mandolin.peach

OC reporting "Charge Off" every month!

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I have an OC that is reporting my account status every month as "CO" to all three CRAs. Although they still show last activity as 8/02 and a scheduled removal date of 8/09, I believe their method of reporting is clearly intended to "re-age" the account to keep the charge-off status more current than it actually is. This way, if anyone pulls a 12 or 24 month report, this account always appears at first glance to be just charged off.

Has anyone seen this or dealt with this? I intend to dispute it, but would prefer to wait until next August when the SOL is up. This company never sold the debt off and quit collecting after my first two DV letters two years ago. So, I don't want to "wake a sleeping giant", and I don't have any intention of trying to get credit/loans anytime soon.

Also, I did try to get a mortgage in 4/04, and was turned down primarily because of this account.

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A chargeoff is a one-time reporting. They should not be reporting it every month afterwards. What they are doing is designed to keep your FICO score in the dumpster, even if it doesn't result in extended reporting by the bureau past the 7.5 years reporting limit.

I would say that qualifies as "poisoning" a credit report, which is not a legal practice.

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even if it doesn't result in extended reporting by the bureau past the 7.5 years reporting limit.

LINK ->
The date from which the 7-year reporting period (7YRP) is measured is;
[list:b029add19a]"the month and the year of the commencement of the delinquency
that immediately precedes a negative action."

That the mysterious 180 days [§ 605 © (1)] is FLEXIBLE in nature has been beautifully established. The 7YRP must begin at some time WITHIN the extra [first] 180 days, as opposed to starting the 7yrp at the end of the 180 days. And runs for 7 years, NOT 7.5.

A common misunderstanding though.

: )[/list:u:b029add19a]

Also Mandolin, you cannot "DV" an OC, (in the customary sense of the word). You may dispute with the CRA's.

Have you done that?

???

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even if it doesn't result in extended reporting by the bureau past the 7.5 years reporting limit.

LINK ->
The date from which the 7-year reporting period (7YRP) is measured is;
[list:0fd3d4b484]"the month and the year of the commencement of the delinquency
that immediately precedes a negative action."

That the mysterious 180 days [§ 605 © (1)] is FLEXIBLE in nature has been beautifully established. The 7YRP must begin at some time WITHIN the extra [first] 180 days, as opposed to starting the 7yrp at the end of the 180 days. And runs for 7 years, NOT 7.5.

A common misunderstanding though.

: )[/list:u:0fd3d4b484]

Also Mandolin, you cannot "DV" an OC, (in the customary sense of the word). You may dispute with the CRA's.

Have you done that?

???

Mandolin is in Florida? I beleive that in Florida we may Dispute with the OC, or "DV" an OC, as provided by Florida Consumer Collection Practices Act, §559.72, Florida Statutes (2005).

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Cap1 is notorious for reporting charge-off accounts this way. For example, it ususally says something like charge-off as of Nov 2005, Oct 2005, Sep 2005, Aug 2005, etc.

If you did dispute with the CRA, what reason would you use to dispute the account. The only thing is that if the account is within SOL, you definitely run the risk of a lawsuit.

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You can DV an OC anytime, what you DONT have is the FDCPA "prohibition of continued collection activities" protection. But they STILL have to validate the debt. You one-two punch them. Dispute the TL with the CRA's and DV them. If they "verify" but dont "validate" back to you, then they are making false/misleading statements on your CR's and you have them on FCRA violations.

I've had CapOne admit in court I my DV was valid (though we agree it has no FDCPA continued collections protection) and they HAD to answer it. They did NOT answer it correctly, and thats a different matter, for trial :twisted:

As an extra item, remember the FTC note in the DOFD discussion.......... "brings the account current...." especially for subprime people like CapOne et al users. If you are OVERLIMIT and getting hit with overlimit charges then even making payments that dont get you under the limit DO NOT bring you "current".

THis helps me, as the SOL and 7 year period are over a YEAR sooner than COne has them setup on my CR's :twisted:

________

MAZDA N PLATFORM HISTORY

Edited by uwackme
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A chargeoff is a one-time reporting. They should not be reporting it every month afterwards. What they are doing is designed to keep your FICO score in the dumpster, even if it doesn't result in extended reporting by the bureau past the 7.5 years reporting limit.

I would say that qualifies as "poisoning" a credit report, which is not a legal practice.

I had this question earlier. The OC has done this to me. I posted this on the board and everyone said they could.

Any law that says they can't??

Perhaps you know something that I do not!

Please see this thread.

http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=38630&sid=81bfc5c68b38169f5dcc7912376633b8

Thanks

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What they are doing is reporting the STATUS of the account as a charge-off, which would be accurate. The DATE OF STATUS indicates WHEN that charge-off ocurred. As long as THAT date isn't changed, then there should be no effect.

