What steps to take against a Collection Agency?

Question

I recently received my credit dispute results and it wasn't found in my favor. I know I became delinquent on a Household Bank Visa account in July 1999 and I never made another payment after that. I didn't mean to default but I had problems that couldn't be avoided and it resulted in financial difficulty. The strange thing is, the original creditor was taken off my Experian report but the collection agency that is trying to collect for Household Bank is scheduled to remain until July 2007. Isn't this a violation of the FCRA to extend the reporting period? How could this collection agency verify the account as accurate? I've never contacted the collection agency and they haven't contacted me. I just want to what are my options.

I know for a fact that after 7 years negative information must be removed. If it's a bankruptcy it would remain on your credit report for 10 years. I'm only asking what steps I need to take against a collection agency that is violating the FCRA.

As for juncogirl, Household Bank was reported to all 3 CRAs (TransUnion, Experian and Exquifax, I have my credit reports from 2004 & 2005) and is off all 3 2006 reports! It's not a case of me being lucky, it's merely the credit reporting laws was applied accurately. Don't give false information that will confuse consumers!

Thanks Studly. I do have my credit reports from all 3 CRAs from 2004, 2005 & 2006. The collection agency is Debt Recovery Solutions. Although Household Bank was reported to all 3 CRAs, Debt Recovery Solutions was only reported to TransUnion and Experian. I launched a dispute with TransUnion because they had this account to continue until 12/2006 and it was removed, but Experian said the agency verified the account.

Would this count as proof? Experian allows a consumer to check their report online for at least 90 days using the confirmation number from a mailed credit report. During the this time, Debt Recovery Solutions was reported to remain on my report until Febuary 2007, but it changed to July 2007. It should have been removed July 2006 when the original creditor was. Is this proof of them reaging the account? I did print out the credit report with the Febuary 2007 date and now I have this new date of July 2007.

Answer 1

You obviously have already figured out the previous responders don't have a clue of what they are talking about...so let me help you.

This is an easy problem to fix. You say you know the last transaction date is July, 1999? Can you prove it? Do you have any past credit reports with a differant date on it?

What is happening is the collection agent is "re-aging" the debt by changing the reporting period. This is illegal. They do it so that they can change the SOL dates and extend the time they can come after you.

To fix it, you have to send out a couple of certified letters/return receipt.

Send a dispute letter to the credit bureau demanding that they re-investigate this item. Include whatever proof you have to show the date is not reported right.

Send another letter to the collection agent. In it tell them that you are aware of the Fair Credit Reporting Act, and you can prove that the reporting date they are listing is wrong. Unless the item is removed within 30 days, you will sue them in small claims court for $1000 plus damages for violations of the FCRA by knowingly reporting incorrect data.

If this isn't fixed in 30 days, file the lawsuit. It can be done without a lawyer, and only costs from $25-$50 depending on the state you live in. If you have been denied credit, or if your current credit has excessive interest due to this bad credit report, you can sue them for damages also.

Read the links below. Contact me if you need more help.

Answer 2

From the research I did, it said that a collection account would stay on your record "For 6 1/2 years from the first 180 day delinquency of the original creditor." Basically, its 7 years from the point you become delinquent on yoru original account.

You are correct.

What you need to do is show the date of the ORIGINAL delinquency to the credit bureaus to prove that the collection agency just "renewed" an old debt instead of reporting a new one.


Edited to add: Check out this link-- it also agrees that is is 7 years from the original late pay: http://www.fool.com/news/commentary/2004/commentary04101902.htm (scroll down til you see collections in bold.)

Answer 3

All credit cards and most banks are being taken over in a quite insidious manner. If you look carefully at your credit cards and bank loans, you will find that most of these are owned by JP Morgan and Bank of America. MBNA America just merged with Bank of America. The point of this is that if you owe anyone anything, the debt is likely to be under the umbrella of one of these two ot three corporations and they are closing in fast. Your accounts and debts are being consolidated and followup on old loans is in the hands of these "new" conglomerates. Also, when you have a debt that you haven't paid, it does not magically disappear from your credit. The only things that disappear are matters that were settled by arbitration with the company, bankrupcy and/or debt consolidation. If you owe, you owe. This negative credit will not disappear because time has gone by. You are lucky that one of the major companies has overlooked your debt but if the other credit bureaus have the information, it won't be long before it is on all three. You will need to contact Household Bank or whoever really owns Household and work out a repayment if you want that to disappear from your credit.

Answer 4

Studly is 100% correct. Experian needs to remove it. This company is a pain to deal with. It took me a year get nextcard removed from them from my report. They keep telling me to contact the company. That impossible when they were closed by the OCC.

I had to tell them I aware of the FCRA rules as well. I also reminded them they could be libel for reporting inaccurate information.

Answer 5

Agreed. You agreed to pay the bills when you bought things. Now follow through on your commitment.

Answer 6

pay the bills