Members of the U.S. military are especially vulnerable to erroneous or unscrupulous actions by companies connected with credit ratings and debt collection, the federal Consumer Financial Protection Bureau concluded in an annual report issued Monday (June 13).
The report focuses each year on the financial concerns of members of the military.
“Errors on credit reports can jeopardize service members’ financial readiness, and ultimately, their ability to protect our nation,” CFPB Director Rohit Chopra said in a prepared statement issued alongside a summary of the report. “No service member, veteran or military family should be subject to credit reporting rumors and innuendo, nor should they feel coerced to pay a bill they do not owe.”
The biggest problems service members have reported to the bureau are inaccurate bills, aggressive collection of medical debt and failure of credit bureaus to address alleged inaccuracies.
Service members are particularly vulnerable to debt collectors and credit bureaus because of the damage a poor credit rating can do to military careers, the CPFB’s summary stated.
“When issues with credit reporting, debt collection, or medical billing are not appropriately resolved, the consequences for service members and military families can include loss of housing, separation from service, denial of security clearances, or loss of access to affordable healthcare,” the report stated.
Officers, in particular, are subjected to routine credit checks by the government in connection with security clearances.
The frequency with which service members and their families are required to relocate also creates specific needs for clean credit profiles, the report said.
The agency called for specific steps to improve the plight of soldiers and veterans and stated it will intervene on behalf of members of the military.
“The CFPB will use its authorities — including supervision and enforcement — to meet its statutory objectives and ensure that military members and their families receive quality responses to their complaints and do not suffer from unfair debt collection or credit reporting practices,” the CPFB said in a statement.
The agency called on credit bureaus to ensure they respond in a timely manner to complaints forwarded to them by the CPFB.
Additionally, the report calls on medical providers to ensure there are sufficient systems to work with federal organizations that pay for the health care of members of the military and their families.