Exploring the Debt Collection Industry

August 30, 2006

Credit Bureau Reporting:

Filed under: Credit Bureau — budhibbs @ 2:39 pm

The federal law that governs placement of information on your credit files is called the Fair Credit Reporting Act (FCRA). It is used mainly to control the flow of information by the credit bureaus. When dealing with the credit bureaus do NOT ever be mistaken that they make their money off selling information about you to others, in the chain of importance, consumers and their problems are almost always at the bottom. Most will not anything beyond cursory obligations until/unless a lawsuit is filed. Anyone who thinks the credit bureaus; Experian, Trans union and Equifax are their friends, will be sadly mistaken. Just like politicians, they go where the money flows and we jus don’t count.

Most consumers have little idea of what actions can be taken when information is placed on their credit bureau reports. Many consumers do not realize that the cardholder’s agreement that governs your credit card agreement can also be enforced by any subsequent collector/holder/purchaser of that agreement. It is not unusual today, to see the very same account being reported multiple times on your credit reports by these various collectors.

A bigger problem encountered by consumers is the frustration of having debt buyers place information that is false and changing dates to keep those portfolio’s alive for longer than the law allows. Some of the problems incurred that affect most consumers are:

        -Multiple placement of the same accounts
        -Changing dates of last activity
        -Refusal to update payments
        -Placement of ‘Bogus Accounts’ by debt buyers
        -Not showing accounts that are disputed

When the original creditor charges an account to profit & loss (P&L), that fact can legally be reported on your credit for seven years. That seven years starts and stops when you make payments with an item called the ‘Date of Last Activity (DOLA).’ One of the arguments about paying a debt collector is that you suffer again by restarting that DOLA, which would cause the negative item to fall off at seven years. Each owner/holder/collector of an account can join the credit bureaus as a ‘subscriber’ which allows them to report information (for a fee) and pull your credit reports. The FCRA states that all information they report MUST be ‘accurate’ which is defined as “precise.”

You, as a consumer, have the right to dispute the validity of anything on your credit reports that is not accurate, which is supposed to effect the removal of inaccurate information. I recommend to anyone who finds information on reports they do not recognize to immediately dispute it with the credit bureaus as not my account.

Many debt buyers are known to change the dates of last activity in an attempt to give new life to old accounts that may be time barred by state and federal statutes. Most often we receive complaints on the following:  

       First American Investment Company,  Asset Acceptance Corporation, Unifund Partners, CCR, NCO Financial Services, Shekinah, Inc., Account Management Services, GMK, Inc., Arrow Financial, Client Services, Inc., Global Acceptance Credit Co., MKM, Inc., RJM Inc., LVNV Funding, Midland Credit Management, Palisades Collections, Redline Recovery, Wolpoff & Abramson associated entities, Zenith Acquisitions and many more.

The good news is there is now a national group of consumer attorneys who are available to assist you in going after them. In 2005, one major debt collector was booted out of Experian because of complaints and lawsuits filed by consumers. It is very important that voice your complaints regarding these slimy debt collectors who use the credit bureaus as a form of blackmail or extortion to collect monies they are not entitled to.

There is an excellent site where the BEST consumer attorneys in America are ready to assist you and they do not even have to reside in your state as FCRA litigation is federal.

Go to:  www.MyFairDebt.com

Tell me what you think.



  1. Based on my own experience, I absolutely agree that the credit reporting agencies (CRAs) are NOT our friends. To them, we (consumers) aren’t their customers – we’re actually their PRODUCT: we’re their version of livestock.

    Let’s face it, the more info they have in our files, the better “resources” they can claim to be for their “subscribers” – the creditors and collection agencies who who subscribe to the CRAs in order to get (and report) information about us. On top of that, it’s a very negatively oriented business – the more BAD info they can up with, the better from their perspective. (Much like GOSSIPMONGERS.)

    Why do they love the NEGATIVE info about us so much? Because the more NEGATIVE info there is in our files, the higher *interest rates* their subscribers are likely able to charge us. In other words, the creditors and collection agencies pay to see DIRT. All of these entities have a vested interest in poisoning our reports: to keep our credit scores down so they can keep interest rates UP.

    I have a well-documented case against a CRA and a collection agency for violations of the FCRA, including a representative at the CRA smugly admitting what they did in a recorded phone call and basically gloating that there was nothing I could do. Finding a lawyer in my area hasn’t worked out at all though. Thanks for posting the link. I’ll check it out.

    Comment by JAN — August 30, 2006 @ 6:30 pm

  2. Let’s see if I got this whole thing straight.

    John Q. Public (as in “We The People”) is allegedly protected against abuses from the Credit Industry via two distincts federal statutes, namely Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA).

    The first one is supposed to ensure that the information listed in the files of credit reporting bureaus about John Q. Public’s ability to pay his bills is accurate, the second one is supposed to ensure that John Q. Public is afforded certain standards of consideration (decency) when being contacted by a debt collector.

    The “enforcement” of both statutes falls under the purview of a federal agency: The Federal Trade Commission (FTC) which is populated by people whose large salaries are supported by John Q. Public’s payment of taxes.

