On June 13, 2022, the CFPB released its annual report on the top financial concerns facing servicemembers, veterans, and military families, based on the complaints they submitted to the CFPB. Concerns reported by the servicemembers include billing inaccuracies and that debt collectors used aggressive tactics to recover allegedly unpaid medical bills. Servicemembers also reported failures by credit reporting companies in helping to resolve inaccuracies and other credit reporting issues.
Since 2011, servicemembers, veterans, and military families have submitted more than 250,000 consumer complaints to the CFPB. In 2021, they submitted more than 42,000 complaints where more than 60% of the complaints were about credit reporting and debt collection.
The following are the highlights of the 2021 Office of Servicemember Affairs Annual Report:
Servicemembers have concerns about faulty credit reporting. Credit or consumer reporting topped the type complaints with a total of 17,000 complaints. Issues with credit reporting, debt collection, or medical billing may result to servicemembers and military families can include loss of housing, separation from service, denial of security clearances, or loss of access to affordable healthcare.
Nationwide credit reporting companies fail to appropriately respond to servicemembers. Complaints indicated that investigations took too long and failed to correct errors on their credit reports.
Medical billing errors and inaccuracies are a driver of complaints about credit reporting and debt collection. More than half of medical debt collection complaints from servicemembers were about debts the individuals reported they did not owe. These were due to breakdowns in communication between private health care providers and TRICARE.
To address the said concerns, the CFPB recommends the following:
Medical providers and third-party billing companies should have adequate systems in place to serve servicemembers, veterans, and military families enrolled in TRICARE and the Veterans Choice Program.
Medical providers, as well as nationwide credit reporting companies, should consider emulating recent changes by the Department of Veterans Affairs, which includes requirements to exhaust all other collection efforts and review patients’ ability to repay before reporting a medical debt as unpaid.
Read the CFPB’ press release here.
The Office of Servicemember Affairs 2021 Annual Report can be found here.