Question: Can a delinquent account be sold multiple times to different debt collectors? If so, how long can that negative account be reported on a credit report? I have a delinquent account that has been on my credit report for seven years and it looks like another debt collector recently purchased the account and now the item is scheduled to remain on my credit report for another five years.
Is this practice legit? Also, that particular debt collector, has not contacted me via mail ,but has attempted to contact me via phone which I refuse to accept their calls, because I want something in writing form them.
Answer: An unpaid collection account can be sold and re-purchased over and over again by junk debt buyers. Often, a junk debt buyer will purchase a collection account, attempt collection for a few months, then re-sale the account to a new junk debt buyer. This can occur repeatedly until the debt is paid.
However, the 7-year reporting period wherein a delinquent account can remain on your credit reports should never change; no matter how many times the debt is re-sold among junk debt buyers. If a debt collector has Re-Aged an account, they have engaged in a serious illegal act which a consumer has the basis to bring about a lawsuit.
The Fair Credit Reporting Act requires a creditor that reports charged-off accounts to the credit bureaus to notify the credit bureau within 90 days of reporting the account, the MONTH and YEAR of the commencement of the delinquent account which immediately preceded the account being charged-off. The 7-year reporting period begins 180 days from that date. This date is the Compliance/Obsolescence Date and CANNOT BE CHANGED by the original creditor or any debt collector which purchases the delinquent account.
In other words, not even the sale or transfer of a charged off account by an original creditor can change the allowable period a credit bureau can report a delinquent account; therefore, a debt collector surely cannot change the 7-year reporting period.(It is really 7 years plus 180 days.)
Make sure you are not confusing the date of last activity on the account with any updated dates that are showing on your credit reports. But if you believe a debt collector changed the FRCA Compliance Date read more about Re-aging an account and what to do if an account on your credit report has been re-aged.
Illegally re-aging delinquent accounts is so serious that in 2004, the Federal Trade Commission levied a $1.5 million fine against a large debt collector, NCO Group, to settle charges that it violated the Fair Credit Reporting Act by reporting inaccurate dates to the credit bureaus causing accounts to be re-aged and remain longer on consumer credit reports.
NCO was fined because it violated Section 623(a)(5) of the FCRA. The FTC specifically said “…any entity that reports information to credit bureaus about a delinquent consumer account that has been placed for collection or written off must report the actual month and year the account first became delinquent.
In turn, this date is used by the credit bureaus to measure the maximum seven-year reporting period the FCRA mandates. The provision helps ensure that outdated debts – debts that are beyond this seven-year reporting period – do not appear on a consumer’s credit report. Violations of this provision of the FCRA are subject to civil penalties of $2,500 per violation.”
As far as the debt collector not writing you, this is typical of junk debt buyers who want to deal with you via telephone only to try and intimidate you into making payment. Typically this category of debt collectors NEVER put anything in writing. They are in it to make a quick buck with as little effort as possible.
Junk debt buyers almost never have proof you owe the debt and often ignore debt validation requests. While you are working on the possible re-aging issue, you should send a certified, return receipt letter to the debt collector requesting they contact you via U.S. Mail only as telephone calls are inconvenient for you to accept.