What is a "Factoring Company"?

[LaurelC]

I have mailed out 11 letters to collections agencies this week asking that they verify/validate accounts they have reported on. Was this necessary? Should I just have disputed the accounts with the reporting agencies?

Also.....WHAT is a "factoring company"?

Thanks,

Laurel

[willingtocope]

You have started in the right direction. The first order of business is to send debt validation (DV) letters to collection agencies (CAs). Send them "certified mail, return receipt requested" (CMRRR) so you'll have proof they were sent and received. Read up on the "debt validation" process at http://www.creditinfocenter.com/rebuild/debt_validation.shtml

And, a "factoring company" is a company that buys "accounts receivable" from a business and then collects on those receivables from the people that owe them. Technically, a factored account is supposed to be an account that is NOT past due...the business just wants their money faster than the lenght of time normally allowed (30-90 days). Some CAs and junk debt buyers (JDB) try to pass themselves off as a "factor" because that term implies that they are not subject to the Fair Debt Collection Practices Act (FDCPA)...that's bogus. (There is also some discussion that one of the standard credit reporting tools that CA use to send info to the credit agencies only allows a creditor to be either the "original Creditor" (OC) or a "factor".)

[mikey]

so gorilla,

if i have a few CAs that are listed on my report as "factoring co." and the acct was 3 yrs past due, some 4 yrs, is this illegal and in violation, or just a lophole they got that title? what can be done about it?

[willingtocope]

mikey: Illegal? Maybe. The "factor" title in itself probably doesn't mean that much. You'd need to look at the individual TLs and the TLs associated with the OC to see...

(Technically, its "inaccurate reporting" to show a past due, charged off, sold to another lender (a JDB) as a "factored account". However, you'd probably have trouble winning anything in court over just that.)

[mikey]

mikey: Illegal? Maybe. The "factor" title in itself probably doesn't mean that much. You'd need to look at the individual TLs and the TLs associated with the OC to see...

(Technically, its "inaccurate reporting" to show a past due, charged off, sold to another lender (a JDB) as a "factored account". However, you'd probably have trouble winning anything in court over just that.)

is that enough to dispute it and get it removed at least?

[willingtocope]

If what I said describes the situation, it is probably enough to get it corrected. Removed? Doubt it...

[mikey]

If what I said describes the situation, it is probably enough to get it corrected. Removed? Doubt it...

here is the info on the case i am in court now that lists this debt with a factoring company....first resolutions

I put Xs to cover up info they had listed...otherwise, this is what appears in my report. not much of anything. no date opened, no date last payment etc...but this company list themselves as a factoring company. they bought it supposedly around sept 2004. the debt went into default may 2002 (first missed payment). does this look right?

FIRST RESOLUTION INVESTMENT

639 ISABEL ROAD SUITE 390

CORPORATION

RENO, NV 89509

(888) 663-1717

Account Number:

XXXXXX

Current Status:

COLLECTION ACCOUNT

Account Owner:

Individual Account.

High Credit:

$XXXX

Type of Account :

Open

Credit Limit:

$0

Term Duration:

Terms Frequency:

Date Opened:

n/a

Balance:

$XXXX

Date Reported:

05/2006

Amount Past Due:

$XXXX

Date of Last Payment:

Actual Payment Amount:

$0

Scheduled Payment Amount:

$0

Date of Last Activity:

n/a

Date Major Delinquency First Reported:

Months Reviewed:

n/a

Creditor Classification:

Banking

Activity Description:

n/a

Charge Off Amount:

$0

Deferred Payment Start Date:

Balloon Payment Amount:

$0

Balloon Payment Date:

Date Closed:

Type of Loan:

Factoring Company Account (debt purchaser)

[willingtocope]

Looks right to me...nothing obviously incorrect. They show it as a "COLLECTION ACCOUNT" which is the big baddy...

[mikey]

Looks right to me...nothing obviously incorrect. They show it as a "COLLECTION ACCOUNT" which is the big baddy...

but has that tag on the bottom....FACTORING COMPANY ACCOUNT

is that part right? and whats up with all the blanks...seems they dont have much info thye furnish to the CRAs other than an amount and the date they reported it.

[willingtocope]

Well...calling it a factoring account is not 100% accurate because according to the accounting definition of the term, a factored account is not normally past due. But, again, I doubt that's enough to sue over...or even get it corrected.

And...all the blanks just illustrates again that most CAs and JDBs have little info other than name, SS#, and amount they want to stick you for. That's why we use the DV process...make them prove its yours...

(We can't stress enough that JDB's usually buy in bulk. They'll get a package of 1000 or 10,000 "distressed" accounts. The info they're given is really sparse. They don't need much to scare people into paying. Do the math. They pay say, 10 cents on the dollar for the package. They only need to bully 10 out of 100 people to get their money back. Anything over that is gravy.)