Question:
Hi... was hoping someone might be able to help me with the following
situation...
I had a Visa account that was charged off in 1991. I have
documentation supporting this. The account was on all three of my
credit bureau reports and properly dropped off in 1998.
However, in 1995 the account was picked up by a collection agency. In
Jan 2000 they reported to equifax and experian that the date of last
activity was 1995. So, I sent letters with documentation to equifax
and experian showing the collection account was for a VISA account
which was charged off in 1991, and thus the collection account should
no longer appear.
Equifax removed the item, experian said the item would remain. Huh? A
very frustrating phone call to experian resulted in the following:
Experian claims that because this account is prior to 1/1/98, the
collection agency has the right to report the last date as the date
they bought the account. They assured me it would now drop off in
2002. Huh? By their reasoning the collection agency could sell the
account off again in late 2001, and then since the account is prior to
1/1/98. they could report a last date of 2001 and keep it on my record
till 2007. Then repeat again, etc... The lady I spoke to said that was
correct, and she has seen people with info on their report for over 21
years. WTF!?! That makes no sense to me.
I then read to hear the section of the FCRA which states that the 7
year clock starts from the date the last payment was received. She
said that the provision I was referring to was only for accounts after
1/1/98, and that I should go find a copy of the version of the FCRA
that was in affect when my account was charged off.
She further suggested I contact the collection agency if I had any
other issues, and that as far as experian was concerned they are done
with the dispute.
I do not want to contact the collection agency without knowing that I
am 100% correct. So, can anyone shed some light on the situation for
me?
Answer:
Q: I had a Visa account that was charged off in 1991.
I have documentation supporting this. The account was
on all three of my credit bureau reports and properly
dropped off in 1998.
However, in 1995 the account was picked up by a collection agency. In
Jan 2000 they reported to equifax and experian that the date of last
activity was 1995.
A: This kind of confusion and collections abuse is the reason why the Fair
Credit Reporting Act was changed.
Q: Equifax removed the item,
A: They may have contacted the collection agency, requesting a confirmation
on the listing, and just never received a response.
Q: Experian said the item would remain.
A: I have seen old (pre-FCRA-amendment) charge-offs (original creditor -
not collection) with expiration dates that indicated that the *new*
rules were being applied across-the-board by Experian. But maybe not
always.
Q: Experian claims that because this account is prior to 1/1/98, the
collection agency has the right to report the last date as the date
they bought the account.
A: If they keep up with this line of excuses, point out that it does *not*
become some kind of new account, just because the collection agency
bought it (they are still "third-party," according to the FTC.) At
worst, the last date of activity *should* be the charge-off date by the
original creditor. (That would give a time limit similar to what the
new rules specify.)
Q: The lady I spoke to said that was correct, and she has
seen people with info on their report for over 21 years.
WTF!?! That makes no sense to me.
A: It's a sleazy practice called "re-aging."
Q: I then read to hear the section of the FCRA which states that the 7
year clock starts from the date the last payment was received.
A: Actually, the new rule says that it starts at the date of the original
delinquency (when you *missed* a payment, and never again became
current), plus 180 days. (The 180-day point is also about the time that
some/many creditors will declare a charge-off.)
Q: She said that the provision I was referring to was only
for accounts after 1/1/98,
A: Technically, that is true. But this is *not* a separate debt just
because it was purchased by the collection agency.
Q: She further suggested I contact the collection agency
if I had any other issues, and that as far as experian
was concerned they are done with the dispute.
I do not want to contact the collection agency without
knowing that I am 100% correct. So, can anyone shed some
light on the situation for me?
A: My guess is that you are dealing with some bottom-feeder agency that
buys very old, stale debts for maybe 1% - 4% of face-value. The statute
of limitations for filing a lawsuit against you has probably expired...
http://www.cardreport.com/laws/statute-of-limitations.html
So they are "playing hardball" with the bureau reporting. For general
advice on dealing with collectors, read...
http://www.cardreport.com/credit-problems/collection-faq.html
If you make it clear that you refuse to pay, and order them not to
contact you, then they might stash your debt away in archives (or sell
it off.) This could decrease the chances that they would confirm it
with the credit bureau(s) the next time you dispute it.
Disputing too frequently is frowned upon, and can get labelled
"frivolous and irrelevant" (and thus legally ignored.) If you don't
have any urgent need, I suggest waiting until six months after your
initial dispute with Experian. The write to them again (certified mail
with return receipt), and just say that the debt isn't yours.
Here is the current version of the Fair Credit Reporting Act. The
relevant part is Section 605(c) - Running Of The Reporting Period.
There is also some other material about the 1996 amendments (which took
effect Jan 1, 1998), plus some FTC interpretations on specific points...
http://www.cardreport.com/laws/fcra/fcra-menu.html
