Medical debt collection agency Commonwealth Financial Systems shut down by federal regulators

 The Consumer Financial Protection Bureau said Friday it has ordered medical debt collector Commonwealth Financial Systems of Dickson City, Pa., to cease operations and pay a $95,000 penalty for "illegally trying to collect unverified medical debts." Commonwealth is banned from participating in or assisting others in any debt collection activities, debt buying, debt selling, and consumer reporting activities, the CFPB said. The move came after consumers disputed the validity of the debts, the CFPB said. Commonwealth Financial Systems violated the Fair Credit Reporting Act by failing to conduct "reasonable" investigations of debts that had been disputed. The company also attempted to collect disputed debts without substantiating documentation, according to the CFPB. Tens of millions of Americans are targeted by collection agencies for medical bills while "reporting of medical bills is plagued by inaccuracies," the CFPB said. The agency is in the midst of a rule-making effort to remove medical debt from credit reports.

https://www.morningstar.com/news/marketwatch/20231215419/medical-debt-collection-agency-commonwealth-financial-systems-shut-down-by-federal-regulators