The three major credit reporting agencies have filed a new motion to dismiss a class-action lawsuit against them accusing them of conspiring together when they announced a decision not to include medical debts under $500 on consumers’ credit reports.
The lawsuit, brought by Dr. Derrick Adams, Cape Emergency Physicians, and AmeriFinancial Solutions, LLC, challenges the recent changes made by Experian, Equifax, and TransUnion to exclude certain medical debts from consumer credit reports. The plaintiffs claim that this decision, which removes medical debts under $500 or those less than one year overdue, harms medical providers and debt collectors by reducing patients’ motivation to pay their outstanding bills. However, the credit reporting agencies are pushing for the case to be dismissed, arguing that the plaintiffs fail to present a valid legal claim.
In their motion to dismiss, the defendants argue that the plaintiffs have not sufficiently demonstrated that their injuries are connected to the CRAs’ actions. They assert that the plaintiffs’ alleged harm, which includes a “devaluation injury” from fewer payments made by patients, is too indirect and speculative to justify an antitrust claim. According to the defendants, the plaintiffs’ injury is not a result of the CRAs’ decision to remove certain medical debts from credit reports, but rather stems from the independent actions of patients who may choose not to pay their medical bills due to the reporting changes.
The credit reporting agencies emphasize that the plaintiffs, particularly the debt collectors, do not have standing to bring the lawsuit because they do not directly purchase credit reports from the CRAs. The defendants argue that only parties who directly transact with the CRAs—such as creditors and lenders—would have standing to claim injury resulting from the exclusion of medical debts. The defendants also point out that the plaintiffs’ theory of injury is speculative, relying on the assumption that the removal of debts under $500 from credit reports will cause patients to delay or avoid payments. The CRAs assert that no factual evidence has been provided to support this theory, especially when they have made the change in response to consumer protection concerns and in line with regulatory guidance from the Consumer Financial Protection Bureau.
Furthermore, the motion to dismiss underscores that the plaintiffs have failed to show that their injury is tied to any unlawful conduct. The defendants argue that removing medical debts under $500 from credit reports is not anti-competitive but a response to increasing consumer pressure and regulatory oversight. The CFPB has repeatedly criticized the inclusion of medical debt in credit reports, stating that it is less predictive of future payment problems than other forms of debt.
