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CFPB Shuts Down Commonwealth Financial Systems for Illegal Debt Collection Practices

Medical debt collector ignored consumer disputes of unverified debts

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against a medical debt collector, Commonwealth Financial Systems, for illegally trying to collect unverified medical debts after consumers disputed the validity of the debts. Under the order issued today, the company will cease operations and pay a $95,000 penalty to the CFPB’s victims relief fund.

Commonwealth Financial Systems is a nonbank corporation with its principal place of business in Dickson City, Pennsylvania. Commonwealth is a third-party debt collector that specializes in the collection of past-due medical debts and furnishes information about consumer collection accounts to consumer reporting companies.

Commonwealth’s actions violated the Fair Credit Reporting Act because the company failed to conduct reasonable investigations of disputed debts and failed to inform consumer reporting companies that certain information was being disputed. Commonwealth also violated the Fair Debt Collection Practices Act because it continued to attempt to collect disputed debts without substantiating documentation.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against entities violating consumer financial protection laws, including the Fair Credit Reporting Act and Fair Debt Collection Practices Act. Under the CFPB’s order, Commonwealth must:

  • Shut down permanently: Commonwealth is banned from participating in or assisting others in any debt collection activities, debt buying, debt selling, and consumer reporting activities.
  • Tell consumer reporting companies to delete all information: Commonwealth must request all consumer reporting companies to whom it previously furnished information about any consumer to delete all collection accounts for such consumers.
  • Pay a $95,000 fine: Commonwealth will pay a $95,000 penalty to the CFPB’s victims relief fund.

Read today’s order.

Tens of millions of people are pursued by debt collectors for medical bills, and the CFPB has described the significant evidence, including reports from consumers themselves, that the collection, furnishing, and reporting of medical bills is plagued by inaccuracies. Accordingly, the CFPB has taken numerous actions on the issue of medical debt. In November, the CFPB issued a report highlighting the challenges American families face when debt collectors pursue allegedly unpaid medical bills. In September, the agency kicked off a rulemaking to remove medical debt from credit reports. Along with the U.S. Department of Health and Human Services and the U.S. Department of Treasury, the CFPB launched, in June, an inquiry into costly credit cards and loans pushed onto patients to pay for health care costs. Also in June, the CFPB took an enforcement action against Phoenix Financial Services for illegal medical debt collection and credit reporting practices.

Read about the CFPB’s rulemaking to remove medical tradelines from consumer reports.

Read about the CFPB’s other work to stop unfair medical debt collection and coercive consumer reporting practices.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to To learn more about reporting potential industry misconduct, visit the CFPB’s website.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit