I post on the Motley Fool Credit Card board often. I also lurk here, but don't have much to contribute. My area of expertise is fighting CA's who are trying to collect, while this board seems to focus on credit report issues. My question is regarding the resetting of the reporting clock for items that pre-date the 1997 revised FCRA. I feel that the new FCRA rules only apply to items that went negative before the new FCRA went into law in 1997. Otherwise, the item falls under the old rules. A problem with the old rules is that it allowed for any activity on a delinquent debt to reset the 7 year clock. This caused debtors to not want to pay old debts because it would buy them more time on their negitive tradeline on their report. The new FCRA fixed this problem. It clarified when the 7 year clock starts. It now starts when the account first went delinquent. FTC opinion has since reinforced this idea. Because I think the FCRA grandfathers in old tradelines under the old rules, I have always advised people to not make payments on pre-1997 items unless they had to. However, I got into a raging debate with a very well-informed poster on the Motley Fool who argued convincingly that this is a myth. He said from his experience, paying old accounts has not reset the clock. He also mentioned some case law that reinforced this idea. He works for an attorney's office and has access to Lexis, which I do not. I base my advice on a deep distrust of CA's, and my layman's reading of the FCRA as posted on the FTC web site. I simply feel that it is not worth the risk. While I agree that an OC or CA may follow the new clock rules, they don't have to. Further, I think they wait to report the negative item after things have calmed down, and get away with it. I would appreciate any advice on this matter here. Am I wrong? Are reporting parties being forced to follow the new FCRA rules for old items? Thanks a million in advance.
Well, currently, I don't have any items that are being re-reported, because I refuse to pay any items pre-1997. I dispute pre-1997, but as far as deletion w/o settlement? Fuggedaboudit! They are going to fall off very soon anyway. Why risk taking the chance. The truth is, most CA's themselves don't even know the FCRA well enough to know the difference, but believe you me, if they know about it and figure out that you paid a pre-1997 debt that doesn't fall under the new FCRA, they will report you in a second. Just my opinion though. Anyone else out there got any info?
Thanks Cable666, You may be interested in the following thread which speaks to this issue: http://consumers.creditnet.com/stra...stid=193247&highlight=7+year+limit#post193247 Fact is old debt is under a grandfather provision whereby the 7 years obsolescence could be restarted under certain circumstances so one needs to be very careful here. In other words I believe it is your position that is correct. This is not just MHO but also what I see in the written law and FTC opinions. It's also an ongoing debate around here. I will also tell you that you will have MANY who disagree with us from this board so unbeknownst (?) to you, you just opened a can of worms around here lol. An open can I welcome. At least in part because the previous "debate" was never resolved. I really do think we need to exhaust this one for the benefit of the board. This is a technical issue and tech. issues should be beaten to death if necessary until a general consensus is reached. On another thread someone said, "let the debate begin". Here we go again lol
Thanks. The guy I was arguing with on TMF had his facts together, which is more than most people have. But his evidence it all boiled down to examples of people who had old delinquencies aged off, and opinions of the FTC. He was so adamit about the subject that I began to suspect he was a shill for the CA industry. Sort of like that story here earlier today of the single mom who paid off her CA's and decided to become 'Saint C.A.' herself. The story, like hers, implied "Trust Us. We are simply good, hard-working people who would never break or bend the law. We are here to help you in your time of need." Trust a CA? Riiiiight. I feel that it is not worth the risk. In the long run, and many court cases later you may be right and have the supreme court rule that the CA was wrong to re-age the account at 6.5 years. I don't want to be that legal guinea pig. Because there is no clear answer, the best solution is to assume the worst and don't mess with it. To go slighty off-track here concerning the subject of spin control. It boils my blood when a scummy industry lies and says outragous things to justify themselves and their tactics. I don't think a whole lot of CA's. I also don't think a whole lot of bounty-hunters eithers. A&E had a program looking at the bounty hunter industry. Those are those guys that go after people who skip bail. The industry spokesman was interviewed for the program. On the interview he acted insulted by evidence that the industry was full out out-of-control and violent "cowboys". He justified what they do with this line: "If it wasn't for us, pedofiles (sp?) and child molesters would be out on the street attacking your children." What a strange thing to say. My reasoning says, if it wasn't for you the bail bondsman, that child-molester you claim to be protecting us from would never have gotten out in the first place and would be sitting in a jail cell where he should have been all along.
