Reporting Collections On A Min

Discussion in 'Credit Talk' started by Cadillac408, Oct 19, 2000.

  1. Cadillac408

    Cadillac408 Well-Known Member


    I'm posting this question for a friend of mine. Maybe someone can shed some light on the matter. Here's the scenerio:

    Girl ~age 16 obtains a checking account with Wells Fargo and gets in trouble with writing bad checks (not intentional, just didn't have good financial knowledge at the time). Wells Fargo closes the account that is overdrawn by some odd dollars. They never report her to Chexsystems nor do they try to attemp to collect on the overdrawl amount (around <$100). We've come to the conclusion that it's due to the fact that she was a minor and by law, minors can't be held legally responsible. It's not her fault that Wells Fargo opened up a checking account for her, disregarding her age at the time.

    On to the dilemma....She starts to apply for credit a soon as she turns 18 and finds out that she has a collection account for some check that she wrote to Wal-Mart when she was 17(total collection amount of $140). This is the only negative item on her report. We know this collections exists on at least 1 maybe 2 of the CRA's but not on Transunion. So my question is, can she be held liable by the collection agency? What are the laws regarding this? She has contacted the agency one time only to verify this debt. I told her that she should try to dispute the item through the CRA's first. If it comes back verified, then she needs to take further action.

    On a personal note, I got out of a Mervyn's charge off in 93 due to the fact that 1. I was 15 when I got the card (jokingly applied and was approved!), 2. I never used the account AT ALL! and 3. A relative used the account w/o my knowledge or approval (they sent copies of receipts that had a signature other than mine on it. Once I told Mervyn's that I was 15 at the time the card was issued, they were quick to send out paper work (afidavid of forgery) to get this resolved. It was removed from my report immediately!

    Any comments?

    Thanks and happy credit building!
  2. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Itâ??s Not Collectable, Unlessâ?¦

    Sounds like this issue is non-collectable as the young lady is certainly judgment proof, in that the collection agent would be stupid (Iâ??m talking sub-moronic here) to even attempt litigating. But litigation aside for a moment, if the parents approved the checking account then a cause â??couldâ? exist against them, not the daughter. Hereâ??s what I suggestâ?¦

    As youâ??ve indicated first dispute with the CRA(s). If the account comes back confirmed it may be as a result of a couple of possibilities: 1) the collection agent is/was unaware of her age; 2) the account was batch referred by Wal-Mart (most likely the case); or 3) the account was misrouted by the agency track system.

    This will very likely come back verified by the collection agent, because they have no way of establishing age when an account is referred (itâ??s assumed the debtor is of legal age). Have the girl compose a letter to the agent indicating the facts and demanding removal, like yesterday (send it via certified mail). If the agent persists or if a collector contacts the young lady, document EVERYTHING stated or threatened.

    After this (if the account is pursued) send me a personal email, remind me of the issues, and Iâ??ll direct you where to go from here (Pro Bono, of course).

    Keep The Faith,
    Anthony Villaseñor
  3. MikeG

    MikeG Well-Known Member

    Is she really ready for credit


    Just a quick thought. If she had problems when she was 17 and now is only 18. Is she really ready for more or new credit. I dont know. I guess it depends upon the person, but we all can verify that having credit at such a young age put some of us where we are now.

    I hope she gets everything cleared up regardless.

    Mike G.
  4. Cadillac408

    Cadillac408 Well-Known Member

    She's established already.....

    Hi Mike G.

    Thanks for your insite.
    FYI...She is now 20 (turning 21 soon) and has a job making $32k/yr. I guess I should of clarified that. She started establishing credit exactly 1 year ago by obtaining Aria ($800), Cap1 ($500), and Macy's (just recently raised from $100-300). She also has an auto loan that she got this year and has paid perfectly on. Having this collection on her credit is damaging! It is the only negative. Everything else is spotless. She is very responsible with her bills and has been listening to me about my credit problems. We call ourselves "Part-time wanna be credit analysts"! It's like a new hobbie.
  5. Cadillac408

    Cadillac408 Well-Known Member

    No parents involved.....

    FYI.......she just waltzed into Wells Fargo and opened up an account. They paid no attention to how old she was. Her parents did not authorize this no did they do any co-signing.
  6. alison

    alison Guest

    RE: Reporting Collections On A

    When I was 16, I was able to obtain a checking account. Back then, 18 years ago, a high school id was all a person needed to open a checking account. No parental signature was required.

    Unfortunately, this may stay on her file for the 7 year drawl. She needs to pay the debts. This will not clear her name on her credit file but will with scan and telecheck.

    GEORGE Well-Known Member

    RE: Reporting Collections On A

    PAY THE >$100.00.
  8. Irish Diva

    Irish Diva Guest

    RE: Reporting Collections On A

    Actually - not to sound like a grumpy old bear here, but the fact remains she wrote checks that did not have the money to back them up. The most important issue is to pay them back, first, and then worry about the collection report. I agree WF had no business opening up an account for someone that age, but she needs to take responsibility for what happened. Hopefully she's learned a lesson from this - they take people to court over bad checks. In AZ they arrest them - Sheriff Joe Arpio shows up to clap them in chains!
  9. dave

    dave Well-Known Member

    RE: Reporting Collections On A

    This is a question governed by state law and best discussed with a lawyer. In general, minors may disaffirm their contracts when they are minors or even after they reach adulthood but there may a time limit for doing this. Also, the minor may do things as an adult that are inconsistent with disaffirming. For example, refinancing or continuing to make payments. The important thing is that if a minor does not disaffirm, the debt is valid. Certain types of debts incurred by minors may not be voidable These involve provisions for necessities of life such as food, clothing, shelter, etc. So the answer may depend on factual questions such as whether your friend was buying food or records.

    The CRAs are not allowed to report a debt that they know is invalid. Whether this one is valid or not depends on the facts and some of the principles noted above may come into play.

    See an attorney to be sure how this works where you live. This subject is too complex for an adequate answer on a message board. Hope this helps.
  10. BOB

    BOB Guest

    RE: Reporting Collections On A

    Here's another way to approach this and get it cleared up. Have her contact the collection agency and explain to them that she was a minor when this happened. Offer to pay it in full if they will remove it from her reports. Get all this in writing before you pay it. In most all cases they will agree to do this because it's uncollectable otherwise. It's only $100 so it would be worth it to pay it off. They may not be able to collect it, but they can post it to her report for 7 years. Remember get everything in writing before paying for anything.

Share This Page