    How am I doing thus far?

    Now, consider that the FTC is actually nothing more than a repository for complaints to be used for statistical purposes, that most, if not all, of the FTC’s highly paid employees appear to exhibit symptoms of “torn rotator cuffs” resulting of too much self petting in the back (they do nothing but they get paid anyway), there appears to be some “misunderstanding” as to the definition of the word “protection”.

    As a consequence, neither FCRA nor FDCPA are actually enforced by the FTC which leads to the well known abuses of John Q. Public by the very people that the statutes are supposed to keep in check.

    Adding insult to injury. John Q. Public’s only “recourse” in case of abuse by either entities is limited to paying yet another entity (a law firm) to do the FTC’s job.

    Does John Q, Public get his money’s worth in this deal? ABSOLUTELY NOT.

    Do I things see clearly, thus far?

    Am I also correct in stating that if John Q. Public (A. Nonimus) is “mishandled” by either a credit collector or a credit reporter, well, that’s really too bad. BUT, if John Q. Public happens to be an Appelate judge in Texas, the credit collector/reporter is in deep doo-doo because the “law” is coming down on him/her ?

    Can we agree that Orwell was right when, in his book “Animal Farm”, he states that “all pigs are created equal. Some more equal than others”.

    Well, John Q. Public, your chance of possibly changing some of that is around the corner.

    In early November, you will be asked to elect some of the people that can really make sure that the bureaucrats at the FTC give you your money’s worth.

    Those people too are getting fat salaries paid from your taxes.

    Make sure that you get your money’s worth out of them and demand that your “elected representative” never forgets who sent him to a life of luxury and pleasures in Foggy Bottom by the Potomac: YOU, John.

    Now, John, for all other pressing issues, here is food for thoughts:
    “Help yourself and the Lord will help you”.

    Did I get this whole thing the way it really is?

    Comment by Mytwocentsworth — August 30, 2006 @ 8:29 pm

  3. Yes, 2cents, depressing, but accurate…

    Comment by Bonnie — August 31, 2006 @ 8:11 am

  4. The following statement is not applicable to the purchaser of an agreement.

    I quote, Many consumers do not realize that the cardholder’s agreement that governs your credit card agreement can also be enforced by any subsequent collector/holder/purchaser of that agreement.”

    The reason is I wrote the FDIC, and they advised that the Credit Card Debt holder is only contractually liable to the credit card issuer.

    The debt buyer is not party to the original agreement and has no contract with the credit card holder. Therefore, the debt cannot be passed to the debt buyer with out the original contract.

    Receivable Sales can be sold, but the Credit Card Holders Agreement must state that the liability can be sold also. Example: Home Mortgages, they state that you mortgage can be sold. The debt buyer purchased the debt, but without anyone to collect upon, under Contract Law

    We need some comments on this.

    Comment by John Lewis — September 6, 2006 @ 11:38 am

  5. John Lewis, they’re referring to the “Holder in Due Course Rule” which abolished certain parts of the Holder in Due Course Doctrine back in 1976. See the following:

    http://www.fdic.gov/regulations/laws/rules/6500-2600.html Scroll down to:

    {{10-31-05 p.7161}}


    Correct, contracts for Receivables (the types of accounts governed by the UCC) can be sold. One example of this is FACTORING. There are lots of details to know about this business regarding Right of Recourse, etc. However, the UCC specifically prohibits the factoring of CHARGED OFF Receivables. They are required to be classified as collection accounts – not Receivables. “Debt buyers” who purchase CHARGED OFF accounts aren’t factors, nor creditors, as explained in the Rules & Regulations. They’re DEBT COLLECTORS.

    Open-ended consumer credit is a different matter (credit cards, for example.) Whole portfolios can be sold to new creditors PRIOR TO CHARGE OFF but the new creditors have to uphold the obligations of the previous creditors’ Terms & Conditions. You’ll see this happen when one CC company buys another – for example, BOA buys out MBNA. BOA then becomes the bona fide creditor with the rights and responsibilities of a creditor.

    Again though, charged-off open-ended consumer credit accounts are subject to different rules. The Agreement or Contract is void – breached by the defaulting party. The terms change upon breach of contract. The creditor still has the right to collect. The debtor still has the responsibility to pay (in most instances). The creditor can (usually) legally sell the right to attempt collection on the charged-off account.

    But that’s NOT at all the same as selling all the rights and responsibilities of the creditor. Far from it. They’re not selling a contract. That contract is breached – dead and gone. All they’re selling is account information and the right to attempt collection. In many cases that “right” may the right to sue – but consumers should be aware that THEY have rights too, including the right to have the collector produce the actual documents that prove the agreement they signed that obligates them to pay this 3rd party and proof of chain of title from the creditor to the collector. (Very few “debt buyers” have or are willing to produce these documents. Why would you or the Court take their word for it?!)

    So the purchaser of charged-off debt isn’t a creditor as defined by the Truth in Lending Act or even the Uniform Commercial Code. It’s a DEBT COLLECTOR, as determined by the Rules & Regulations and explained many times over by the courts and the FTC. It’s important to understand the differences between these different types of entities – and which rules apply to them.

