I had an account with FNB of Omaha that was charged off and went to a judgement. I am in the process of shopping for a home and was told to settle the judgment. In my settlement offer to Proffesional Finance (the ca for this account) their repersentative signed of that the judgement would be reported satisfied, and any negative information pertaining to this account(charge off or late payment) would be deleted. Today the OC, FNB stated by phone that Professional Finance had no authority to offer that, and there was no way to remove the negative listing from my credit reports. Since the judgement was settled for less, my reports would show settled for less and would still show a balance. Please help! tix
As a followup FNB stated that since the settlement date was 6/02 the date of last activity (8/96) would be updated to 6/02. Does this mean this account will stay on the reports for another 7 years? tix
I would advise the oc that paying on a charged off account does NOT restart the 7 year reporting period. Below is an FTC letter on this. Tell them if they do reage it, you will immediately file suit and their little game will become quite a serious matter. 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
LKH Thanks for the FTC Letter. What about any recourse I might have in reguards to the CA stating that upon payment, the OC will remove all negative items from the report? Someone told me that the law of agency would apply. Any thoughts? Thanks! tix
Was the OC or the CA responsible for the derogatory listing in your report? If it was the OC, then they are entirely correct. You got the deletion "settlement" from the CA, not the OC. The CA has no right to delete information that another "information provider" (the OC) has put on your report. Always make sure you negotiate with the appropriate party. -Peace, Dave
To lie is one thing, to put that lie in writing is another. Isn't it? I guess the worst thing is it will come off next year. tix
I suppose you could sue for deceptive collection practices...but even with the document it would be difficult to prove because they could claim that they were talking about the listing they had on your report (even if there was no such listing by the CA) NOT the OC listing (they would claim it was a mistake, and they thought you were referring to THEIR listing which they do have the power to remove), and therefore probably be a waste of time filing suit. (just my opinion never tried so I don't know) -Peace, Dave