Unfortuantely, the bozos at EXP change the date of status to the date of your most recent dispute. THEY say it makes no difference to FICO, but a guy from FICO says that's wrong, it DOES matter.

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LINK ->
The date from which the 7-year reporting period (7YRP) is measured is;
[list:307df94920]"the month and the year of the commencement of the delinquency
that immediately precedes a negative action."

That the mysterious 180 days [§ 605 © (1)] is FLEXIBLE in nature has been beautifully established. The 7YRP must begin at some time WITHIN the extra [first] 180 days, as opposed to starting the 7yrp at the end of the 180 days. And runs for 7 years, NOT 7.5.

A common misunderstanding though.

: )[/list:u:307df94920]

I'm afraid that is NOT correct. When Congress changed the law in 1996 one of their most important changes was to establish a set in stone time for determining how long something negative may remain on your report. It is not flexible in the least.

This is the law verbatim, unedited:

"(1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action. "

The calculation is simple, really:

Take the date of the delinquency immediately preceeding the chargeoff, collection or other similar action and add 180 days (six months give or take a few days), then add 7 years. So it is 7.5 years from the date the account went into arrears ("commencement of the delinquency") no matter when they charge it off.

Prior to the 1996 changes, it was more "flexible" and was tied to the date the account was acted upon (chargeoff, collection) which could be months or years after the account went delinquent. Lenders took advantage of this to wreck people's credit for decades, so Congress took action to stop that kind of abuse.

And sorry Ladynred, but reporting COs every month is not accurate. A charge-off is a one-time event when the lender removes the account from their assets and places it into loss for accounting purposes. Once it is posted to loss, they can't repost it again without first moving it back into an asset on the books.

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They can update it every month. If they list it like this:

Account Status: Closed/Charged off

Max Credit: $500

Credit Limit $0

Balance: $327

DOLA Jan 04

Jan OK

Feb 30late

Mar 60late

Apr 90late

May 120late

Jun CO

Jul CO

Aug CO

Sept CO

Oct CO

Nov CO

How is that incorrect? CO is the status and the status is correct.

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As I stated a charge-off is a one-time event. Even paying it off does not change its status from a charge off...only to "paid charge off."

A charge off is a single event in time. Here's the legal and accounting definition for a charge off:

"The removal of an account from a credit issuer's books as an asset after it has been delinquent for a period of time, usually 180 days. When an account is charged off, the credit issuer absorbs the outstanding balance as a loss."

Since it is a single event in the accounting books it happens when the company does it. Not continuously thereafter. The monthly history shows the activity for THAT 30 day period not prior ones. So by posting CO every month after the first, they are reporting that they have charged off more debt each month, which is false.

BTW if you noticed the definition above indicates where Congress got their 180 days from for the purposes of writing the FCRA amendments. The definition came from the Merriam-Webster Expanded Dictionary

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Thanks for all the inputs--this has been very helpful.

ejspen asked if I DVd the OC. Sorry for my lack of clarity--I DVd the third-party debt collectors that the OC placed the account with after charge off (3/03). After the second DV letter was sent in July '03, I've never heard anything on the account so I believe it is still with the OC. All of my other accounts were sold off (the most recent 30-day letters on those accounts clearly indicate that they were purchased by new creditors/JDBs).

Does anyone have any advice about whether I should wait to dispute this monthly charge-off reporting until after SOL is up? And, would I dispute it directly with the OC or just the CRAs?

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wow thanks for this thread! I have a CO credit account with SOANB that shows like it is charging off every month. On the truecredit 24 month payment history box it shows a black box with "CO" each and every month under EX. Is there anything I could look at on a paper EX report to verify that they are improperly reporting this CO?

Thanks!

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I have this problem with Capital One. EX is the only CRA that is doing this. It makes it look like the account is charged off recently and not two years ago. Makes a difference in the score and it is inaccurate reporting. My Experian report is very inaccurate in general. Those guys are either morons or criminals ...

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Methus- I disagree. If they do not mark the account as CO, then what do they mark it as? Marking as CO does not mean they just charged it off, only that the account IS charged off.

Once an account is charged off ande reported once as such, the account is considered closed. Since there is no activity into or out of the account, there should be no activity after the charge off. Remember the monthly account information ont he credit report is the 30 day activity. If there is no activity, there is nothing to report.

I'll be blunt, I've seen literally hundreds of credit reports while helping people and while working for The First Chicago Bank law department. I have seen continuous CO reporting only once in all that. The furnisher was put on notice about it and they stopped doing it and corrected the errors without much prodding. The CRAs are f$%^ing boners...as they openly admit they report whatever the furnishers provide; right or wrong, the CRAs just post what their subscribers submit and leave it up to the consumer to detect and correct problems.