    Comment by JAN — September 7, 2006 @ 9:14 pm

  6. Public records – Who do I hold accoutable for incorrect “tax lien” entries by a certain CRA?
    The court records are “judgement liens” but are NOT tax related in any way. Only one CRA reports them as tax liens and claims that was the way the accounts were reported. I believe that someone (or “thing”) incorrectly inputted this info into the CRA database. How can I get this corrected?

    Comment by D'Bodi — September 18, 2006 @ 5:45 am

  7. D’Bodi, first thing I would suggest is that you make sure you’re working with hard copies of reports from each CRA. Do NOT use the “Free Annual Report” version for the following process, because if you do it allows the CRAs an additional 15 days to process your disputes – and that makes it more likely that they’ll have time to verify rather than have to delete. Get the regular paid reports (not the 3-1 version either) and work from them.

    Next, take the time to remove any old addresses and incorrect personal information that may be on your reports. Why? Because the more garbage there is on your reports, the easier it is for the computer systems that process these disputes to match up the minimum number of data points between your report and the data furnisher’s file on you, and consider it verified. It may take 2-4 weeks to clean up the personal info section, but it’s worth it.

    After that, dispute the inaccurate entry as “not mine” – you do NOT have a tax lien, do you? No? Then that is NOT YOURS. See if it is deleted, corrected, or verified as is. If verified, dispute one more time, this time as “Inaccurate – I have never had a TAX lien for this amount, for these dates, for this company.”

    If verified again, move on to a “procedural request” as described in the FCRA, insisting that the CRA identify the individual who “verified” the inaccurate entry. (It’s most likely ChoicePoint or a similar company.) The CRA will refuse to reveal this information, in violation of the FCRA. If it reaches this point you should consult with an attorney experienced in FCRA cases. Send everything via Certified Mail with the Return Receipt option. Stay off the phone – you need EVIDENCE and the phone deprives you of that. Do this all in writing so that you’ll have the papertrail you need for an effective lawsuit. (The best way to avoid a lawsuit is to prepare for one!)

    Study the following case: http://www.ltclg.com/Pages/Law%20Library/Cases/Apodaca%20v.%20Equifax.pdf Note the information about how they obtain this public record information, how they (don’t) verify it, the use of “data points” etc. It’s important for you to understand what they’re doing and why it’s wrong.

    Here’s a link to the FCRA: http://www.ftc.gov/os/statutes/031224fcra.pdf For this, you especially need to learn § 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i](pages 46 – 52)

    Also study the FTC’s recently released Report to Congress on the Fair Credit Reporting Act Dispute Process: http://www.federalreserve.gov/boarddocs/rptcongress/fcradispute/fcradispute200608.pdf – Full of great information you can use along the way.

    Good luck!

    Comment by JAN — September 18, 2006 @ 11:56 am

  8. Today, I did my “twice-a-year” review of my credit record with all three CRAs. I do that once in April under the FACT ACT (for free) and a second time in October (out of my own pocket).

    Although “everything is fine” (no derogatories and a “clean bill of financial health” – as in high FICO number), I am amazed by the volume of erroneous information listed in each record.

    They can’t even agree on anything when it comes to their mistakes.
    You would think that those guys could, at least, communicate with each other, occasionally, to verify the accuracy of their record keeping (that may be forbidden by antitrust legislation – can someone confirm that?).

    Certified letters will go out tomorrow demanding verification/correction of erroneous information and removal of old, out of date, addresses and other useless pieces of data.

    This brings me to a question that has been bugging me for quite some time by now: What T.H. is the basis for calculation of a FICO score?

    If the formula is based on the information contained in the CRAs books, God have mercy on us.

    I am pretty good at math but, for the life of me, I can’t even imagine how twisted some bean counter’s mind must be to make up a number out of multiple lines of BS scattered over three different sets of erroneous records.

    As the “records” do not indicate a level of income, savings(or any other indication of “net worth”), how can someone – based only on credit available and used, delinquencies or not and current status of payment – establish what kind of “credit risk” anyone is?

    Who came up with that brillant idea and why was it ever allowed to become THE benchmark of someone’s credit worthiness?

    The impact of a FICO score goes well beyond how much interest one will pay on a future loan. It also affects insurance rates (yeap, it does) and, believe it or not, it has a direct impact on a potential employer’s decision to hire or not.

    “Fair Isaac” is far from being fair, if you ask me (but their disclaimer was written by at least a gross of lawyers (144 of them) because it is eleven pages long, printed in “mouse font”, in light blue ink on a light blue paper – just like the terms and conditions of your “agreement” after receiving a credit card from Providian or Capital One – amongst many others).

    They can ruin somebody’s life for ever (and they do every day) BUT, in the end, “it’s not their fault because they used information available through CRAs”.

    The blind leading the blind….

    Any thoughts on this?

