Is paid NSF Check a "Paid Collection Account?"

[majiking]

A couple of years ago my wife wrote a check to Fredericks for about $25.00. Because of someone getting ahold of my Visa Check Card number and fraudulently charging mail order items the account was overdrawn. I reported the fraud and the bank credited back my money and service charges. However, fredericks never resubmitted the check. I get a letter two weeks later asking for payment plus $25.00 service charge. I promptly sent them a money order as they requested.

Since then there has been a paid collection on all three CRA's. I contacted the CA several times and asked they verify and delete. They responded with a copy of the NSF check (which they never returned to me). I got quite upset and sent them a letter stating that they are intentially reporting the account as collection account when in fact there was no credit line, just an NSF check which I made good as soon as I knew about it. I told them that this reporting was inaccurate and injurious to my credit and that I was prepared to sue in small claims court. I then get a letter from their attorney saying that I am harrassing them and that they have a right to report me as a paid collection. Their attorney said that he was prepared to file a counterclaim for harrasement and "malicious prosecution" if I pursued the matter in court. I have disputed with the CRA's 4 times since then with it always coming back verified.

This CA is unreal. I am at my wits end. What should I do? This is by far the worst entry I have. Help!

BTW the CA seems to be an inky dinky one in Temecula CA.

[lizandjerry]

I'm not a credit expert by an means but I'd like to throw my little 2 cents in if possible.

I dont think that they would have a leg to stand on in court. I dont think a court would ever find the consumer in violation of harrassment as opposed to the CA. I actually think it would be pretty funny for a CA to try and claim that considering their history with harrasment and false accusations to attempt to get you to pay.

I say go for it anyway. Who would ever believe that a CA was being harrassed? Its like the biggest contradiction of all time

[majiking]

What I really need to know is: Do I have a leg to stand on. I'm not really worried about their countersuit. I just need to know if they are within the law by reporting a bounced check as a paid collection. It seems like a greatly exagerated claim. What will the judge think. I don't want to proceed if the judge will definetly side with the CA and say "well the check bounced so they can report you."

[retmar]

Who did you pay the money to? If it was the CA, did you pay the money within the initial 30 day period? Do you have any of the original correspondence? Were you notified that this negative item would be placed on your credit file? Search your home and all drawers to see if you have any correspondence at all from Frederick's and the CA. Hopefully, it is an initial CA communication as it should have the disclosure on it.

The reason I am asking this is that in the State of California, the California Civil Code 1785.26. clearly states that any person reporting negative tradelines to a credit reporting agency must notify the consumer, in writing, within 30 days before or after such entry has been made. Now, don't take this and run with it right now. Due to that attorney's letter, you want to cross all t's and dot all i's before you jump. Even though this attorney is blowing smoke, you want to assure that you protect yourself first.

As to your question about the Judge. If you went to court, you would have all of the info regarding the theft. You would also, hopefully, have proof the other parties involved redeposited their checks. True, you should have checked your account and contacted any payee who's check was still outstanding and advised them as to what happened and to redeposit the check, including Frederick's. That you are to blame for. At the same time, did Frederick's only deposit once. If so, you could use the defense that you assumed they would redeposit as most payee's deposit a second time before contacting the consumer. In regards to them holding on to the check, I would call my bank and ask them if they are allowed to keep the check. I was understanding that it must be returned to the consumer once payed. This is info you want to have proof of before you ever go to court. I agree with you that it should be not a collection. In my opinion, if you did receive a letter from the CA and paid within the 30 days, is does not constitute a collection. Reason being is that the initial letter is telling you of the debt, your rights, etc., then also says that if paid immediately, there will be no collection activity. If that is true, how can it be a collection when you paid as soon as you found out, thus, no activity. Now, if the check was turned over to the CA and you did not respond promptly or properly, then yes, it would be considered a collection. If you can prove you were not notified about the negative entry, you have a strong defense. If you can't find this proof, try first, then write a letter to the CA saying something like you don't understand how it can be a collection when (explain what happened). Would they please send you copies of the letter(s) THEY sent you in regards to this debt that say it is a collection. You just want to totally understand what is going on. Be sure to start the letter stating you are not trying to harrass them, etc., etc., just want to understand. Be sure to repost when you get your info and before you do anything about the CA. Don't say anything to them about the reporting issue.

[majiking]

Retmar, thanks for your reply. I am now in the process of trying to find records from that period of time. Unfortunately, I didn't think that this issue would come back to bite me. Thank you for the information.

[retmar]

You're welcome! I just didn't want you to jump in without having it altogether. In other words, I didn't want you to stand in front of a Judge and have him ask you a question, and you answer "HUH?"