumer’s best interest is a good thing to have for sure.”

Cathy Cook is a news reporter at the Daily Lobo. She can be reached at news@dailylobo.com or on Twitter @Cathy_Daily.