    Comment by Mytwocentsworth — October 8, 2006 @ 8:08 pm

  9. When I first became educated in credit scoring, the most amazing thing is how current income and assets are meaningless. The whole credit system revolves around the past, without any viable means of predicting the future. Someone making a six figure income can have say, a 100K credit line spread out over several bank cards, with 0 balances. Their FICO scores would be very high, and additional credit quite easy to get. Lets say that six figure income goes away, and the consumer has no reserve fund, so they start using the plastic to maintain a lifestyle. And being that the CRA’s and credit card issuers conduct business solely with computer software, nobody blinks an eye until the credit lines run out, and said consumer can’t pay their bill anymore. The consumer was in trouble long before the credit lines ran out, but computers don’t have the ability to know that.

    Credit scoring is much like the stock market, where each consumer is a company to be invested in. The main difference being that in the actual stock market, analyst are employed to forecast the financial futures of individual companies. What has happened in the past is not weighted the same in the stock market, as it is with credit scoring. Reason being, is that it would take vast armies of workers to research the millions of consumers on file with the CRA’s, and constantly be updating income and asset information. And the industry seems to do quite well with the current system. There’s no money to be made in such a labor intensive system of researching consumers. Just let a computer do it in a much more simplified way, with defined parameters for determining credit worthiness.

    Ironically, all the research goes on after the fact, when the consumer has defaulted. With collectors and skiptracers doing whatever means necessary to invade personal privacy in an attempt to uncover every aspect of a consumers financial life. If one iota of this effort was spent on the front end of the credit granting process, instead of on the back end when a consumer defaults, there would be alot less bad debt floating around. Of course, there’s money to be made in bad debt, and not in credit forecasting. The financial industry likes things the way they are. With their Bell Curve interest rates, easy credit for everyone, and a collection industry to clean up for pennies on the dollar, when consumers become overburdened.

    Comment by Brent — October 9, 2006 @ 12:07 pm


    It is very interesting as you will see.

    Comment by Mytwocentsworth — October 9, 2006 @ 7:00 pm

  11. Hello Brent;
    Thanks for your informative input to this.
    No wonder the system is broken.

    If all the various lending predators go by to decide who is credit worthy or not is information based on yesterday, what do they expect? Miracles?

    In less than one month, all of you will have a chance to do something about the current mess: you will VOTE. PLEASE DO GO VOTE!!!!

    Pick a candidate that will support reasonable legislation WRT credit, debt collection and the likes and MAKE sure that the guy/gal lives up to his/her commitment. It is your future that is at stake.

    Comment by Mytwocentsworth — October 9, 2006 @ 7:08 pm

  12. I urge all to vote in the coming election, but I don’t think any politician is going to bow down to the likes of Citi and Chase once they get in office.

    Things need to get worse before they get better. A maasive downturn in the economy with 50% default rates on prime credit cards would do it. I don’t think anyone wants to see that.

    There’s other things at work to maintain the status quo other than the lobbying power of the credit industry. Most changes occur with social activism. Be it rights for ethnic minorities, women, gays, or sanctions on the tobacco industry. Unfortunately, the social attitudes necessary to form such activism among the class of consumers with debt problems is not present.There is little sympathy from the general population towards the 10% of consumers with bad credit. This in turn, results in debtors being “closeted”, unwilling to admit their financial problems to others. A large portion, do to their lack of legal education, are scared and intimidated by the collection industry. A small portion turn to the internet, and become active in consumer forums. The forums act as support groups, where all debt problems are supposedly solved with validation letters, and $1000 FDCPA lawsuits. In the end, very little gets done other than alot of chest thumping.

    It would be interesting to see massive debtor marches outside the Citi complex in Sioux Falls, or next to the collection agency call centers in suburban Buffalo.

    I don’t see the consumer solidarity to make this happen anytime in the near future. But if you look at history, that’s how change occurs in this country, not at the ballot box.

    Comment by Brent — October 10, 2006 @ 8:03 pm

  13. Brent;

    Things are about to change and they will change through the ballot boxes.

    A large segment of the population is about to enter retirement (the “babyboomers”).
    Those folks are already very well organized (AARP, for instance) and they will have plenty of time on their hands to keep the elected politicos “in check”.

    Add to that the the fact that most of them are in debt (and may have problems paying their bills on Social Security payments) and you have the begining of a solution.

    Pushed by politicos who cannot escape their older constituents, Chase, Citi and other Capital One will have to bow down and become reasonable or their write offs will be so huge that their stockholders will take their investments somewhere else…

    Granted, it won’t happen overnight but it will happen eventually.

    Comment by Mytwocentsworth — October 10, 2006 @ 8:30 pm

  14. You’re right about the AARP. Along the same lines, the savvy retiree is going to learn that retirement accounts and Social Security can’t be garnished for consumer debt, and may just choose to avoid the collection process entirely.

