Wrongful Credit Damage, Identity Theft and Debt Collection Abuse Blog

I’ve been seeing a lot of cases recently where debt collectors and even major banks report debts two, three and four times to a consumer’s credit report.  The consumer disputes it, and one of entries gets corrected, but the other two remain.

When you look at your credit report, keep in mind that collectors, banks or lenders can only report your debt once.  If they’re reporting it more than once and refuse to correct it when you dispute, this is a FCRA violation and you should be seeking legal counsel.

Collection accounts and derogatory items generally are supposed to fall off of your credit report 7 years and six months after the date of first delinquency.  There are slightly different rules for bankruptcy filings and some other exceptions, which you can find at www.ftc.gov.

However, here’s the big BEWARE: when some collection agencies buy an account or have it assigned to them, they CHANGE the date of first delinquency to permit them to continue collecting after the 7.5 years has elapsed.

So, for instance, let’s say Mrs. X has a charge-off account which has a date of first delinquency of January 1, 1995.  As of July 1, 2002, technically the original creditor and any subsequent collector on the account can no longer credit-report it.

Along comes debt collector X.  It (debt collectors never get a “he” or “she” on my blog) buys the account, or gets it assigned, on July 2, 2002.  Oops, the collector notices!  The account is already too old to credit-report.  What to do???

Hey, I’ve got an idea, says the clever (and predictable) collector: I’ll change the date of first delinquency to the date the account was assigned to me!  How clever I am!!!  This way I can continue to collect on the account.  (Some collectors will also change the account number by credit-reporting the account under the collector’s internal tracking number instead of the original creditor’s account number.  This frequently confuses the issue of which accounts are delinquent, and can even result in double-reporting of delinquent accounts.)

Guess what!  THIS IS ILLEGAL!  If you catch a debt collector trying to do this, contact an attorney.  Also, if a collector or a creditor tries to change the date of first delinquency by changing the account number, same approach: see a lawyer and consider filing a lawsuit.  What the collector/creditor is doing is entirely improper.