On Wednesday, July 1, 2009 the Federal Register reported:
Federal Trade Commission
16 CFR Part 660
Procedures To Enhance the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies Under Section 312 of the Fair and Accurate Credit Transactions Act; Final Rule; Guidelines for Furnishers of Information to Consumer Reporting Agencies; Proposed Rule.
This act speaks to the way information is furnished to Credit Reporting Agencies. It is a lot of information and the link has been provided below. Everyone should take some time to at least read the pertinent information regarding the re-aging of accounts. The definition of this term is: Re-aging of an account occurs when an account is sold or transferred to a third party that resets the account opening date to the date the account was received by the third party. Re-aged accounts may result in adverse credit information staying on a consumer’s credit report longer than what is permissible by the FCRA, which for accounts that are placed in collection or charged off is typically no more than seven years. See section 605 of the FCRA.
Example:
You have an account that went delinquent in April 2003. According to the FCRA, an account can only stay on your credit report for 7 years. So technically, that account should be removed off the credit report in April 2010. Your creditor sells your account or outsources your account to a collection agency in May 2008. The new owner or collection agency now reports this account to the credit reporting agency, but instead of using the April 2003 date as the delinquent date they use the date they bought or received the account (May 2008). Now the accounts new date to be removed off the credit report is May 2015. This is called re-aging.
Your FICO score is affected by this reporting approx 20-30 points, negatively. This is not permitted per the Federal Trade Commission, but is practiced daily by some agencies.
You are entitled to 1 free credit report per year from each credit reporting agencies. Go to http://www.annualcreditreport.com/ and get your reports. Make sure all the information provided on the reports are accurate.
Please post any questions you may have.
http://www.ftc.gov/os/2009/07/R611017factafrn.pdf
Thursday, July 9, 2009
Wednesday, July 8, 2009
What is the "Statute of Limitations" and Do I Have To Pay This Old Bill?
In my experience as a bill collector, most people think the "statute of limitations' is 7 years and mean you no longer owe the bill. That is not true. The "statute of imitations" regarding a debt varies, depending on the state that you live in. It could range from 3-15 years, depending on the state you live in. Check your state here: http://www.fair-debt-collection.com/statue-limitations.html.
The statute of limitations doesn't mean you no longer owe the debt. The statute of limitations limits the time in which a creditor can file suit/take legal action against a debtor. This limit starts from the date of last activity and ends depending on the state that you live in. A creditor can still file a suit in court, but you can have it dismissed based on expired statute of limitation. You must appear in court to have it dismissed.
The statute of limitations does not mean you no longer owe the debt. It is still collectible in MOST states. Please check your state to see laws regarding this, http://www.fair-debt-collection.com/statue-limitations.html. The statute of limitations does not prohibit your account from being sent to a collection agency or from being sold. It merely limits what a creditor can do to collect the debt. The creditor/collection agency can continue to call and send letters regarding the debt, unless you send them a "cease and desist" letter. They cannot threaten to take any legal action, once the statute of limitation has expired.
The confusion that most people have is the 7 year thing. The credit bureaus will keep an account on your credit bureau for 7 years. Even if the statute of limitations has expired, the account remain on the credit bureau for 7 years and 10 years if it is a judgment. If the statute of limitations for your state is 15 years, the account will still only remain on the credit bureau for 7 years and 10 years for judgments. See the Fair Credit Reporting Act.
Why should I pay an account that is out of statute? If the account is still being reported on the credit bureau, it is still effecting your FICO score. Keep in mind that in MOST states if you make a payment, it will reinstate the statute of limitations. Meaning the clock starts over again. So, if you decide to pay on a debt where the statute of limitations has expired, it is no longer expired. HINT: If you are not going to "settle or pay in full" you are hurting yourself.
If the account is out of statute and no longer on the credit report, should I pay? That is totally up to you. There is absolutely no legal reason you have to pay and it is not effecting you in any way creditwise. The only reason I can think of, would be morally. So you decide.
