"Medical bills with health insurance" via Attercop311 on Flickr, Creative Commons licensed
"Medical bills with health insurance" via Attercop311 on Flickr, Creative Commons licensed
“Medical bills with health insurance” via Attercop311 on Flickr, Creative Commons licensed

A debt collector with ties to one of the nation’s largest private hospital chains spent yearsviolating basic provisions of the Fair Debt Collections Practices Act and the Fair Credit Reporting Act, federal regulators say.

Consumers who dispute a debt are entitled to a response within 30 days, according to federal law. Medical debt collector Syndicated Office Systems took, on average, more than 90 days to respond to disputes, and in some cases, took more than a year, according to the Consumer Financial Protection Bureau.

Syndicated Office Systems, which does business under the name Central Financial Control, is an “indirect subsidiary” of Conifer Health Solutions, the CFPB said. Conifer provides billing services to hundreds of hospitals nationwide; its parent company is Dallas-based Tenet Healthcare, which is one of the largest publicly traded hospital operators in the country.

“These violations are particularly egregious given the challenges many consumers already face who are attempting to navigate the medical debt maze,” said CFPB Director Richard Cordray. “We are putting a stop to these illegal practices and getting consumers the relief they deserve.”

Consumers who complain about credit reports with Central Financial Control entries sometimes describe the firm as Tenet’s debt collection arm.

While the CFPB describes Syndicated/Central Financial as an “indirect subsidiary” of Conifer, reporters who call Central Financial Control are told to call or email Conifer’s senior director of communications, Sharon Lakes.

When asked to further explain the relationship between Syndicated, Conifer and Tenet, Lakes refused, other than to say it was inaccurate to call Central Financial the collection arm of Tenet. She said she wouldn’t answer any other questions, pointing to an emailed statement instead.

“Throughout the investigative process, CFC was forthcoming and responsive to all CFPB requests for access to data and other information relating to the company’s medical debt collection policies, procedures and processes,” the statement read. “The CFPB found no unfair, deceptive, abusive acts or collection practices in its investigation.”

According to the CFPB, Syndicated failed to respond in a timely fashion to 13,713 consumer disputes.

Consumers who believe they are being billed in error, or being dinged on their credit reports in error, have the right to file what’s called a “direct dispute” with the debt holder. Federal Law requires a timely response, including documentation of the debt.

Syndicated also failed to send required debt validation notices after initial contact with consumers more than 10,000 times, the CFPB said.

“Because the company furnishes information related to past-due medical debt, the information consumers seek to dispute or validate has the potential to lower credit scores,” the CFPB said. “Consumers spent time and money attempting to follow up on unresolved disputes and experienced distress and confusion due to the delays. The CFPB found that the company had no policies or procedures in place to investigate these consumer credit report disputes.”

To settle the allegations without admitting wrongdoing, Syndicated will refund consumers $5 million — including the value of every payment made when Syndicated failed to provide notice or answer disputes. It will also pay a $500,000 civil penalty.

Consumers should check their credit reports regularly to spot errors or other issues. You’re entitled to a free credit report every year from the three major credit reporting agencies through AnnualCreditReport.com, and you can get a free credit report summary on Credit.com, updated monthly, to watch for important changes.

This article originally appeared on Credit.com and was written by Bob Sullivan.