Who is at fault? (long)

(this only happened on Equifax):
I had a car loan that was paid off around April of 2001. On a CR AFTER it was paid (0 balance and I1 rating), there were 11 late pays with the last one occuring in 6/99. I didn't have a problem with that, as it was true (I had lost my job back then). In May of 2002, I pulled a report and it said that it was paid off and all that, but now it was showing 46 times late and the reported date was 04/02. It also said that the latest delinquencies were 02/02, 09/01 and 07/01--- AFTER THE LOAN WAS PAID IN FULL.
The report I pulled yesterday still shows paid in full and all that, but now it shows 43 times late with a reported date of 07/02. It also shows last delinquencies of 05/02, 12/01 and 10/01. The kicker is that on ALL of these reports, the Date of Last Activity is 02/01.

I am so confused..I called up the OC (a credit union), they told me to fax over my documentation, which I did. Get a call back and after 1 1/2 hours on the phone what I basically got was. "We aren't pulling your report, maybe one of your other creditors is asking for updates", "when the CRAs request it, we send a tape of all the accounts, we wouldn't just send it in after the account was paid off", "I don't know why your status was changed after your loan was paid off, I'm just going by what I see". He even tried to tell me that I was "lucky" that it was only reporting 43 times late, because it could have been worse. I said "you know what, I wouldn't have cared if it showed up worse on my CR back in 2001 BEFORE I paid the loan off, but what rationale is there to 1) keep reporting the account over a year after it was paid off, 2) change the number of delinquencies AFTER the loan was paid off, and 3) show lates as recent as May of 2002".

I got the "well that's what I see here and that's all I can go by". I said well if that is on your tape, then how come Experian stopped reporting this as of 3/2001 right after it was paid. "I don't know, it depends on who asks for the tape. Why don't you call EQ and see why they are requesting your information". I told him "Sir, Eq does not REQUEST consumer information, they report what is SENT to them"

I was ticked at this point because all I got from him was either "I don't know" or something else that was very stupid. I guess he figured I was dumb enough to take his word for things. For instance he said "well look at your report, you have inquiries on there, maybe one of those companies requested an update of your account with us". I had to count to 10 on that one (like you do with your kids). Besides that fact that no company can do that, all my inquiries were PRMs or ARs that had NOTHING to do with a car or loan -- and these inquiries were from the report that was RIGHT. Dumb A$$

After getting nowhere with him, I called EQ. The lady said, "I don't see how these lates are on here when the account is paid off. I can take these notations off, but I can't change the amount of times late without doing an investigation" I asked her how they get information, she said when the creditor SENDS it to them. I asked do they ever go and GET info, she said no, unless there is a dispute. Just as I thought.

I told her to leave the notations on there for now. I figure if someone sees how stupid the tradeline looks, it would be discounted somewhat. I'm only doing this in preparation for getting another car next month, and I'm going through a CU, so I can do more explaining to them. It does show up as Pays as Agreed (R1), so it's not hurting me scorewise.

I just wanted to know who was at fault here? I can't see any reason for an account to be changed AFTER it was paid off. So who do you think was at fault? I'm stuck between the proverbial "rock and a hard place" because EQ can't do anything without disputing the account and the OC already told me that they would make it worse when they filled out the dispute form.

Any thoughts?