Can A Collection Agency Change The Open Date Of An Account On The Credit Report?

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

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.