On December 15, 2023, the CFPB took action against a medical debt collector, Commonwealth Financial Systems, for illegally trying to collect unverified medical debts after consumers disputed the validity of the debts. With its headquarter in Dickson City, Commonwealth Financial Systems is a nonbank corporation engaged in third-party debt collection where it specializes in the collection of past-due medical debts and furnishes information about consumer collection accounts to consumer reporting companies.
According to the CFPB, Commonwealth violated the Fair Credit Reporting Act because it failed to conduct reasonable investigations of disputed debts. In addition, the company failed to inform consumer reporting companies that certain information was being disputed. The company also violated the Fair Debt Collection Practices Act because it continued to attempt to collect disputed debts without substantiating documentation.
The CFPB ordered Commonwealth to:
Shut down permanently;
Request all consumer reporting companies to whom it previously furnished information about any consumer to delete all collection accounts for such consumers; and
Pay a $95,000 fine.
Read the CFPB’s press release here.
The consent order can be found here.