    Comment by Brent — October 11, 2006 @ 11:38 am

  15. Question. Is there a reason why Experian makes it very difficult to remove old outdated/incorrect information that TransUnion & Equifax have no problem in cleaning up. I have requested old addresses be removed from my credit report and the first response I got from them(experian) is I need to send more prove that it is me requesting to fix my credit report(lol, like someone else wouild take the liberty to do it for me) ie. SS #, utility bill/bank statement …, none of which Eq. & TU apparently needed to determine it was me wanting to clean up 7 year old addresses. I then followed up and re-requested the incorrect/outdated items to be removed, meeting their needs for more of my personal info and low and behold they still seem unwilling to remove the info as they say they are being reported by creditors(funny how those same creditors didnt seem to be reporting same info to Eq/TU) in addition they added a spouse to my credit report and don’t want to tell me how that got there. I called and asked these items to be removed and now told I might get an email in 30-45 days on the disputed items to which I said I hope it is alot faster than that as it only took 2 weeks for Eq/TU to respond and correct all items. The lady didnt seem to like me referring to the other CRA’s and informed me they are different companies and run totally different(that would seem to be a very odd statement since they are in the same line of work and the only 3 CRA’s currently(as far as I know) in the nation and I would think they would need to meet the same requirements at some point in their duties, someone please correct me if I’m wrong.) Anyway anyone else run into same situations in dealing with experian or am I the only lucky one. Any advice is greatly appreciated. I have half a mind to inform my NACA lawyer about this crap but not sure if it is worthwhile to do so.

    Keep up the great work Bud!!! Very helpful website.

    Comment by Todd — October 26, 2006 @ 6:18 pm

  16. Anyone know that if a debt has accumulated as non-active for 8 years,if it can legally be bought by a debt collector and then placed on your credit report as delinquent?
    Primarily since the debt had already stayd on the credit report for the 8 years by the original creditor.
    I know the Federal law requires that it be removed after 7 years for delinquencies,up to 10 years in instances of Bankruptcies.
    The 7 years however is clear that if one fails to assert your right of collection within the time period allowed of 7 years,is somewhat a statutory limitations,failing to act to collect the debt,one surrender’s their right to collect after the time period has passed.it appears that since this particular debt(in which I am not privey to know whom the original creditor was)had lost their right after 8 years,then attempted to sell off the disfunct debt to a debt purchaser,in which legally a debt no longer existed,is now reporting it as delinquent.

    Comment by Fred — November 29, 2006 @ 6:33 pm

  17. Fred… ow. That was anything but clear!

    Let’s back up a few steps. First of all, there are two separate issues:

    1) Credit reporting period limited by the FCRA, normally 7 years for debt
    2) Statute of limitations for law suit on the debt, which varies by state

    In regards to #1, the debt collector can’t legally report a debt any longer than the original creditor can. So if it’s been 8 years since the account went delinquent and was never brought current again, neither the original creditor nor any debt collector (including one who buys the debt) would be legally able to list it on your credit report.

    In regards to #2, if it’s past the statute of limitations (SOL) for the court to hear the matter, in most states it simply means that you have the affirmative defense of the SOL in the event that you are sued. The debt collector can (in most states) continue with collection efforts indefinitely, long past the SOL, as long as they don’t sue or threaten to sue. In other words, they can send you letters and call or make smoke signals or whatever, and the expiration of the SOL doesn’t make it illegal for them to do so. (States that may prohibit collection activities beyond SOL: WI & MS.)

    If a debt purchaser is reporting an account that you haven’t paid on in 8 years or so, you’re looking at a slew of possible FCRA, FDCPA and maybe even state law violations. But there are some things you need to do to deal with this. First of all, you should dispute the collection agency’s claim and demand validation of the alleged debt. Then you should dispute the entry with the credit bureaus. And there’s more, but I’d suggest going to the Help from the Internet section and posting more info about your situation there so this thread doesn’t get too far off track.

    Comment by impishredhead — November 30, 2006 @ 4:33 pm

  18. Yes I understand,I appreciate your response,I also apologize if I lead astray this topic,I have already begain a dispute of the debt,prior to the original posting,it is currently being investigated,by experian.
    What the debt purchaser did was buy the debt 8 years after it went delinquent non payment,non activity,and has been reporting it as past due now for 220+ days.
    Like I mentioned I dont even know who the original creditor was.
    I was thinking of laches,as far as rights go,legally the original debtor would no longer have any right to the original debt,therfor there existed no debt that could be sold.
    it being maxims of equity it appears to be statutory(though I know they distinguish the two in law).
    Anyhow I just wanted to clarify,and to let you know I appreciate your input,and help,thanks!

    Comment by fred — December 1, 2006 @ 10:03 am

  19. We are amazed at brilliance of the bottom feeder industry and how they are allowed to report old, bogus accounts to the credit bureaus without any checks or balances. Experian states they rely on the ‘integrity of the information’ when that information is being reported by criminals, some with felony convictions. Others, like James A. Trent and wife Cecilia of Shekinah currently have IRS tax liens on their $million property and are depending on consumers to pay it off for them. How about the likes of America’s Most Disgusting Dead Beat Debt Collector, the infamous Ryon Alan Gambill. Experian sill allows this piece of garbage to report accounts, in spite of the lies, cons and rip-off’s he has perpetrated on such a large scale. How about debt collectors with felony convictions, should they be allowed access to the credit bureaus? They are, in droves. There should be laws enacted to restrict access to anyone convicted of a crime, especially a felony. That may seriously deplete the collectors in and around Buffalo, NY but who cares, a criminal should NOT have access to this information. What do you think?

