Medical Debt Collectors Have Gone Rogue. Here’s How to Protect Yourself

Medical bill collectors
Nathen and Melissa Cobb of Riverton, Ill., tried to refinance their home a few years ago and didn't qualify for the loan because of medical bills that had been sent to a collection agency. They were surprised because the bills had been paid. AP Photo/Seth Perlman

Your phone rings. A debt collector is on the line, pestering you to pay your medical bills. If you don’t, they’re going to sue you and ruin your credit rating.

And the crazy thing is, you don’t actually owe any money.

If this has ever happened to you, you’re far from alone. A new report says debt collectors are harassing a surprising number of Americans to pay off medical debt they don’t even owe.

“Medical debt collection is a system run amok,” said the report’s co-author, Gideon Weissman of the nonprofit Frontier Group.

Frontier and the U.S. Public Interest Research Group looked through 17,700 medical debt collection complaints that the Consumer Financial Protection Bureau received over the past three years.

What they found was amazing:

  • Sixty-three percent of these complaints came from people who didn’t even owe the debt the collectors were pestering them about.

  • They either didn’t owe the debt in the first place, had already paid the debt or had it discharged in bankruptcy.
  • Many complained of debt collectors’ aggressive tactics such as frequent, or repeated calls, calls harassing friends and family, threats of legal action or the use of abusive language.
  • Thirty-five percent of complaints made reference to the consumers’ credit reports.

So, if you’re getting these aggravating calls from debt collectors even though you don’t owe any medical debt, you’re not crazy, and you’re not alone.

“Medical debt collectors often employ aggressive tactics and attempt to collect debt from the wrong customers — putting consumers’ credit records at risk,” the report’s authors said. “Medical debt accounts for more than half of all collection items that appear on consumer credit reports.”

These entries on credit reports, they said, “are often wrong or are about the wrong consumer.”

What to Do About This?

What can you do to protect yourself? Here are our tips on dealing with debt collectors.

Some of the highlights:

  • Know your rights.
  • Watch out for debt-collection scams.
  • Addressing debt earlier is better.

Your Turn: Have you ever been wrongly harassed by a bill collector?

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. Unfortunately, bill collectors pester him about medical debt that he actually owes.