Can they do this: Old 'charged off' debt was 'bought' by a collection agency and REPOSTED on my credit report.

Question

I was checking my Equifax Credit Burea credit file today online. And noticed that a very old forgotten credit card debt (providian, I think), was 'bought' by an agency and they reposted in in the current month's date on my credit report online. Is this legimate? It was charged off long ago, and I forgot about it. Can they 'make it more current' like that?

Answer 1

Echo is right...but I need to clarify something in her reply.

You need to be aware of two dates. One is the credit reporting limit, and the other is the Statute of Limitation.

Credit reporting time is how long a credit reporting agency is allowed to report your debt. By law, this time is 7 years, beginning on the date of the delinquency.

Many collection agencies will change this date in order to keep the report on your record. This is called "re-aging" and it's illegal. You can file a very simple small claims court suit against them and easily win $1000 plus costs and damages.

Statute of Limitations is the time that a debt becomes "legally collectable". After this date, the creditor can not sue you or take any legal action to collect. They can continue to try and collect the debt, but they are generally limited to just harrassing you. That can be quickly stopped with a "cease and desist" letter. After they receive this letter, they can't contact you again, or they risk a small claims suit for (you guess it!) $1000.

The date of the SOL begins on the last transaction. This is a very grey area, I'm finding. Sending them a payment will restart the clock. Offering to pay it can sometimes do it. I've read a number of court cases on this, and the judges can't seem to get together on just what constitutes a "volation" of a contract. So it's best not to even talk to the collection agent, or make it clear from the beggining you are NOT offering to pay them anything.

Read the link below. It goes into all of this, plus has a list of each state's Statute of Limitation.

The next link goes into the procedure of how to force the creditor to validate the debt, and dispute it with the credit reporting agencies so it can be removed from your record.

Still need help? Just ask. The reason these collection agents get away with it is because you don't know the law, and don't know what to do to defend yourself.

Now you do.

Answer 2

Hi Searcher,

Regardless of when a collection agency receives or purchases a debt for collection, it cannot legally report the debt longer than seven years from the date that the account first became delinquent and stayed delinquent. If the seven years are almost up. These items should drop off your credit report as required by the Fair Credit Reporting Act.

Information about a lawsuit or an unpaid judgment against you, however, can be reported for seven years or until the statute of limitations runs out, whichever is longer. So, if the collection agency sues and wins a judgment against you, that information can be placed on your credit report.

The Fair Debt Collections Practices Act spells out what steps a creditor or collection agency can take in pursuing repayment, steps you can take to stop a collector from contacting you, and how you can file a complaint against a collector for noncompliance with this act.

Echo is right, however I would like to point out what can re-date DOLA.

Calling and making any kind of payment arraignment can freshen the date.

If I see that some one is 6y6m on a applicable derog., I tell them to absolutely leave it alone.

Good luck,
~Trey

Answer 3

Wow anginfla, have you ever read the FDCPA, FTC or FCRA????????

Oh, wait, I see that you worked for Equifax and collectors sooooo I guess not.

By the way, I don't think Alan will like seeing you use his name to advertise your business, which you seem to like to do.

The date of last activity (DOLA) "is not" the last time just anyone has done anything regarding the account.

That date comes from the first time the debtor became 30 days late and never brought the account current preceding the charge off. The only time a debt can legally be re-aged is if the "debtor" had brought the account current, or, if allowable in their state, made a new contract to pay.

They can continue to try to collect the debt long after the statute of limitations for reporting or collecting has run. They cannot add it to a credit report if it is past the original legal reporting period. They cannot legally sue if it is past the statute of limitations to collect.

As far as a collection agency purchasing an old debt, that's exactly what junk debt buyers do. They do not care how old the account is or if it is past the statute of limitations to collect on.
They purchase the debts for pennies. If only one out of a hundred debtors pay up, they are still making money.

Anyway, to the original poster - what is your definition of "Old"? 3 years, 5 years, 10 years?

You need to learn the statute of limitations in your state. If you find that you are out of the statute of limitations in your state, send the collection agency a debt validation letter and dispute the account with the credit bureau.

After you receive a response from the collection agency and you are positive that you are out of the statute of limitations, send them a SOL letter.

Answer 4

The date of last activity is the last time anyone has done anything regarding the account. That would be either you making a payment or using the card/ or the creditor selling the account, charging it off as bad debt or moving it into a recovery status. Most people think that date of last activity means the last time you used the card but it doesnt. If the charged off date is more than 7 years ago then they cannot report to the credit bureau but they can continue collection efforts. No collection agency is going to purchase or even obtain contract paper that has been charged off for 7 years. It would be a waste of their time. I have been in credit/collections for over 17 years and used to work for Equifax itself as well as banks like Chase. I now work for a collections law firm and have my own business as well. I can assist you in credit repair as well as disputes that would hinder your credit rating. I have settled accounts for many people including Alan Alda in 2001. Let me know if I can assist you in any way. I would be happy to do it free of charge. I would only ask for referral by word of mouth. Below is my website and the web address to the Federal Trade Commission in the section of the Fair Debt Collection Practices Act and an email to contact me if needed.

Answer 5

No this is not legal. They can buy the debt and report the debt and even try to collect the debt but they can NOT list it as a new debt with a more recent date. The charge off date must remain the same. Debts are to be removed from credit reports 7 years from the original charge off date.

Contact the credit bureau to dispute it and if that does not help contact your states attorney general.

http://credit.about.com/od/fastfactsfaqs/f/reportperiod.htm

This page has some links to other resources that might help you.

Answer 6

The Federal Trade Commission and the do not call list states that they are not allowed to change the debt. Each state has a Statue of Limitation that certain thieves ignore that enjoy harassing people Portfolio Recovery likes to bother people, they call at 7:30 AM and won't list their agency for debt Ten years old and try to charge more than what is owed. Pennsylvania's statue of limitations is four years. I had book companies send me books that had lice in them and I had to throw the books away without reading or opening. Groups of people that are bent on taking and stealing on the trumped grounds that its legal need removed from their practices and placed in poverty deprived and diseased like their victims that they pursue.

Answer 7

This is not legal but very common. You must contact the company that is attempting to repost your expired debt and deny the claim completely if your community's statute of limitation has expired. Your local legal clinic can provide you with your appropriate laws.

Unless you want to pay the original indebtedness in it's entirety (plus late fees and penalties), do not make any offers to pay even a single penny on this claim. If you accept responsibility in word or action they can renew the debt and it becomes "current" again (and actionable).

Answer 8

Yes. Charged off does not mean that it is free from obligation, only that they cc company wrote it off as bad debt. They do have the right to sell it to someone willing to collect on it, and it then becomes new debt. I would suggest calling them to work out a settlement.

Answer 9

Yes... and they do.. the old collection should note that it has been sold or transferred though. Check it out. I know it looks bad. Have you tried settling with the collectors for less than the amount due? Try it. Get the collection showing paid that way you don't have to chase around your collections. Good Luck!

Answer 10

ILLEGAL - it's called a "scavenger debt collector" They cannot post it UNLESS you promised someone to make a payment or have made a payment to the collector. If not - simply call them or write them and tell them it is PAST THE STATUTE OF LIMITATIONS AND YOU DO NOT OWE THE DEBT. THEY MUST REMOVE IT FROM YOUR CREDIT REPORT.

This is only true if it is past the 7 year mark.

I hope it helps! Go get 'em tiger!