CFPB Finds One-Third Decline in Collections Items on Consumer Credit Reports

Share This Post

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a report examining trends in credit reporting of debt in collections from 2018 to 2022. The report found the total number of collections tradelines on credit reports declined by 33%, from 261 million tradelines in 2018 to 175 million tradelines in 2022. The share of consumers with a collection tradeline on their credit report decreased by 20% in the same timeframe. The CFPB also released today additional analysis examining factors that increase the likelihood of inaccurate medical collections reporting and may contribute to the decline in medical collections tradelines.

“Our analysis of credit reports provides yet another indicator that, due to a strong labor market and emergency programs during the pandemic, household financial distress reduced over the last two years,” said CFPB Director Rohit Chopra. “However, false and inaccurate medical debt on credit reports continues to be a drag on household financial health.”

Collections tradelines are furnished to credit reporting companies by third-party debt collectors. Commonly reported collection items include medical, rental and leasing, credit card, and utility accounts. Some third-party collectors work on behalf of original creditors for a fee (“contingency-fee-based debt collectors”) and others purchase accounts outright from creditors (“debt buyers”).

Unlike most other tradelines, debt collection tradelines rarely report positive information like on-time payments, and result in reporting of collections tradelines being almost entirely harmful to consumers. Collections tradelines are visible to potential lenders, employers, landlords, and others who run credit inquiries or background checks. Collections tradelines can limit people’s access to jobs and housing, as well as decrease credit scores and increase the cost of credit. Given the potential damaging impacts of collections tradelines, reporting of inaccurate data is especially harmful.

Today’s report is drawn from the CFPB’s Consumer Credit Panel, a nationally representative sample of approximately 5 million de-identified credit records maintained by one of the three nationwide credit reporting companies. Key findings of this report include:

  • The decline in collections tradelines was driven by fewer reports by contingency-fee-based debt collectors, who primarily collect on medical bills. Contingency-fee-based debt collectors reported 38% fewer collections tradelines from Q1 2018 to Q1 2022, while the number of collections reported by the subset of debt buyers increased by 9% over the same period. The number of unique contingency-fee-based debt collectors also declined by 18% (from 815 to 672). Medical bills account for 68.9% of furnished collections by contingency-fee-based debt collectors.
  • Concerns about data integrity and the associated costs that would come with furnishing disputed information may explain some of the decrease in collections tradelines on credit reports. CFPB market monitoring indicates that contingency-fee-based debt collectors are moving away from furnishing collections information to credit reporting companies in part due to their concerns about data integrity and their ability to comply with the Fair Credit Reporting Act, including dispute processing. CFPB’s analysis on medical debt reporting describes the difficulty of assuring the accuracy of medical bills, including the lack of timely access to healthcare providers’ billing and payment information.
  • Medical collections tradelines still constitute a majority of all collections on consumer credit reports. Despite the decline in collections reporting, medical collections tradelines still represent 57% of all collections items on credit reports. Upcoming changes to medical collections reporting, as previously announced by the nationwide consumer reporting companies, will remove small dollar (less than $500) and paid medical collection tradelines from consumer credit reports. While this will reduce the total number of medical collections tradelines, an estimated half of all consumers with medical collections tradelines will still have them on their credit reports, with the larger collection amounts (representing a majority of the outstanding dollar amount of medical collections) remaining on credit reports.

Today’s report updates CFPB research published in 2019, which covered consumer credit records from 2004 to 2018. This report builds on prior work by the CFPB to analyze consumer credit reporting trends and to better understand the role of medical bills on credit reports.

Read today’s report, Market Snapshot: An Update on Third-Party Debt Collections Tradelines Reporting.

Read the accompanying analysis, Debt Collectors Re-Evaluate Medical Debt Furnishing in Light of Data Integrity Issues, which spotlights the data integrity challenges inherent in furnishing medical debt.

Consumers can submit complaints about credit reporting companies and debt collectors by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their companies have violated federal consumer financial protection laws, including the Fair Credit Reporting Act and the Fair Debt Collection Practice Act, are encouraged to send information about what they know to whistleblower@cfpb.gov.

###

The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

Official news published at https://www.consumerfinance.gov/about-us/newsroom/cfpb-finds-one-third-decline-in-collections-items-on-consumer-credit-reports/

Images courtesy of PixaBay

Related Posts

FTC and DOJ File Statement of Interest in Hotel Room Algorithmic Price-Fixing Case

The Federal Trade Commission joined by the Justice Department’s...

FTC Releases 2023 Privacy and Data Security Update

The Federal Trade Commission released its Privacy and Data...

RedeemTV Announces New Documentary: ‘The Shroud Face to Face’

RedeemTV Announces New Documentary: ‘The Shroud Face to Face’
Company Logo

RedeemTV ? Streaming Goodness

Vision Video’s streaming platform RedeemTV is set to unveil the highly anticipated documentary The Shroud Face to Face on March 28, 2024.

The Shroud Face to Face, produced by The Nexus Institute and The Shroud LLC, is a captivating documentary that unravels the enigma of the Shroud of Turin. With cutting-edge technology and expert insights, the film provides a face-to-face encounter with this iconic relic, inviting audiences to delve into its history, authenticity, and the profound questions it raises.

This visually stunning film, based on the book The Shroud Face to Face by acclaimed author and filmmaker Robert Orlando, offers an immersive exploration of the centuries-old mystery surrounding the Shroud of Turin and has been endorsed with high praise.

"This is a compelling and convincing account of the single most fascinating relic in the Christian world. This is for anyone seeking to understand the significance and history of the Shroud of Turin.” — Bishop Robert Barron, founder of Word on Fire

'The Shroud Face to Face'

Watch Trailer: https://watch.redeemtv.com/trailer/the-shroud-trailer

RedeemTV is a FREE, donor-supported, Christian streaming platform with over 250,000 subscribers. Streaming more than 5,000 videos, it provides family-friendly content while continuing to spread the message of Jesus.

Vision Video is a leading DVD and film distributor, committed to bringing impactful and compelling stories to audiences worldwide. With a focus on cinematic excellence, Vision Video partners with filmmakers to showcase thought-provoking narratives that inspire and captivate.

The Nexus Media focuses on TV, motion pictures, books, and screenplays, along with award- winning documentaries and shorts. Our team has years of experience in media storytelling and developing well-crafted engaging content. We invite you to view some of our past projects, The Divine Plan and Silence Patton, and participate in our new initiatives.

Stream FREE on RedeemTV: https://redeemtv.com.

Find us on Facebook at https://www.facebook.com/RedeemTV.

Follow us on Instagram at https://www.instagram.com/redeemtv1.

Contact Information:
Danielle Tumminelli
Marketing & VOD Distribution Manager
danielle@visionvideo.com
484-750-2485


Original Source: RedeemTV Announces New Documentary: 'The Shroud Face to Face'
green agriculture project
- Part of VUGA Media group -best seo company