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Changes to Consumer Credit Reporting

Settlement agreements between the three main consumer reporting agencies (TransUnion, Equifax, and Experian) and more than 30 state attorney generals from across the US have led to a series of reforms in credit reporting operations. These reforms are being implemented nationwide, and may have already impacted you as either a consumer or as a creditor, though deadlines for compliance are staggered across the next three years.

Fines and Tickets

Debt collectors are no longer able to report consumer debts that didn’t arise from a contract or agreement to pay. This applies especially to debts like parking or speeding tickets or other fines which were not agreed to by the consumer. Credit reporting agencies must also remove these records from existing reports.

Periodic Updates

Consumer reporting agencies will now be responsible for removing or suppressing any collections account on a consumer’s report which hasn’t been updated in the last six months. This in turn means that reporting agencies will soon require regular updates from debt collectors when it comes to accounts in repayment that haven’t been paid in full. New trainings for debt collectors on how to report and delete these accounts may already be happening in your state; if not, they should be soon.

Reporting Medical Accounts

Medical accounts which are currently in the process of being paid by insurance companies can no longer be reported to consumer agencies. Debts paid in full by insurance companies must be removed from the consumer’s credit report even if they were delinquent when the insurance companies finally paid. Further, even if the debt is not paid by insurance, debt collectors must wait 180 days after the first date of delinquency to report those debts to consumer agencies.

Apart from these new changes, the Fair Credit Reporting Act and any applicable state laws still apply. These revisions offer collections departments or agencies a valuable opportunity to review their practices and ensure full compliance. If you outsource your payment cycle management to a provider like HCM, double check to be sure they’re aware of and following these new directives.


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