    Comment by Bud Hibbs — December 5, 2006 @ 4:21 pm

  20. No one with a criminal history, especially at the felony level, should be anywhere near our personal financial information. Identity theft is skyrocketing nationwide, yet we’re allowing felons and druggies to get all the info they need to perpetrate this crime? That’s about as smart as hiring pedophiles to babysit.

    Maybe new laws should be enacted. But meanwhile it sure would help if the EXISTING laws would be enforced more actively.

    Our credit files are being poisoned in extortion attempts by those who place outdated or false information in them in order to force payment from someone who suddenly needs a car loan or goes to buy or refinance a home or whatever. THAT is when many people find out there’s a collection agency parked on their credit reports, just waiting for them. I recently learned that a co-worker of mine paid a $300+ collection account THAT WASN’T EVEN HIS because it was going to hold up the financing for his house for too long to get it straightened out.

    It happens all the time. The average consumer doesn’t have the time, energy, money, or knowledge to deal with it. The FCRA can be extremely confusing – much more difficult to sort through than the FDCPA. I haven’t even been able to FIND an attorney to sue a collection agency on FCRA claims. They keep telling me I have excellent documentation and it looks like a great case, but they’re “not able to do it right now.” That leaves me with the prospect of suing the collection agency and/or the credit bureaus pro se, or just letting it go. No doubt in my mind, thousands of others out there are in the same predicament.

    Then there’s this other problem: even if we DO bring a lawsuit under the FCRA for inaccurate info placed on our credit reports, we as consumers are severely limited because we can only sue under § 623(b) — after disputing the information and having them verify inaccurate or false information in the first place. This creates an enormous loophole for the CA’s to report all kinds of inaccurate or downright false information in order to inflict severe and undue damage on your credit in hopes of extorting you into just paying them to go away. How many people know enough about the FCRA to do anything about it? NOT MANY!

    Basically only the FTC can go after them for violations of § 623(a)A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.” Yeah well, that’s kind of a joke because the FTC hardly ever takes enforcement action unless they get THOUSANDS of complaints about one individual company. Here’s one the FTC finally took on: http://www.ftc.gov/opa/2004/05/ncogroup.htm But we all know this is the exception rather than the rule.

    If consumers had the ability to sue under § 623(a), it could make a difference. As it stands, the likelihood of serious consequences for reporting bogus accounts, re-aging, etc, is pretty slim. Our hands are tied and our watchdog hardly barks and almost never bites. So those who are inclined to violate the law go right ahead. If they get caught they can just say “oops!” pay the fine, consider it a cost of doing business, and keep right on going. Just like NCO, for example.

    Comment by impishredhead — December 5, 2006 @ 10:44 pm

  21. I leave you guys for a while and some threads die while others have to be brought back to life by Bud Hibbs himself (case in point: this one).

    Postings 20 and 21 highlight extremely serious problems: felons having free access to information that will (not “can”, WILL) lead to identity theft, the cavalier attitude of the various credit reporting agencies with regards to the validity of the information they report as being “true and verified” and the lack of enforcement of Federal Statutes supposed to “protect the innocent”.

    “Welcome to America” seems to be the only answer I can come up with at this time.

    Years ago, someone told me that, in this country, one was better off rich and healthy than poor and sick. That still holds true today.

    Jan, I defer to your expertise with regards to the near impossibility for John/Jan Q. Public to sue a CA under the FDCA for lies listed on his/her credit report. The answer may be that John/Jane can sue the CRA under the FDCRA for that (another thread on this blog addresses that issue). If one thing doesn’t work, maybe the other one will.

    In an previous entry on this thread, I “suggested” that everyone of you should make sure that his/her elected official (them guys/gals that you, people, just sent to the land of milk and honey – Foggy Bottom on the Potomac) were aware of YOUR problems with the credit business and that they (your employees, so to speak) would do something about it.

    All I can do is hope that you took my advice at heart and that the newbies at the graft and bribery game in Mashwingum have a clear understanding of what you (The People who sent them there) expect them to do (and of the consequences if they don’t do what you expect them to do).

    Problems like the ones addressed in postings 20 and 21 will never be resolved but through trying to force the FTC to do what they are supposed to do.

    Maybe we need to sue the FTC for gross negligence, dereliction of duty or other valid reason to get those bureaucrats to pull their heads out of their @$$es (or out of whoever’s rear end they have it stuck up) and start doing what we pay them to do: PROTECT US.

    How’s that for a novel idea – ask the people WE pay to work for their money?

    Obviously, I am a dreamer….

    Comment by MyTwoCentsWorth — December 7, 2006 @ 8:59 pm

  22. The Boston Globe takes a look at the credit reporting industry: http://www.boston.com/business/personalfinance/articles/2006/12/28/credit_agencies_lag_on_errors_fraud/

    Comment by impishredhead — December 29, 2006 @ 4:01 am

  23. US Representative Barney Frank said he plans to hold hearings early in 2007 about procedures at consumer credit bureaus, following a Globe Spotlight report last week on how difficult those firms often make it for people to correct errors on their credit reports, even those resulting from possible fraud.


