New Orleans       The New York State Attorney General Eric Sneidermann announced a settlement with three of the largest credit reporting agency, TransUnion, Equifax, and Experian, and for a change this actually looks like – with work – a big win for consumers.

The companies have agreed to replace their useless, robot-friendly, computerized, offshore operation with real people who will actually sort through the complaints and information from consumers.  The companies also agreed to be more transparent about the fact that consumers have the right to a free copy of their personal credit reports annually to make sure that they have a chance to get rid of bad information and black marks.  Furthermore the only thing that they can report at all has to be based on a real agreement and promise to pay as opposed to a fine or ticket or the like.  All of that is good, though perhaps difficult to police.  More transparency is always good, but unfortunately it only works for the few people who are looking, and most don’t look until a problem crops up, and even here, the devil is likely in the details.

The real win is that the companies agreed to not list any medical debt until six months after it is generated.  That’s potentially huge!   Recent information from the Consumer Financial Protection Bureau indicated that almost half of the negatives on all credit reports are based on medical debt, and the average levels of the debt are only a couple of hundred bucks.  As Mark Rukavina with Community Health Advisors told the New York Times

“Too many people are surprised to learn of medical billing problems only after having a bill sent to collection and being forced to deal with damaged credit.  Having the agencies finally agree to remove medical debts that were reported and subsequently paid by insurers is long overdue.”

Yes, indeed!

Perhaps as importantly couple this with what Rukavina told listeners on KABF/FM’s Wade’s World about the coming process for nonprofit hospitals before they can take emergency collection actions.  Hospital clients will have 120 days before the hospital can go to court, take out liens, or try to garnish pay in order to come to terms with their bill and potentially straighten out errors and overcharges, and maybe even determine their eligibility for charity care.  At the 90 day mark, they can file an appeal from Rukavina’s interpretation of the Affordable Care Act regulations.   Match that timeline with the new credit reporting agreement, and it appears a patient would have an additional 90 days before their efforts to resolve any disputed bill would ever end up besmirching their credit.   Given the relatively small, couple of hundred dollars in average bills being reported, the removal of this weaponized credit threat with timely filing and decent representation, a consumer would stand a good chance at winning a resolution, be it payment plan or wiping the slate clean.

Representation and access to the appeals system, whether with the hospitals or with the credit companies, is where the rubber will hit the road, and it could entail screeching and screaming.   Chi Chi Wu with the Consumer Law Center nails this in the Times’ report as well, warning that, “… making sure that the credit bureaus comply with the agreement will be another task.”

And, that’s a task we better be ready to handle to make all of this work in reality, rather than just in principle.

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