Open Collections.....Calling all Experts!!

[qumara]

I have items on my credit report from

Asset Acceptance

Allied.AFNI

Anderson Fin Bloom

IC System

Park Dansan

and they are listing my items as open collections (with balances) and now since I know that is a no-no, how can I go about getting this off my reports for good? I'm going to do a search for this ITS letter..(Should this be my 1st step, or should DV be my 1st step?) In regards to both letters, do I use the sample DV & ITS letters and then add the violations? (I just found out what the violations are for CA's putting collection accounts as open) Also, do I send these letters to the CA's or the CRA's (or both?)

Please help! Thanks Again.

[breathing_easier]

First DV all CAs, send CMRRR. When you receive the receipt (green card) in the mail, immediately dispute as Not Mine with the CRAs (it's affectionately known in credit repair circles as the "1-2 Punch"). If the CAs verify with the CRAs without validating with you, then that is another violation. If the CA doesn't advise the CRAs to mark their TL as "in dispute," yet another violation. You don't send a DV letter to a CRA, only a CA. You will probably see at least one or two of the CA TLs drop off your report from your first round of disputes. You don't want to initially dispute the TLs as being "Closed" instead of "Open" because that could appear to be an admission that the accounts are legitimately yours. Makes it more difficult to then use the Not Mine dispute at a later date.

Others here may offer different suggestions, but my recommendation would be to give the CAs plenty of rope with which to hang themselves before you send ITS letters.

[codename_fortyseven]

I'd just get a paper copy of the report, so you have proof they are reporting inaccurate information.

[Xanathos]

Yeah, the open account thing is kind of an insta-violation, since there's no commercially logical way any collection account could ever be open to new charges.

You could do as the first guy said with the 1-2 punch, but this doesn't always work, and doesn't necessarily mean a violation...if you send a DV more than 30 days after you first realize a bad tradeline or get a dunning letter, the CA loses the obligation to validate the debt to you (sort of--it's kind of an ongoing battle as to just what rights you lose if you wait more than a month)...so it's not necessarily a violation.

[GreatGadsby]

found that in the FDCPA you can get them for not reporting it as disputed when they update wih the CRA though. and you don't even have to prove it's willful

[breathing_easier]

You could do as the first guy said...

Hey, who ya callin' a "guy" ?

[florianfive]

What are the violations for a CA reporting an open account, or where can I find that info?

[GreatGadsby]

misrepresenting the character or status of the debt. it's under the prohibited practices section.

[Recovering Attorney]

Query: Would you want what is essentially a collection be reported as an "open account" or a "Collection"? Just guessing the former rather than the latter, so I might shy away from saying the CA violated the law because it mischaracterized the debt.

[gdouglaslee]

Query: Would you want what is essentially a collection be reported as an "open account" or a "Collection"? Just guessing the former rather than the latter, so I might shy away from saying the CA violated the law because it mischaracterized the debt.

Newbies are always confused between the account type and the account status. The account status for charged off credit cards is always 'closed'.

As far as the account type, that's an interesting query. I get your point loud and clear. How do you explain to a judge that a JDB mischaracterized the debt as an open account while at the same time trying to say that the debt falls under the 3 or 4 year SOL for open accounts?

But there is a difference. I have to believe a JDB collection account like they appear on TU does not affect credit scores as hard as a JDB "creditor" account as they appear on Equifax and Experian.

[divemedic]

Actually, I wouldn't at all. An account reporting as open and 120 days past due hurts your score more than a collection. This practice is used to trash your score, and is certainly not complete and accurate.

[florianfive]

That is the reason i asked. I have an account from '01. It was reported as a chargeoff w/a zero balance. When I disputed it Capital One changed it to an open account with a balance due that brought my score down. Can an account be chargedoff and then reopened?

[willingtocope]

IMHO, its the term "charge off" that gets confused. A CO is first of all just an accounting term that means its been taken as a charge against income for IRS purposes. Doesn't mean the account is dead and, depending upon the accounting practices of the OC, they can continue to charge interest and penalties. So, basically, moving it from CO to open is just a shift on their balance sheet.

It's when an account is "written off" and a 1099c issued to the debtor that the account is actually closed and effectively off their books. This can also occur for accounts that are "charge off / sold to another lender" in which case they should show a balance of $0. (I'm not clear on whether they should issue a 1099c for the "sold" account and if they do, does that really mean you don't owe the JDB because in effect, the OC "gave" you income which you have to pay taxes on).

