Something about this caught my attention today. At work someone was talking about the logic behind selling debt to collection agencies. The key was "selling". It's probably been discussed here, but logically speaking if a creditor sells a debt to another agency, they loose all rights to that debt. Assigning a debt to an agency is different. So now thinking about this all night, I've come to the conclusion: If I sell you a debt that someone owes me because I can't collect on it, and you some how find a way to get that person to pay, I'm not entitled to any money. If I'm reporting this account and I sell the rights to collect this account to another company, the person that owes me the debt no longer has an obligation with me, they have one with whoever I sold the debt to. Legally speaking, if the person has no further obligation with me, I cannot continue to report information on his credit report. So, I no longer have a legal reason to mark, update, validate or mess with your credit report. I no longer own the debt and there isn't a charge-off anymore because I sold it to another company. Regardless of what I sold it for. I cannot validate a debt that I no longer own. Doesn't this seem logical? Wouldn't there be some kind of legal defense based off this to get the OC's who sell debt to CA's to remove their records from your report based on the fact that you no longer owe them anything? Hey it's a long shot, probably already tried here, but we were bored for a bit today at work and were brain storming. Even spoke with our legal guys about it. It does seem logical, although I'm no master of the FCRA or FDCPA.
The debts are not usually sold like they will have you believe. The collection rate percentage to old debts compared to the tax write off. Well I guess I better stop here and let an experienced creditnetter explain this one!!!! Actually the origanal creditor gives up and the Collection Agency makes $$$ on the old debt, usualy!!! No, I better stop here.
Actually, from what I've read (been here a while) and what I know, debts are sold every day. Mind you they are sold for pennies on the dollar. However, what I'm wondering is even during a transfer of an account, the OC looses the right to collect on this debt. So basically speaking it seems like (unless someone can provide documentation to show otherwise) once an account is transfered/sold, that information can no longer be posted to your reports. I figured it might make a good case, even the legal department couldn't find a reason to dismiss my thought. I'm researching this now. It's interesting. I'm in California. The California Credit Laws are so much nicer than Federal laws.....this is probably one of the only times I can say I love California.
I'm not sure if the arguement makes sense. Just because you don't currently owe someone any money doesn't mean they cant report your previous delinquency on your credit report. They can't report that you owe them a balance, but they can put their listing there. I had a Fleet card charge off. they sold it to another collector. They updated their listings to "charge off $0 balance, Sold to another lender"... I kept disputing the account and on EQ, they changed the listing from r9 to r1 but it still shows the late pays I had from before...I think I just lucked out on that one. Luke