Ahhhh...so, only the RICH and WELL-to-DO pedophiles and child molesters would be out on the streets, and the poor, wretched, and out of work ones would be sitting in jail where they should have been all along. We could always abolish bonding out all together and presume guilt unless and until proving innocence. -Peace, Dave
Re Reset Though the following opinion letter deals specifically with a charge off issue, it appears that the answer to question #3 (on document) includes a set commencement calculation for any pre 1997 info on added to your file... http://www.ftc.gov/os/statutes/fcra/amason.htm
Re the above I think I have realized the issue being tested is one of changing status on on this pre 1997 tradeline, so perhaps the above letter does not afford peice of mind that I had envisioned. Los Ciento
The MF boards are now paid subscription to post, but I think you can lurk for free. Try this link out. This starts the thread about this subject. The poster I was arguing with, Squawk1200, was able to pull some legal cases on this subject, which I can not verify (but I assume they are real). http://boards.fool.com/Message.asp?mid=16779321 His point is that CRAs have legal obligations that they follow to make sure the information they report is correct. I think that is a naive presumption, as many on this board can attest to. The CRA's use the GIGO method of data reporting information provided by subscribers. [GIGO = Garbage In - Garbage Out] Tell me what you think. Cheers
This whol pre 1997 thing is a mystery to me. Maybe i'm lucky or i don't know, but i have 3 items that are Pre-1997 and the reset clock hasn't happened to me. Recently i got a letter back from a Major OC and they confirmed my dispute which was the DOLA was wrong. They had me listed ad DOLA 12/96 but in their own words it's the delinq that led to the charge off(Which is what i've always read and disputed) my dola was changed to 3/96 and I threaten the CA for reporting the 12/96. The CA delelted the account and of course OC updated their records. The two other OC have updated per the delq that led to the charge off, in the other 2 cases i reduced my months atleast 4-6 months, which pushes me closer to falling off early next year. Do i miss something here? My understanding is that.
You know I completely disagree with you on this one Butch. I'm going to call the FTC today, and I will post the results whether I am right or wrong.
Cable666, Squawk1200 used to post on creditnet. I've had an exchange or 2 with him on the fool and, I don't think he is connected with the debt collection business. He's posted about how he learned about the FDCPA was while in law school, his ex defauled on a cc account she was supposed to pay,etc. He did claim to have sued and won some money against a ca and has advised other posters about a course of action against ca's.
I know you do ~ There's no need to call FTC because it has already been reduced to FTC Staff opinion. But by all means do call if you have the time. I did in fact send them an email on it but it'll be 2007 before I get replied to lol. Re: Backspaces post, I do think that most CA's will apply the new formula to ALL debt regardless of their DLA. It just makes everything easier. They are afterall notoreously lazy, don't forget. But the fact seems to remain; they COULD adjust the DLA if they wanted to. I'll find that opinion for ya.
DISREGARD that post. I was thinkin of this alleged 30 day time limit, an ot issue. By all means call the FTC LKH.
From the Motley Fool Board. Squaks observations. It is the accepted conventional wisdom that, for charge-offs reported prior to mid-1997, any payment will "reset" the seven year clock for CRA reporting. This has been an issue I've been interested in for a while, and I have communicated with many people on the interenet who have paid pre-1997 charge offs and have not had the clock "reset." I concluded from those reports that the CRAs are not distinguishing between pre-1997 and post-1997 chare-offs for this purpose. I assumed, though, that this was for their administrative convenience, and that the conventional wisdom was legally correct. I have, in fact, repeated the conventional wisdom on here myself. Having thought further about it, I am now convinced that the conventional wisdom is wrong, and that paying off a pre mid-1997 charge off cannot "reset" the seven year clock. Here's why: The confusion stems from section 605(c) of the Fair Credit Reporting Act, as amended in 1996. That section reads: (c) Running of reporting period. (1) In general. The 7-year period referred to in paragraphs (4) and (6) ** of subsection (a) 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 180-day 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. (2) Effective date. Paragraph (1) shall apply only to items of information added to the file of a consumer on or after the date that is 455 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996. Paragraph (2) is where the mid-1997 date comes from. Let's assume an item on a credit report that first went delinquent in May 1995, and was charged off in May 1996, and reported as charged off that same month. Under the old version of the law, the seven years runs from the May 1996 reporting date. Also under the old law, if a payment was subsequenty made and reported, the seven year clock would be "reset" to the new, re-reported date. Now, imagine that the debtor pays off the charge off today. Two things can happen. On the one hand, the creditor could not re-report it. In that scenario, the 7 year clock would remain set from May 1996 (put aside the possibility of disputing the lack of reroprting by the debtor). On the other hand, the creditor could re-report it. But, if it did so, the item would now become "information added to the file" after the effective date of the new law, which would mean that the clock would be reset BACKWARDS (pursuant to paragraph (1)) to begin in November 1995 (180 days after the first delinquency that led to the charge-off). I've run this analysis by some colleagues (lawyers, but not lawyers who practice in this area), who agree with it. If anyone can explain why my reasoning is wrong, I'd love to hear it.
