FMS - Collection Agency

Discussion in 'Credit Talk' started by $wealth$, Jun 24, 2002.

  1. $wealth$

    $wealth$ Well-Known Member

    Has anyone had experience with them? I have one final charge-off account and they are offering me a settlement @ 50%. I tried to negotiate for a deletion, but no luck. Is it possible to get a deletion for a settlement? If so, how.

    On a different topic, I plan to at least get a paid letter from them that I will use for my mortgage, but not send to the credit bureau, because this will start the 7 year clock all over again. This particular item is due to drop off in 2004. Would of course like to get it removed before them, but once the CRA finds that a payment was made, they will just start that clock all over again.

    Or....would my score improve to have this item marked as settled for 7 years, or should I just leave it as an unpaid charge-off and have it drop off in two. Which is better. I'm so confused.
     
  2. LKH

    LKH Well-Known Member

    Paying on a charge off will NOT restart the 7 year clock for reporting.
     
  3. SCMomof5

    SCMomof5 Well-Known Member

    FOLKS!!>.......

    Please remember that the law has changed. The law states that the 7 year clock starts at the "First date of delinquency leading to the charge off or collection, foreclosure, " etc...

    Paying a collection acct does not reage it any longer.

    The only thing that the clock is still based on payment dates are public records.
     
  4. $wealth$

    $wealth$ Well-Known Member

    OK, That's good to know...regarding the payment not restarting the 7 year clock. For my own records, where is this change sited in the FCRA?

    Now, will having this account reported as a settled charged-off account oppose to having reported as a unpaid charged-off account do anything for my score?

    Thanks for your responses
     
  5. $wealth$

    $wealth$ Well-Known Member

    bump
     
  6. LKH

    LKH Well-Known Member

    Below is an FTC staff opinion letter on this subject. Also, in the eyes of the scoring models, a paid chargeoff is no better than an unpaid chargeoff, and your score most likely will not change.


    February 15, 2000

    Ms. Alaina K. Amason
    14155 Shire Oak
    San Antonio, TX 78247

    Dear Ms. Amason:

    This responds to your letter concerning the time limitations imposed by the Fair Credit Reporting Act ("FCRA") on the reporting of chargeoff accounts by a consumer reporting agency ("CRA," usually a credit bureau). We list your inquiries on this topic below in italics, with our replies immediately following each item.

    1. What reporting limits does the FCRA provide with respect to chargeoffs, and how long have they been in effect?

    Section 605(a)(4), which has been in effect since the FCRA became effective in April 1971, has always prohibited CRAs from reporting chargeoffs that are more than seven years old.(1) Section 623(a)(5), which became law in September 1997, requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(c)(1) provides that the seven year period begins 180 days from that date. Both provisions were part of the major revision to the FCRA that were enacted in 1996.(2)

    2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or (C) the consumer disputes the account with a CRA? Does it matter whether the 7-year period has expired when any of these events occurs?

    No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff.

    3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do chargeoff accounts now have different obsolescence periods depending on when the chargeoff occurred?

    Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a chargeoff reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605(c)(1). On the other hand, a chargeoff reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in one of the enclosed letters (Kosmerl, 06/04/99). If a credit account was reported as a chargeoff before that date, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.(3)

    The opinions set forth in this informal staff letter are not binding on the Commission.

    Sincerely yours,

    Clarke W. Brinckerhoff
     
  7. $wealth$

    $wealth$ Well-Known Member

    Thanks LKH,

    Given the provided information, I decided to just let the item stay on my credit file as reported and dispute it occassionally in hopes of a full deletion. I will not provide them any information to validate that entry one way or the other. Worst case, it will become obsolete in two years.

    Regarding the settlement I already made, I'll just use that paperwork to wrap up my mortgage conditions.

    Thanks again for all the helpful info.
     
  8. cinderella

    cinderella Well-Known Member

    You should consider a sending a cease and desit to FMS. They are HORRIBLE!!!!!!

    I made an agreement with them, nothing signed, and renigged because they would not provide me a letter for deletion. That was it for these guys. They just went ballistic, I must have been put on their **destroy list** because FMS hounded me relentlessy. I can't tell you in words the harassment this company did. THey would call early am, weekends were the best time for them to call, right at 7:45 am. THen, they would threaten the heck out of me.

    If an anwering machine picked up, they would never leave a message, but call relentlessly. I swear these guys called me at least 5 times a day. I would ask them "haven't you had your one daily call yet?'' They would claim it was a "mistake."

    Out of all CA's I have dealt with, this one seems to take delight in harassing you, I think it made them feel all tingly inside when they would wake me up every Saturday morning.
     

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