On October 1, the CFPB issued an advisory opinion regarding medical debt collection practices and debt collectors’ obligations under the FDCPA and Regulation F. The advisory opinion identified practices for which debt collectors will be considered strictly liable for, such as (i) collecting amounts not owed because they were already paid, either fully or partially, including when paid by insurance or a government payor; (ii) collecting amounts not owed due to federal or state law, such as where employers or insurers are liable for the debt under state workers’ compensation programs; and (iii) collecting amounts above what can be charged under federal or state law, including limits set by the No Surprises Act or state common law remedies if there is not an express contract.

The CFPB also noted specifically that debt collectors will be liable for attempting to collect amounts for services not received, such as where a medical provider uses a code that entitles the provider to greater compensation than the level of care than what was provided, known as “upcoding.” The advisory opinion also stated that debt collectors must have a “reasonable basis” for asserting the validity and correctness of the debts they collect, which may require obtaining underlying patient agreements, billing history or other contracts.

The advisory opinion provided guidance on how the CFPB interprets “default” under the FDCPA for medical debt, stating that whether a debt will be considered “in default” will be determined by the terms of the agreement between the consumer and the medical provider under applicable law governing the agreement.