[breathing_easier]

(I'm not clear on whether they should issue a 1099c for the "sold" account and if they do, does that really mean you don't owe the JDB because in effect, the OC "gave" you income which you have to pay taxes on).

The way it was explained to me by my tax advisor when I was declaring the 1099-Cs on my 2002 federal income tax return, only when an OC has formally cancelled the debt with the account holder do they file a 1099-C. Selling the account to a JDB, with whom the account holder may later be forced to settle (in effect paying on the same balance for which you've already paid income tax), does not qualify the account for 1099-C status.

[Whalesharks]

So when a collection agency has newly acquired your OLD collection account from a former collector, and they list it on your credit report as a Collection account, but also as Open, is that a violation?

[willingtocope]

So in other words, it might be possible to use the IRS regs against an OC that lists you as CO? Basically demand a 1099c for the account? Yes, techincally, you'd have to pay income tax on the balance, but you'd be save from further hassle by JDBs...

I remember reading the "charge off" IRS regs...they do imply that a OC can keep a CO on their books for 2, 3, or 7 years depending on certain things, so, now that I think about it, you probably can't force them to do anything...

[qumara]

Thanks everyone for the advice....... As I'm reading some of the responses, now I'm more confused as ever!

Here's an example of what the CA's listed on my CR.

AFNI

TransUnion

Reported

Account Type: Open Account Number: XXXXXXXXXX

Payment Responsibility: Individual

Date Opened: 12/2001

Balance Date: 01/2002

Balance Amount: $324

Monthly Payment:

High/Limit: $324

Account Status: Collection

Past Due Amount: $324

Comments: COLLECTION ACCOUNT

==============================================

ALLIED INT

TransUnion

Reported

Account Type: Open

Account Number: XXXXXXX

Payment Responsibility: Individual

Date Opened: 05/2003

Balance Date: 12/2003

Balance Amount: $341

Monthly Payment:

High/Limit: $341

Account Status: Collection

Past Due Amount: $341

Comments: COLLECTION ACCOUNT

============================================

ASSET ACCEPTANCE CORP.

Equifax

Reported

Account Type: Open

Account Number: SPRINT PC-XXXXXXX

Payment Responsibility: Individual

Date Opened:

Balance Date: 04/2005

Balance Amount: $373

Monthly Payment: $0

High/Limit: $371

Account Status: Collection

Past Due Amount: $373

Comments: COLLECTION ACCOUNT [/color

===============================================

Do I have a case here of disputing open collections? I sure hope so, because I so need to get these off my report, and quick..... I disputed some, and some came back verified. How can the CRA's verify open collection accounts?

[LadynRed]

What are you going to dispute ?? The JDB/CA has the collection and its an OPEN account to them, so it is NOT inaccurate. The ORIGINAL account should be closed, but the COLLECTION isn't - not unless you pay them.

[qumara]

LadynRed.....Thank you soooooo much!! Since I'm a newbie, as I said earlier I was sooooo confused as to how the listing should show on my CR. After reading alot of posts, (here and other credit repair boards) it seems the alot of people are saying collection accounts are not supposed to be open even though a JDB/CA has acquired it (they should be closed) even if the balance is not paid! Oh boy, back to the drawing board. I will start on my DV tonight, and keep it moving from there!!!

[willingtocope]

Okay, so the devil is in the details, but if I'm intrepreting the Metro 2 format correctly (see: http://www.debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=30765&highlight=metro ), on page 152 it talks about CA reporting accounts. On page 154 is states that the status of a CA account should be "Collection" not "Open".

But...first of all, remember that the Metro 2 format is a data transfer guideline between CA and CRA, and second, is basically the CDIA attempt to comply with appropriate laws...so, I'm not sure that you can nail a CA for not adherring to their guidelines. It might be interesting to take a shot at it, but I'm not at all certain you'd have any success.

[Xanathos]

What are you going to dispute ?? The JDB/CA has the collection and its an OPEN account to them, so it is NOT inaccurate. The ORIGINAL account should be closed, but the COLLECTION isn't - not unless you pay them.

Listing an account as open is a violation of FDCPA/FCRA...it may be "open" to the CA, as they're collecting on it...but it's not an open account. An open account means an account that is open to new consumer charges. There is no way a defaulted debt/collection account can be "open" under any commercially reasonable meaning of the term.

[gdouglaslee]

Okay, so the devil is in the details, but if I'm intrepreting the Metro 2 format correctly (see: http://www.debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=30765&highlight=metro ), on page 152 it talks about CA reporting accounts. On page 154 is states that the status of a CA account should be "Collection" not "Open".

