Collection Agency doesn't own debt, can they report on my credit report?

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My husband as a old college debt that we forgot about and they have transferred the debt to a collection agency. The collection agency in question (Transworld Systems, Inc) does not own the debt but is reporting the debt as being owed to them on my hubby's credit report. Is this legal, are they able to report this debt and it is truly not their debt but it is still between my hubby and the college they are just a 3rd party collecting the money.

I guess the question is are they legally allowed to report this on his report being that they don't own this debt they are just collection agents for the college. Also, the CA stated that things cannot be removed from the credit report just reported as paid is that true, they said removing is illegal?

Also, I'm thinking we wouldn't pay them dime and I should start the DV process (we have already disputed it with the credit reporting agencies).


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I found the answer a collection agency can report on your credit report even if they do not own the debt they are just collecting. In my case I'm thinking they can't even do that because we are still paying the original creditor and they(the collection agency) have yet to validate a debt to me. The saga continues.

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I had something similar happen. At one point, I had the same debt something like 4 times on the report:

1) the original charged off debt

2) the last collector who owned it

3 & 4) the new collector who had bought it, and listed it twice

I complained to the CRA and contested 2,3 & 4. They took them all off without a fuss.

In your case, it's possible the report is just slow to catch up. Why not contest the entry and see what happens? Either the CRA will remove it, or the collector will have to validate it.

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Only 2 entities can report the same debt at the same time. The OC and whoever is collecting at the time.

If the OC has turned the debt over (not sold) to a CA, yes the CA can report the debt along with the OC.

If the OC sells the debt, the OC must report the debt as closed, sold/transferred, and -0-balance, and the buyer (JDB) can report the debt along with the balance.

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