[Enigma]

Read section 604 of the FCRA - Limitations on Creditors -

As I read it, medical debt cannot be used to deny or grant credit.

But I understand from various sources that some folks see a FICO score improvement when the medical debt has been disputed off a CR. Where that person only had medical debt as a bad TL.

If so, that's a lawsuit waiting to happen and a possible class action at that.

In Discovery I'd ask for the algorithm to the FICO model, watch how fast and how big of a check they'll write to protect it.

[Qtip]

I have a friend, all of her debt is medical debt in FL Maybe we can get started with her, her score is on the mid 400.

[stargazer0725]

I have 4 derogs left on my reports - all small medical collections that are 5 years old. My score factors list the collections as a reason why my score is lower than it should be.

[jlynn]

(2) Limitation on creditors. Except as permitted pursuant to paragraph (3)(C) or regulations
prescribed under paragraph (5)(A), a creditor shall not obtain or use medical
information (other than medical contact information treated in the manner
required under section 605(a)(6)) pertaining to a consumer in connection with any
determination of the consumer's eligibility, or continued eligibility, for credit.

(3)(C) as referenced:

(C) intends to use the information in connection with the underwriting of
insurance involving the consumer; o

5(A) as referenced:

(5) To an agency administering a State plan under Section 454 of the Social Security
Act (42 U.S.C. § 654) for use to set an initial or modified child support award.
(b) Conditions for Furnishing and Using Consumer Reports for Employment Purposes.
(1) Certification from user. A consumer reporting agency may furnish a consumer
report for employment purposes only if
(A) the person who obtains such report from the agency certifies to the agency
that
(i) the person has complied with paragraph (2) with respect to the consumer
report, and the person will comply with paragraph (3) with respect to the
consumer report if paragraph (3) becomes applicable; and
July 30, 2004 14
(ii) information from the consumer report will not be used in violation of
any applicable Federal or State equal employment opportunity law or
regulation; and

605(a)(6)
(a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

(6) The name, address, and telephone number of any medical information furnisher that has notified the agency of its status, unless--

(A) such name, address, and telephone number are restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer; or

(B) the report is being provided to an insurance company for a purpose relating to engaging in the business of insurance other than property and casualty insurance.

Enigma, this thread should be moved to credit, and would you check that I have the right sections quoted that pertain to this discussion? I posted this to make discussion easier.

[jlynn]

deleted - got ahead of myself.

[jlynn]

The way I read it Stargazer, if you are denied for "too many collections", and the only collections you have are Med collections then you have a standing. However, if you have even 1 non-med collection - it would take a lot of Discovery to prove that the specific creditor doesn't consider 1 collection, 1 too many.

[stargazer0725]

Originally Posted by jlynn

The way I read it Stargazer, if you are denied for "too many collections", and the only collections you have are Med collections then you have a standing. However, if you have even 1 non-med collection - it would take a lot of Discovery to prove that the specific creditor doesn't consider 1 collection, 1 too many.

The only collections on my report are medical.

[hannah]

Enigma, as I told you last night, there are several seniors I have helped dispute medical debt off their reports and their scores have risen with no other change to the reporting so it is safe to say that medical debt is figured into FICO.

Class action time?

[jlynn]

Originally Posted by stargazer0725

I have 4 derogs left on my reports - all small medical collections that are 5 years old. My score factors list the collections as a reason why my score is lower than it should be.

Interesting - just reread your post, there doesn't seem to be anything to preclude a low FICO for the med collections - so score driven creditors are going to have to come up with some creative explaining for denying you.

We know from the recent talk about the ECOA that creditors have to give specific explanations why they deny you - so if too many collections is a part of their reason for denial, they could be in violation of the FCRA.

[jlynn]

Originally Posted by hannah

Enigma, as I told you last night, there are several seniors I have helped dispute medical debt off their reports and their scores have risen with no other change to the reporting so it is safe to say that medical debt is figured into FICO.

Class action time?

Read the statute - it pertains to creditors. This is going to be somewhat a similar argument as the removal of AU's as part of the scoring algorithm.

But your complaint would be with the creditors not FICO.

Creditors might have a suit against FICO for selling them algorithms that get them in trouble with the FCRA and ECOA - but don't hold your breath for that one.

[stargazer0725]

Originally Posted by jlynn

Interesting - just reread your post, there doesn't seem to be anything to preclude a low FICO for the med collections - so score driven creditors are going to have to come up with some creative explaining for denying you.

We know from the recent talk about the ECOA that creditors have to give specific explanations why they deny you - so if too many collections is a part of their reason for denial, they could be in violation of the FCRA.

I've gotten 2-3 letters lately that reference the collections as a reason for denial. I'll have to pull them out after I get back from vacation and see what reports they pulled and what other reasons might have been listed (certainly not a late pay, because I don't have one).

[drivel]

You guys are going to have to take off the blinders for this one and put on your I heart reality T'shirts.

The statute prohibits a denial of credit because the applicant has a medical condition. The creditor can look at how the applicant handled the outstanding account so the applicant is not being denied because of a medical condition, but can be denied for a medical collection.

[hannah]

Originally Posted by jlynn

Read the statute - it pertains to creditors. This is going to be somewhat a similar argument as the removal of AU's as part of the scoring algorithm.

But your complaint would be with the creditors not FICO.

Creditors might have a suit against FICO for selling them algorithms that get them in trouble with the FCRA and ECOA - but don't hold your breath for that one.

You are correct but I was also thinking CRA's for another reason I am not at liberty to discuss right now.

[jlynn]

Originally Posted by drivel

You guys are going to have to take off the blinders for this one and put on your I heart reality T'shirts.

The statute prohibits a denial of credit because the applicant has a medical condition. The creditor can look at how the applicant handled the outstanding account so the applicant is not being denied because of a medical condition, but can be denied for a medical collection.

Relax I'm rereading it now - I do see what you are saying - and you'll have to buy me the Tshirt - I have to pay AnkleBoy's med bills shortly.

[drivel]

Originally Posted by jlynn

Relax I'm rereading it now - I do see what you are saying - and you'll have to buy me the Tshirt - I have to pay AnkleBoy's med bills shortly.

It will be in the mail.


Come on Enigma, you know better!!!!

[spinn]

Logically it fails to say medical collections should not not be used in the credit granting evaluation process.

I certainly wouldnt want to be forced to lend someone money who owed the DR who misdiagnosed them $10k.

Its not fair morally but even congress isnt that dumb.

Am I agrreing with drivel????????? I thought he was banned. Where is QTIP?

[Hedwig]

No, Drivel was just in time-out for a while.

As long as he plays nice he'll be around.

[jlynn]

Texas tried to pass a bill that medical collections could not be reported on your credit report. Sadly, it failed.