But...first of all, remember that the Metro 2 format is a data transfer guideline between CA and CRA, and second, is basically the CDIA attempt to comply with appropriate laws...so, I'm not sure that you can nail a CA for not adherring to their guidelines. It might be interesting to take a shot at it, but I'm not at all certain you'd have any success.

Don't think so.

What are the Metro 2 Format Guidelines?

Are they federal statues? No. They are not federal statues. They were not created, authorized, condoned or approved by any federal agency.

Are they state statutes? No. They are not state statutes. There were not created, authorized, condoned or approved by any state legislature.

The what are they? Nothing.

There are several federal district and appeals court cases which hold that a "mistake of law" is not bona fide error.

In one case the CA claimed bona fide error because it was confused and though the SOL was 6 years not 3 years. Too, bad for them. Mistake of law is not bona fide error.

In another, the CA attempted to collect an amount not authorized. They claim the statutes were unclear. Too, bad for them. Mistake of law is not bona fide error.

Their misinterpretation of Metro 2 Format Guidelines or their inability to reconcile those guidelines with state or federal statutes or case law is their problem, not yours.

BTW, if you notice, JDBs have a choice. They can report as a Creditor, Factoring Company, a 3rd Party Collector, or nothing at all. 3rd Party Collector is more accurate than Factoring Company and certainly does not lead to confusion or misrepresenting the status of the JDB, and not reporting anything at all in that field is nothing and does not confuse or misrepresent the facts.

[gdouglaslee]

LadynRed.....Thank you soooooo much!! Since I'm a newbie, as I said earlier I was sooooo confused as to how the listing should show on my CR. After reading alot of posts, (here and other credit repair boards) it seems the alot of people are saying collection accounts are not supposed to be open even though a JDB/CA has acquired it (they should be closed) even if the balance is not paid! Oh boy, back to the drawing board. I will start on my DV tonight, and keep it moving from there!!!

You have apparently misread whatever information you had and are still confused and don't understand. The various formats used by the credit bureaus and on-line reports doesn't help with the confusion. You are looking at two very different and very distinct data fields. The 'Account Type' data field and the 'Account Status' data field are not the same and do not mean the same thing.

Your credit reports are showing "Account Type: Open." That is correct because Sprint provides communication services. Unless Sprint also provides medical services and mortgage financing, and I don't believe they do, that means this debt must be for a cellular phone and the account type is an "Open Account" so when you look up the SOL, you look for Open Accounts, not promissory notes or mortgages.

The 'Account Status' should be "Closed" unless Sprint is providing you cellular phone service, but somehow, I don't think they are. Sprint has charged off and closed your account, so the Account Status = Closed.

BTW, it would benefit you greatly if you knew for a fact whether or not Sprint assigned the account to AFNI for collection or if they sold it to AFNI.

[qumara]

You have apparently misread whatever information you had and are still confused and don't understand. The various formats used by the credit bureaus and on-line reports doesn't help with the confusion. You are looking at two very different and very distinct data fields. The 'Account Type' data field and the 'Account Status' data field are not the same and do not mean the same thing.

Your credit reports are showing "Account Type: Open." That is correct because Sprint provides communication services. Unless Sprint also provides medical services and mortgage financing, and I don't believe they do, that means this debt must be for a cellular phone and the account type is an "Open Account" so when you look up the SOL, you look for Open Accounts, not promissory notes or mortgages.

The 'Account Status' should be "Closed" unless Sprint is providing you cellular phone service, but somehow, I don't think they are. Sprint has charged off and closed your account, so the Account Status = Closed.

BTW, it would benefit you greatly if you knew for a fact whether or not Sprint assigned the account to AFNI for collection or if they sold it to AFNI.

Thanks for the response! Do I call sprint to find out this info? What would be the pro/con if Sprint sold or assigned the account to AFNI/Asset Acceptance. Noooooooooow, I see where my confusion lies!!! (oops my bad, hey I'm just learning ) The account type SHOULD be Open (I'm guessing because to the CA's, its open to them) <Per LadyInRed> and the Account Status SHOULD be "Collections") I GOT IT!!! FINALLY!!! I'm going to do the 1-2 punch with the CA's/CRA's because these accounts are really not mine! And as usual, I'll take it from there!!!

Now I need a drink...... Thanks All!

[qumara]

gdouglaslee..... Wait, should the account status be "Closed" or "Collections". My Account Status is Collections!