    Comment by impishredhead — December 31, 2006 @ 4:53 pm

  24. Beware Do not no matter how bad your finances are take out online payday loans.These People prey on the people who need money badly.Online payday loan companys most of them have no Physical address.Once they get your bank account number.It’s all over.They will strip your account down to nothing.Do not get caught getting too comfortable with online transactions.take all steps protect yourself.Bud,Please i ask you consider adding on all your webpages.Please warn people about these online payday loans,i believe even though they are similar to reg paydayloan stores,at least you know where to find your local physical payday loan store.my research on the internet to that this online loans are very unregulated nationally.Although some states have banned these online prediators,they can still try to work uncover under several names.Please everyone write your state attorney,congress rep and lets put these people out of business.Their Collection practices are just as bad as the ones on ”Agenceys to Avoid” at http://www.budhibbs.com. i know we all just want our right to be enforced.i know there is always room for improvement.

    Comment by mattson06 — January 5, 2007 @ 6:43 pm

  25. I think i have fallen victim to the “changing of Dates to rereport debt” deal…
    Is there a example of a letter to send to the Credit bureaus to dispute these add-ons?

    Comment by Mike Nap — January 11, 2007 @ 8:23 pm

  26. I would like to thank you for the wealth of information you have put together great job………

    Comment by Tony D — March 15, 2007 @ 11:54 pm

  27. RE: Who needs FICO anyway?

    I have a real problem with FICO! First of all, who determined that FICO should be the “Gold Standard” for creditworthiness? Remember, this is a PRIVATE company, and so are the Credit Bureaus! Who gave PRIVATE companies ALL of this power? I never got to vote on this, in our “so-called” DEMOCRATIC government! Secondly, where did ANY of us “AGREE” to be bound by FICO? Isn’t this FICO “scoring system” an implied Agreement that was NEVER disclosed to any of us? I surely didn’t sign up NOR did I ever agree to be bound by FICO, but apparently, every car dealership, every home builder/financial institution has used FICO to undoubtedly & unfairly make our credit scores LOWER so that they (banks/lending institutions) can make MORE interest(%) on loans, etc., thus keeping ALL of us LONGER in DEBT! Of course, if you don’t agree to the company’s “policies” that extend you credit, then they simply REFUSE to do business with you. So, the TRAP is set, to FORCE us into a highly UNFAIR “credit reporting system” by PRIVATE companies, used by other PRIVATE companies, whose “policies” are NEVER in your favor! Thirdly, if there isn’t, there should be an OPTION to “opt-out” of FICO, as I share the same thoughts as many of you, that FICO does not accurately represent the creditworthiness of an individual (i.e. FICO doesn’t list assets vs. debt, debt ratio %, etc. Fourthly, there used to be a credit system that judged a person’s credit based on BILL PAYMENTS, PAYMENT HISTORY, etc. There’s a fine distinction I’d like to share, there’s a BIG difference in payment history/making payments on time VS. a FICO Score. For example, I have 15 accounts that have ALWAYS been paid on time, and I’ve NEVER been late on ANY payment(s); however, my FICO score is as low as 605. So, in my case, I can’t even get a “Fair” loan because I don’t have above a 650 FICO score…..!!! Unbelievable!!! Now, how does a person, such as me, have a “perfect” payment history forever, and I’ve NEVER been late on any payments whatsoever, have a 605 FICO score? That, to me, is truly astounding!!!!! If a bank looked at my payment history, I’d be a PERFECT candidate for a loan, yet FICO says that I’m a deadbeat, dumb, not a sound financial risk, etc. In my opinion, FICO is unlawful, unjust and completely slanted in favor of the banks/lending institutions.

    My thoughts going forward: Start a Corporation, Get a D&B#, Build Corporate Credit, Add Good Accounts to your D&B file by CONTROLLING your own credit/building your own credit history, and throw your FICO in the El-Trash-o! Personally, I don’t care what the credit bureaus do, as I am voluntarily REMOVING myself from a system that does NOT do anything to help an individual, but is set up (perhaps by design) to ALWAYS make the consumer LOSE & the banks WIN! There is NO “WIN” in sight, when we are bound by FICO.

    Comment by Jason C — April 4, 2007 @ 1:21 am

  28. I work for a major financial services co in the credit card services department. Their response to credit lending abuses is merely lip service. It doesn’t matter what “changes” the majors make to their own grade A credit card offerings via terms and conditions disclosure, etc, they make up for it by continuing deceptive, unethical and abusive practices within their “private” portfolios. I consider the industry ethics abhorrent, they prey on those that can ill afford it, who continue to pay, hoping to improve their credit. The poor stay poor, the rich take advantage of the system. Why would the credit bureaus be any different?

    Comment by Suzie Q — May 22, 2007 @ 7:09 pm

  29. PS – I would certainly like to see a response on the re-aging issue as well. I read that accounts can only be re-aged twice in 5 years. This ?collection? practice appears to be a form of FICO blackmail. – Thanks.