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And sorry Ladynred, but reporting COs every month is not accurate.

So by posting CO every month after the first, they are reporting that they have charged off more debt each month, which is false.

Sorry Methuss, but I have to agree with Dive - he summed it up exactly. '

They are NOT reporting as if they have charged if off every month. The charge-off in Dive's example shows the charge-off happened at the 180 days delinquent mark - THAT is the STATUS. After that, they are ONLY reporting the STATUS of the debt AS a charge-off, they are NOT 'charging it off repeatedly'. I've got entries on my CR that says '30 days late' for 5 months..then suddenly its a CO when I have PROOF of EXACTLY when the account was last paid and when it charged-off. The account's weren't continuosly 30 days late, it was 30-60-90-120-180 -- but its not SHOWING that in my reports. Quite frankly at that point it made no freakin' difference anyway, it was in the toilet and there was no saving it - but I'm sure as hell not going to waste time, money and energy in trying to force them to report it as 30-60-90-120-180.

The STATUS of an account, positive or negative, does get reported monthly by most creditors. What would you have them mark as the status of the debt AFTER charge-off ??? "OK" or "pays as agreed", or maybe leave it blank ? As far as I know there are no other codes to reflect the status of an account that's been charged-off AFTER the ACTUAL charge-off - they simply report the status - charged-off.

The question you should be asking then is WHAT DOES THE 'DATE OF STATUS' SAY ???? On a charge-off that DOS should be the month that the creditor actually charged-off the account and that date is what makes the difference. Its THAT date that the FICO scoring model picks up and that is EXACTLY why Experian's habit of updating the DATE OF STATUS to the date of your last dispute is so damaging to your scores.

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I'm afraid that is NOT correct. When Congress changed the law in 1996 one of their most important changes was to establish a set in stone time for determining how long something negative may remain on your report. It is not flexible in the least.

This is the law verbatim, unedited:

"(1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action. "

The calculation is simple, really:

Take the date of the delinquency immediately preceeding the chargeoff, collection or other similar action and add 180 days (six months give or take a few days), then add 7 years. So it is 7.5 years from the date the account went into arrears ("commencement of the delinquency") no matter when they charge it off.

Prior to the 1996 changes, it was more "flexible" and was tied to the date the account was acted upon (chargeoff, collection) which could be months or years after the account went delinquent. Lenders took advantage of this to wreck people's credit for decades, so Congress took action to stop that kind of abuse.

Although this issue appears to be "simple, really" it's actually is quite complex. And merely parroting what we think we see in the statute itself has already been tried, and brutally defeated with overwhelming documentary evidence. : )

Ok Methus,

Here's my next, and MOST important, question:

Did you bother to follow the links to MY SITE, as well as the LOOONG conversation on CN, where I exhaust this issue, PRIOR TO YOUR POST, or did you just post your knee jerk opinion without the research?

In other words, did you examine my research PRIOR to posting the above?

????

This is a "yes", or "no" question.

: )

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So how do you characterize this.

I have a TL, been there apparenetly since 2000. Chargeoff was April 2001... though DOFD was April 2000. Was reported 30, 60, 120, COff back in 2000/2001.

For years it was simply an "*" or "pays as agreed" aka NO REPORT THIS MONTH as fr as "status" was concerned. Interest kept tooling, they "REPORTED" aka "DATA FURNISHED" every month, increasing the acct BALANCE every month.

All of a sudden, they sue me years later, and LOSE. The next month's report the acct STATUS is back to ChargeOff/BadDebt actiavely reported EACH month since.

In otherwords the company... an OC... decided to bnegin deliberately reporting "CHargeOff" each month as a new 'DATA FURNISHED" as well as the interest tooling, and acct BALANCE continuing to be increased.

The FACT in the REAL WORLD is this is a deliberate POISONING of my CR by this creditor. 4 years of "*" replaced by 9 months straight of "ChargeOff/BadDebt". This plays directly into the FICO scoring and "recent activity" calculation. The FICO score picks up this new "DATA FURNISHED" report as RECENT ACTIVITY and caused a 50 point DROP in my CR.... as no other changes occured other than this one item on my CR's in the last year. You couldn't ask for a better lab experiment on the FICO effect of recent reporting if you designed it on purpose.

Somehow this has GOT to be illegal. Lucky for me, they really FK'd up because the acct is DISPUTED and they have failed to report it DISPUTED, instead reporting it as "ChargeOff/BadDebt" after losing thier lawsuit. With clear 9and admitted too) receipt of official notice of dispute, etc.