Make sure you check your states laws, http://www.fair-debt-collection.com/statue-limitations.html. They vary from state to state. And the law varies depending on the type of account owed. Be informed. The bad collectors are preying on your ignorance. If you are being threatened in any way, contact the Federal Trade Commission, http://www.ftc.gov/.
Please post any questions you may have.
The statute of limitations doesn't mean you no longer owe the debt. The statute of limitations limits the time in which a creditor can file suit/take legal action against a debtor. This limit starts from the date of last activity and ends depending on the state that you live in. A creditor can still file a suit in court, but you can have it dismissed based on expired statute of limitation. You must appear in court to have it dismissed.
The statute of limitations does not mean you no longer owe the debt. It is still collectible in MOST states. Please check your state to see laws regarding this, http://www.fair-debt-collection.com/statue-limitations.html. The statute of limitations does not prohibit your account from being sent to a collection agency or from being sold. It merely limits what a creditor can do to collect the debt. The creditor/collection agency can continue to call and send letters regarding the debt, unless you send them a "cease and desist" letter. They cannot threaten to take any legal action, once the statute of limitation has expired.
The confusion that most people have is the 7 year thing. The credit bureaus will keep an account on your credit bureau for 7 years. Even if the statute of limitations has expired, the account remain on the credit bureau for 7 years and 10 years if it is a judgment. If the statute of limitations for your state is 15 years, the account will still only remain on the credit bureau for 7 years and 10 years for judgments. See the Fair Credit Reporting Act.
Why should I pay an account that is out of statute? If the account is still being reported on the credit bureau, it is still effecting your FICO score. Keep in mind that in MOST states if you make a payment, it will reinstate the statute of limitations. Meaning the clock starts over again. So, if you decide to pay on a debt where the statute of limitations has expired, it is no longer expired. HINT: If you are not going to "settle or pay in full" you are hurting yourself.
If the account is out of statute and no longer on the credit report, should I pay? That is totally up to you. There is absolutely no legal reason you have to pay and it is not effecting you in any way creditwise. The only reason I can think of, would be morally. So you decide.
Make sure you check your states laws, http://www.fair-debt-collection.com/statue-limitations.html. They vary from state to state. And the law varies depending on the type of account owed. Be informed. The bad collectors are preying on your ignorance. If you are being threatened in any way, contact the Federal Trade Commission, http://www.ftc.gov/.
Please post any questions you may have.
Tuesday, July 7, 2009
Stop Harassing Calls From Third Party Debt Collectors
The quickest way to stop a Third Party Bill Collector from calling and harassing you is to send the agency a "cease and desist" letter. That simply means, you send them a letter telling them they are not allowed to call you or write you. They must immediatly cease contact. This way you are in control of when you talk to them. You can call them but they cannot call you.
The best way to send the "ceast and desist" order is via fax, certified mail, or any means that will give you proof that it was sent. Also, try to get a managers name and address the letter to that person. Make sure the letter is dated and very specific in what you want. If you only want the calls to stop then state that, or if you want both mail and calls to stop then state that. Keep your proof of service for your records.
If the agency violates your "cease and desist" order, then they can be fined by the Federal Trade Commission. Their website is http://www.ftc.gov/. They govern Third Party Collection Agencies. You can also file a complaint with the Attorney Generals Office for your state.
You may be able to file a civil suit against the agency. There are several attorneys that specialize in FDCPA violations. Example: http://www.krohnandmoss.com/.
Please post any questions you may have.
The best way to send the "ceast and desist" order is via fax, certified mail, or any means that will give you proof that it was sent. Also, try to get a managers name and address the letter to that person. Make sure the letter is dated and very specific in what you want. If you only want the calls to stop then state that, or if you want both mail and calls to stop then state that. Keep your proof of service for your records.
If the agency violates your "cease and desist" order, then they can be fined by the Federal Trade Commission. Their website is http://www.ftc.gov/. They govern Third Party Collection Agencies. You can also file a complaint with the Attorney Generals Office for your state.
You may be able to file a civil suit against the agency. There are several attorneys that specialize in FDCPA violations. Example: http://www.krohnandmoss.com/.
Please post any questions you may have.
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