A dermatologist in northern California has filed a class-action lawsuit against the three major credit reporting agencies — Equifax, Experian, and TransUnion — accusing them of violating the Sherman Antitrust Act because their decision to not include medical debts under $500 on consumers’ credit reports is a “transparent conspiracy” that is diminishing access to medical care by driving providers out of the market.
A copy of the complaint, filed in the District Court for the Eastern District of California, can be accessed by clicking here.
The suit attacks the decision made by the three credit reporting agencies back in March 2022 to change how medical debts were being reported on consumers’ credit reports. Among the changes was to not include any unpaid medical debt less than $500, a change that went into effect earlier this year.
The decision by the three bureaus is a conspiracy to restrain competition and has left healthcare providers, like the plaintiff “at a severe financial disadvantage compared to larger and more expensive medical practices, like hospitals,” according to the complaint.
The Sherman Act, which was enacted way back in 1890 and is named for Sen. John Sherman, is an antitrust law that outlaws conspiracies that unreasonable restrain interstate and foreign trade.
Because the three credit reporting agencies made the decision together to no longer include debts under $500 on consumers’ credit reports, the plaintiff and other providers “have no feasible alternative to provide information about unpaid medical bills under $500 for the purpose of including them on consumer credit reports,” according to the complaint. The plaintiff did not include any details in the complaint about how much his revenue and unpaid debts have changed since the $500 credit reporting floor was put in place earlier this year.
The complaint also accuses the defendants of violating the Cartwright Act, a California state law that prohibits competitors from restraining trade, fixing prices or production, or reducing competition.