Yes, Im going to file suit in Fed Court.

But I bring this up for the purpose of this discussion, the reporting.... you understand, the actual REPORTING of chargeoff every month has an actual realworld NEGATIVE effect on the consumer, and THEY, the creditors, know it. So there must be some way of attacking thier tactic on grounds in the FDCPA/FCRA somewhere.

Brainstorm required people.

________

Best Penny Stocks

Edited by uwackme
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Here's my next, and MOST important, question:

Did you bother to follow the links to MY SITE, as well as the LOOONG conversation on CN, where I exhaust this issue, PRIOR TO YOUR POST, or did you just post your knee jerk opinion without the research?

In other words, did you examine my research PRIOR to posting the above?

????

This is a "yes", or "no" question.

: )

The answer is Yes I did read it. My question to you is: What is your professional experience in this matter? Are you a lawyer that has tried many cases? Although I'm not myself, I am a certifed records manager and spent over five years dealing hands-on with cases like this for the First National Bank of Chicago as the Law Department manager. I saw which cases were won and lost by the bank including the unpublished ones and those settled out. My position on the matter of repeated charge-offs being reported is based on those files I have had direct contact with, not hypothesis. I know for fact, that repeated charge-off reporting is not in compliance with the law...no guesswork there. Each 30 day period is activity for THAT 30 days. I don't understand why people are arguing this, even the header for that section on the CRA reports says "2 year account ACTIVITY."

As for the 180day time period mentioned in Statute, you and I are on the same page, but communicating it from two different ends. My point was to state that if an OC puts a delinquency on your report followed by a charge off, no matter if the charge-off occurs years later, it is not permitted to survive on your report more than 7+180 past the original delinquency. Personally, I don't see how the statute can be interpreted any other way. You are correct that the 180 day period is meant to be for the furnisher to supply correct and complete information to the CRA on the tradeline, but the law allows 180days to elapse before the 7 year clock starts. Even if the furnisher supplies everything on the first day to complete the file, it does not negate the 180 day period from existing, nor does the law specify that the period is optional.

Now as to why the CRAs may remove something right at 7 years instead of 7.5, that has NOTHING to do with the time period listed in the Statute. As I've said numerous times before (as has the FTC), reporting credit trades to the bureaus and the reporting by the bureaus is 100% voluntary. There is no part of the law that says a bureau is required to keep something in your file for 7, 7.5 or 10 years. Those limits simply say when a bureau is required to remove negative items. If the bureau chose to stop reporting a trade (positive or negative) on the 3rd year, there is NOTHING in the law to say otherwise. The CRAs may pick a plain 7 year period as a matter of convenience for them. TU does this by removing BK7s from consumer reports at 7 years, even though legally they can report it for up to 10. They do it because it keeps things simple, nothing more.

So if a CRA chooses to use the 7.5 year period as defined, they CAN. Do they have to? No. When you are speaking in terms legal, you must go with what the law specifies in plain language. The actual practice can be in contradiction of the law as long as it does not violate the law.

This is also why telling a consumer that they have to report anything to a bureau is total BS. The only things in the FCRA that are mandatory for a bureau to maintain are: Inquiries, because they must comply with section 609a(3); and records pertaining to fraud and fraud alerts.

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We don't disagree on much Methus. : )

... and I'm not trying to be cantankerous on your board, and I'm not trying to challenge you. I like your board, always have.

I'm merely of the opinion that this difference between 7 and 7.5 is VERY important because it can delay victory for our respective members.

I've seen MANY on numerous boards refrain from taking action they should have taken, by an additional 180 days, because those upon whom they relied for education were mistaken.

My ONLY point is simply:

That the first (additional) 180 days is flexible in nature, rather than fixed. In other words - the reporting period may begin NO LATER THAN the expiration of these 180 days, as opposed to starting upon it's expiration.

Our dilemma is one of interpretation.

When folks are miscontsructed over an issue we ALL turn to the one authoritative source for interpreation, the Congressional Research Service:

The Congressional Research Service is where Members of Congress turn for the nonpartisan research, analysis, and information they need to make informed decisions on behalf of the American people.
The Congressional Research Service is the public policy research arm of the United States Congress.
CRS employs a highly educated professional staff who are hired, retained, and promoted on the basis of merit and accomplishment.

This is the analysis of the CRS for the CCRRA 96:

  • Provides that the seven year reporting period applicable to accounts placed for collection begins no later than 180 days after the beginning of the delinquency immediately preceding the collection activity.

Here's the PDF ->

Congressional Research Service Analysis of

The Consumer Credit Reporting Reform Act of 1996

PL 104-208]

Thanks for lettin me share.

: )

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