Hello All, Here is a link to a document that is intended for collection agencies to follow as they deal with the Date of last delinquency calculation. This is published by the American Collectors Assoc. http://www.collector.com/template.c...emplate=acaol/resources/fastfax/fcra/1505.pdf It is worth your time to read, re-read and understand this. Let me say that if you were to use this with an agency.... Have a great day!
Sorry, only ACA members are able to view this document. If you are an ACA member but have not logged in, click here. For information on becoming a member of ACA, click here. That is what you get when you click on the link you provided.
ok.. I will post it here.. Date of Delinquency: Credit Reporting Requirements of Creditors Under the FCRA. As you are probably aware, in 1996 the Fair Credit Reporting Act (FCRA), which governs the activities surrounding the use of credit reports (consumer reports) was substantially amended. The driving force behind the changes was Congressâ??s desire to relieve consumersâ?? of the eternal burden of having negative or erroneous credit information reflected on their report. To accomplish this objective, Congress placed into the Act new duties, responsibilities, and liabilities not only on consumer reporting agencies (CRA) and users of consumer reports, but also on those furnishing data to CRAâ??s. In addition to being obligated to furnish correct and accurate information; reporting closure of accounts; and notifying the consumer reporting agency of any disputes received by the consumer; the Act also mandates that data furnishersâ?? provide the CRA with the correct â??date of delinquency.â? Congress intended for there to be one consistent date used to determine the period of time that negative information may remain on the consumerâ??s consumer report. Unfortunately, the language of the statute concerning the date delinquency is vague and does not lend itself to easy interpretation. Section 605(a)(4) of the FCRA provides that CRAâ??s may not provide information to users of consumer reports, if such reports contain â??[a]ccounts placed for collection or charged to profit and loss which antedate the report by more than seven years.â? Additionally, § 605(c)(1) states that, â??the 7-year period . . . shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.â? Finally, § 623(a)(5) requires that, â??a person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the month and year of the commencement of the delinquency that immediately preceded the action.â? Thus, the FCRA places an affirmative duty upon CRAâ??s to remove from the consumer reports information that is more then 7-years plus 180 days past the â??date of delinquency.â? The Act also places an affirmative duty on data furnisherâ??s to provide the â??date of delinquencyâ? within 90 days after originally reporting the information to the CRA. However, CRAâ??s often require the â??date of delinquencyâ? be provided with the initial information. Fastfax From ACAâ??s Fax on Demand Service Page 1 of 3 Last Updated on Oct. 13, 2000 Document 1505 Page 2 of 3 Again, the calculation of the â??date of delinquencyâ? is the month and year that immediately preceded the account being placed for collections (internally or externally), charged to profit or loss, or subjected to similar action. Because this date frequently occurs prior to the day the account is placed with a third party debt collector and in order for the third party debt collector to accurately report the date of delinquency, the creditor must furnish this date to the third party. The third party debt collector has no way to determine the date of delinquency. More importantly, it would be outside the scope of the authorized duties of a collection agency to advise a creditor on the issue. The onus is on the individual creditor. Further complicating things, many CRAâ??s will not accept information from third party debt collectors when the date of delinquency and the date placed with the debt collector occur in the same month or are less than 30 days apart. Thus, in order for the third party debt collector to report the account to the CRA, and to remain in compliance with the law, the creditor must provide to the debt collector, with each account, the accurate date of delinquency to the collection agency. Without this date the third party debt collector is unable report the information. To aid in understanding how the creditor can determine this date, the Federal Trade Commission has formulated some examples. These examples are set out below. Ã?A consumer becomes delinquent on March 15, 1998. The creditor places the account for collection on October 1, 1998. In this case, the delinquency began on March 15, 1998. The date that the creditor places the account for collection has no significance for calculating how long the account can stay on the consumerâ??s credit report. In this case, the date that must be reported to CRAs within 90 days after you first report the collection action is â??March 1998.â? Ã?A consumer falls behind on monthly payments in January 1998, brings the account current in June 1998, pays on time and in full every month through October 1998, and thereafter makes no payments. The creditor charges off the account in December 1999. In this case, the most recent delinquency began when the consumer failed to make the payment due in November 1998. The earlier delinquency is irrelevant. The creditor must report the November 1998 date within 90 days of reporting the charge-off. For example, if the creditor charges off the account in December 1999, and reports this charge-off on December 31, 1999, the creditor must provide the month and year of the delinquency (i.e., â??November 1998â?) within 90 days of December 31, 1999. Ã?A consumerâ??s account becomes delinquent on December 15, 1997. The account is first placed for collection on April 1, 1998. Collection is not successful. The merchant places the account with a second collection agency on June 1, 2003. The date of the delinquency for reporting purposes is â??December 1997.â? Repeatedly placing an account for collection does not change the date that the delinquency began. Ã?A consumerâ??s credit account becomes delinquent on April 15, 1998. The consumer makes partial payments for the next five months but never brings the account current. The merchant places the account for collection in May of 1999. Since the account was never brought current during the period that partial payments were made, the delinquency that immediately preceded the collection commenced in April 1998 when the consumer first became delinquent. These examples reflect the Commissionâ??s interpretation that simply reporting the date of delinquency as the date the account was placed with a third party debt collector, would not accurately reflect the â??date of delinquency.â? Thus, it is imperative that creditorsâ?? establish internal policies to accurately identify the â??date of delinquency.â? Otherwise, not only will the data furnisher be in violation of the law, the CRA may chose not to allow the accounts to be placed on the consumerâ??s consumer report. We realize that the policies described in this letter represent a radical change in prior policies concerning credit reporting on delinquent collection accounts. The reasoning behind these changes is that the laws concerning credit reporting have been radically changed. Please understand that these changes have a dramatic impact not only for creditors, but also for collection agencies and credit bureaus. As always, the American Collectors Association views compliance with all federal, state and local laws as paramount and vitally necessary. ACA members are committed to this goal and to providing the very best in collection services.
