Can an insurance co. threaten to send you to collections and to ding your credit when they made a mistake and overpaid?

Question

I have been going through cancer treatments and have been on long term disability. The insurance co. made a mistake and are now wanting me to pay back $13800.00 + dollars and have threatened me with collections. Can they ding my credit when we did not enter into a credit agreement with them?

Tim Akpinar · Answer

Insurance companies can pursue overpayments. One option might be to discuss with your state's Department of Insurance in terms of your consumer protections and options, based on amount, nature, and timeline of overpayment.  Good luck

James L. Arrasmith · Answer

I'm sorry to hear you're going through this while dealing with cancer treatments. It's important to understand that insurance companies do have the right to seek repayment if they've made an overpayment, but the methods they use must comply with legal standards. If there was no credit agreement, they shouldn't threaten your credit score immediately. 
 
You have the right to dispute the overpayment and request a detailed explanation of how the mistake occurred. Make sure to document all your communications with the insurance company. It’s a good idea to respond in writing, clearly stating your case and asking for an appeal or a repayment plan that you can manage. 
 
If the insurance company persists with threats of collections, you might want to seek assistance from a consumer rights organization or a legal advisor. They can help you understand your rights and the best way to protect your credit score during this dispute. Remember, you're not alone, and there are resources available to support you through this.

Q: Can an insurance co. threaten to send you to collections and to ding your credit when they made a mistake and overpaid?