What do you do when a collector fails to validate a debt, but the item is still listed on your credit report?

Answer 1

Did you send a dispute to the CRA's as soon as the collector received your validation request?

If you requested validation within the first 30 days from their first contact then they must cease all collections until they validate with you, which includes verifying any dispute you made to the CRA's.

If you requested validation outside of the 30 day time period they do not have to cease collections before they validate with you.

If they are reporting incorrectly, i.e. reporting it as past due, that they are a factoring company, etc., etc., and you dispute one or more of the inaccuracies then they must either correct it or delete it. (though it is difficult at times to get the CRA's or the collectors to follow the laws in that respect)

Since I don't know if you had sent the validation request within the 30 day time period, if you sent it by certified mail return receipt or if you disputed the account with the CRA's -
If it has been longer than 30+5 days (the 5 days if for their mailing time) since they received your request for validation, then send a second validation request.

Send it certified mail return receipt. When you get the signed green card back then send a dispute to the CRA's.
If they still fail to validate with you and if they verify the tradeline then you might consider filing complaints with the BBB, FTC, your AG and the collectors AG.

If you haven't read the FDCPA or the FCRA, you should.
You might click on my profile where I have links to those sites listed.

Answer 2

Do what I did. Sign up for pre-paid legal, have them send a letter to the collection agency demanding the removal or you will press charges. You'll hear from them pretty quickly. In the mean time, keep disputing it with the credit bearu and tell them it doesn't belong to you.