    Comment by Suzie Q — May 22, 2007 @ 7:14 pm

  30. Suzie.. An account can NEVER legally be re-aged. The 7 year reporting window starts the last time the account goes past due and is never brought current +180 days. So technically, if the DOFD (date of first defult) is 01/01/00 the 7 year reporting window would end 07/01/07.. Thats it, thats the end. It does not matter how many times it’s sold, or assinged. Two states over ride this with state law. That is WI and MS because their state laws say once the debt is past the statue of limitation for suing all collection activity MUST stop. This includes removing their information from your credit report.

    The fico black mail that is currently going on is..

    Junk Debt Buyers reporting as factoring companies and showing debts that where never installment accounts as installment accounts. Updating or reposting a collection account every month so it looks fresh to the fico system. Reporting wrong, higher amounts owed. Showing collection accounts as 30-120 days past due. (they don’t have due dates..) and the such.

    Comment by Clint A — July 1, 2007 @ 1:08 am

  31. Actually some types of accounts CAN legally be re-aged – but only by the original creditor, prior to charge-off, and when all the proper conditions are met in a mutual agreement between debtor and creditor. See http://www.fdic.gov/regulations/laws/rules/5000-1000.html

    Re-aging of accounts by collectors to keep negative information on credit reports longer than allowed by the FCRA is an absolute NO-NO. See http://www.ftc.gov/os/statutes/fcra/johnson.htm and http://www.ftc.gov/opa/2004/05/ncogroup.htm

    And yes, there is a lot of mis-reporting going on out there, intentionally poisoning reports to inflict more damage than is due, basically to hold the FICO score hostage. We need look no further than the CDIA to see who’s doing it and why.

    Comment by impishredhead — July 1, 2007 @ 6:20 pm

  32. I had an account with citibank that i for employment reasons let slip then forgot about. Upon reviewing my credit report found that of course it was on my report. then on down i noticed that LVNV funding had the citibank account(only caught this due to the exact amount) and it shows account opened 6-1-2007 for a term of one month. Is this an example of reaging. i have disputed it with the reporting companies to no avail as of yet. What if any recourse do i have. Is there any point trying to sue or anything. I am at a loss of what to do if the CRA’s dont fix this



    Comment by newt — December 9, 2007 @ 9:22 am

  33. NCO Financial has again engaged in re-reporting a debt that bought for probably nickels on the dollar that was nearly 4 years old.

    Comment by Bethe A. Strickland — March 31, 2008 @ 6:17 pm

  34. Thanks for such informative forum!

    Although these credit bureaus claim that they make every effort to report accurately, I caught at least one bureau, Equifax, failing to report the type of creditor in their database even though they have such a field, “Creditor Classification”. If these bureaus did an earnest job to verify the status of creditors, these subscribers would not have the right to make multiple placements of the original account or create bogus accounts.

    The verification of a creditor would be based on whether it can produce the documents of the original loan agreement and the chain of title from the creditor to the collector. Otherwise, the debt buyer (collector) is not a party to the original agreement and it cannot report the debt. It is critical to make this point clear when disputing the credit bureaus because they will toss the investigation back to the consumer if they get an answer from the collector that the debtor “owns” the account.

    Here is a link for the full FCRA and free info for credit repair and debt elimination:


    Please read on debt and creditor validation:

    How to fix your credit with the bureaus:

    How to dispute directly with the creditors:

    When writing to the original creditor, state the law clearly and ask them to produce records – this is a good letter sample:


    There is light at the end of the tunnel…


    Comment by Jule — April 4, 2008 @ 12:00 am

  35. Be wary of contacting the IRS about tax liens when they show up on your credit file. You can inadvertently wake a sleeping giant that will wreak havoc on your financial life. Get professional help. It’s worth the investment.

    Comment by Rick Jones — July 11, 2008 @ 12:30 pm

  36. David George Rosenberg, Unifund CCR Partners LLC founder, chairman and chief executive officer
    2349 Grandin Road (at the corner of Corbin)
    Cincinnati, Ohio
    Home Phone: (513) 321-7190
    House is across the street from the Cincinnati Country Club 12th tee.
    The three-story stucco house has 16 rooms (six bedrooms and nine bathrooms). The house sits on 3.87 acres and has two guest apartments, a pool, a pool house and what is described as a “rose garden non pareil.” There is garage space for six cars. Check it out on Google Earth.
    Born: 1965 – Izmir Turkey
    Lives with Richard Shenk (513) 871-0043 & Betty Ann Shenk (513) 321-0010
    All three are heavily involved with the Jewish Federation of Cincinnati: They have summer parties for teens at the house.
    Associates: Douglas A. Mallon, Jeffery W. Adams, Jeffery L. Jensen & Jon Alan Bader.
    Owns a Challenger 604 Private jet.
    All this information is freely available on the internet, just collected in one place here.
    If anybody has any more information about this guy, put it on an (anti)Unifund blog.

    Comment by none — January 26, 2009 @ 12:13 am

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