Collector - March 2018 - 36
Understanding the Credit Reporting Landscape
Requirements are stricter for debt collection agencies that include credit reporting in
their collections process. Here's what you need to know.
By Katy Zillmer
he current credit reporting
landscape is complicated-
especially when it comes to
Increased regulatory requirements,
outside of the Fair Credit Reporting
Act and Health Insurance Portability
and Accountability Act, add to that
complication-but ultimately agencies have
the opportunity to decide what works best
for them and their clients.
It's important to evaluate that decision
on a regular basis based on feedback from
clients and taking into account risks on the
HOW IT STARTED
The FCRA and HIPAA include various
credit reporting requirements agencies
must comply with, in addition to standards
from individual consumer reporting
agencies (CRAs). The laws also permit the
reporting of medical information to CRAs,
with some restrictions.
Regulations increased as a result of a
2015 settlement agreement with multiple
state attorneys general, and the three major
nationwide CRAs-Experian, Equifax,
and TransUnion-launched the National
Consumer Assistance Plan (NCAP), which
took effect in September 2017.
Debt collection agencies or their clients
generally have a period of seven years to
report medical accounts, unless state law
provides for a different time period. The
seven-year reporting period begins to run
180 days after the date of delinquency.
The NCAP includes more requirements
when it comes to the date of delinquency.
For example, the date of first delinquency
with the original creditor needs to be
determined by the provider and furnisher
based on the underlying financial
agreements and the creditor's policies for
when an account becomes delinquent.
The 180-day reporting requirement after
the date of delinquency is one of many
factors that influence agencies' and clients'
choice to engage in credit reporting.
"The new rules are not difficult to comply
with; however, in general there's been a trend
over the past couple of years where medical
debt has been in the spotlight from a creditor
standpoint and a regulatory standpoint," said
Donna Nicholson Stief, executive director of
the Credit Bureau of Lancaster County Inc.
ACA International members report
that since the 2017 NCAP requirements
took effect-and even before that-credit
reporting, especially medical debt, has been