Re-aging debt is when a debt’s status changes on credit reports to make it appear as a newer debt. It is illegal for debt collectors to re-age credit accounts.
Re-aging is a very serious violation of the Fair Credit Reporting Act. Re-aging credit accounts causes older negative accounts to look more recent which can ruin your credit score.
Do not ignore any evidence of account re-aging.
Both the original creditor or a debt collector cannot re-age a negative account. No matter how many times a delinquent account is transferred or sold from one debt collector to another, the date of first delinquency should not change. The DOFD (date of first delinquency) determines how long a negative account can remain on your credit reports. The “DOFD” is the date an account became 30 days late and no other payments were made.
A negative credit item, such as a charge-off can remain on your credit report for 7 years from the date of first delinquency. Any collection agency that may end up with the charged-off account must comply with that same date.
Section 623(5)(A) says: “In general. A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account, which shall be the month and year of the commencement of the delinquency on the account that immediately preceded the action.”
This means that if a debt collector reports a date of first delinquency to the credit bureaus and the original creditor previously reported it, the dates must be the same date of first delinquency. Any different date constitutes illegal re-aging.
A debt collector re-aging an account can cause serious damage to your credit files. Re-aging would allow a collection account to remain on your credit reports in-perpetuity. Take the following steps if you believe you are a victim of re-aging.
Step One
Request documentation from the credit reporting agencies if you believe an account has been re-aged. This will not be a dispute letter. It’s a letter requesting your consumer disclosure file which contains a comprehensive history of your credit information under FCRA Section 609(a)(1). This section says “…every consumer reporting agency shall clearly and accurately disclose to the consumer ALL information in the consumer’s file at the time of the request.”
This means ALL information in a consumer’s file must be disclosed to the consumer which would include the first date of delinquency. Your consumer disclosure file is not the same as your credit report. You must “clearly” state the information you are requesting, for instance:
I am inquiring about [account name] and [account number]. Please provide my consumer disclosure file under FCRA Section 609(a)(1) and provide me with the date of first delinquency, the FCRA compliance date and the name of the party who reported the date of first delinquency.
[Note: Be sure to accompany your letter with the required processing fee, which is currently $12.00.].
Step Two
Once you receive confirmation of the date of first delinquency (DOFD) check the dates of the original creditor (charged-off account) and the collection account associated with that debt. The collection account must match the DOFD of the original creditor. If the dates do not match, and the collection agency shows a more recent date, re-aging has occurred.
Step Three
Dispute the collection account. Example: I am disputing the [collection agency name] and [account number]. The collection agency has re-aged this account according to the original creditor’s date of first delinquency. Please delete this account immediately. (You may include in the letter supporting documentation if you received the correct DOFD from the credit reporting agencies in Step 1).
[Note: Never ask for a correction of a negative account, your goal is to get any and all negative information deleted].
Step Four
Remember, if you have a collection account on your credit reports and it has been a while since the collection agency has contacted you about the debt, disputing the debt may renew the collection agencies’ efforts to collect the debt. Perhaps this is not a concern however, if it is a concern, check your state’s statute of limitations on the debt. If the statute of limitations has expired, you cannot be legally sued for the debt.
Step Five
Report re-aging to the Federal Trade Commission (FTC) as this is a serious offense under the FCRA. In 2004, the Federal Trade Commission fined NCO Group $1.5 million for account re-aging. You should also report re-aging to your State’s Attorney General. In addition to making a big stink and creating a paper-trail in case you have to file a lawsuit, reporting these violations alerts the proper regulating authorities and causes them to act. They will not know about the illegal practices of debt collectors unless you inform them. Your tax dollars go into running these agencies so utilize them.
Step Six
Report the collection agency and the credit bureau to Consumer Financial Protection Bureau (CFPB). But make sure you have first filed a dispute with the credit bureau before making a complaint. According to the CFPB there are important consumer rights guaranteed by federal consumer financial law that may be best preserved by first going through the credit reporting company’s complaint process. Once that process is complete, if you are not satisfied with the resolution or if the credit bureau does not respond, the CFPB is available to assist.
Step Seven
Take legal action if your dispute efforts have not resolved the matter. You have several alternatives in taking legal action. You may be able to sue the collection agency for violating the FDCPA and the FCRA. You can definitely sue the credit reporting agency for violating the FCRA. Should you wish to hire an attorney, www.naca.net has many referrals to consumer attorneys who handle FCRA and FDCPA violations.
