CA bought debt. CR for CA says Loan Type -Factoring company account. and a bunch of other things that dont make sense to me.

[needsalittlehelp]

 this is all very very confusing to me. I have spent hours and hours and hours reading this forum and other forums and many articles about debt. I will think im starting to understand it anda few mins laters i will be more confused then before. It makes my head spin and makes me want to rip my hair out sometimes lol.

 

iunderlinded the things that i am confused about 

 

-CA on my credit report                                 

 

Pxxxxxxxxo Rxxxxxxy

 

placed for collection - 03/xx/xx13              balance- 7580                      Pay status- >in collection<

responisbility -individual account               date updated - 08/xx/xx13

account type- open                                     original amount- 7580

loan type - factoring company account       original creditor-  G.X. Cxxxxxx Rxxxxx Bxxx

remarks- >PLACED FOR COLLECTION<    Past due -  7580

 

-now the original creditor 

 

G.X Cxxxxxx Rxxxxx Bxxx

 

date opened- xx/xx/xx05              date updated  x5/xx/xx13          pay status >charged off<

responisbility-individual account   payment rec-$150                     terms- paid monthly

account type - revolving               last payment made 11/20/2011  date closed 01/xx/2012

loan type - credit card                 original charge off- 6139               date pain 11/20/2011   

 

high balance

$6688 from from 02/xx11 to 09/xx11

$7432  from 03/xx12 to 03/xx12

$7580  from 04/xx12 to 05/xx12

$6139   from  06/xx12 to 05/xx13

 

 * the year orior when i pulled my CR the last payment date was listed as 11/21/2011

 

 

why is the CA reporting a amount different then what my debt was charged off as?

Also if my last payment was in 2011 why did my high balancw drop in 2012 and 2013?

 

The grid/graph of the account activity on my CR has some strange things going on buy not Sure if it is something worth typing up. i will gladly do it if someone needs/wants to see it. 

[willingtocope]

OCs, CAs, and JDBs like to play games with weasel words to confuse us...its intentional...they hope to scare you into doing something you might not do otherwise.

 

First...CAs don't buy debts.  Junk Debt Buyers (JDBs) buy debts.  CAs just do the hassling for OCs or JDBs.

 

Second, charge off (CO) doesn't really mean anything to you.  It stands for "charge againdst acccrued income for P&L purposes".  Bookkeeping.  However,if the OC's tradeline says "sold to another lender" and their balance is $0, then its been sold to a JDB.

 

Third, Portfoolio is sometimes a CA and sometimes a JDB...so it difficult to tell if they bought it from their TL (see above).

 

Now, technically, the OC is only allowed to claim an actual tax loss on the amount they actually wrote off...the amount you charged.  But the JDB can try to collect on that amount plus any accumulated interest and penalties.

[needsalittlehelp]

this is what is also on  my CR from the OC. i believe its been sold. I dont ubderstand all the $150 payments made a recently as 5/2013   alot of the colums were identical so i grouped them together

 

 

 

i didnt realize how badly i coied and pasted that spreadsheet hopefully this one is better

Untitled spreadsheet a.txt

[admin]

@needsalittlehelp - Looks to me as if they sold it.  

[BTO429]

To start with bad debts are NOT factored. When a debt is factored the collateral on the debt is the account itself. We all know that a no company will extend credit on a bad debt. 

 

When they list it a factored on your CR they try to escape the reporting of certain accurate information required by the FCRA. I have made several posts on what a factored account is.

[Clydesmom]

If the DOFD or DOLA is actually 11/2011 then you need to lay low on this one for a while on this one depending on your state.  The shortest SOL for filing a lawsuit is 3 years and that hasn't passed yet.  If you live in a state that has a 6 year SOL and no borrowing statute or worse OH with a 10 year SOL then you have a long way to go before you cannot be sued over this debt.

 

PRA does sue and the last thing you want to do is call their attention to you that the SOL is expiring and motivate them to file a lawsuit.  

 

Let me clue you in as to what will happen if the SOL passes and you have not been sued.  They will continue to break the law and report inaccurate information.  You will dispute with the CRAs and they will do the boilerplate validation.  You try again.  Maybe two or three more times with the same results.  Then if you are up for the challenge to turf it to a consumer lawyer to sue them and the CRAs for the violations.  It is what I had to do.  My lawyer has already warned me that the law firm in my state that PRA uses to defend FDCPA and FCRA suits drags things out hoping you give up and go away.  

 

Until you can't be sued for the debt I would lay low.  It is just high enough that it would be worth the effort for them to sue.

[admin]

To start with bad debts are NOT factored. When a debt is factored the collateral on the debt is the account itself. We all know that a no company will extend credit on a bad debt. 

 

When they list it a factored on your CR they try to escape the reporting of certain accurate information required by the FCRA. I have made several posts on what a factored account is.

@BTO429 - What can you do to force them to not factor the debt?

[needsalittlehelp]

If the DOFD or DOLA is actually 11/2011 then you need to lay low on this one for a while on this one depending on your state.  The shortest SOL for filing a lawsuit is 3 years and that hasn't passed yet.  If you live in a state that has a 6 year SOL and no borrowing statute or worse OH with a 10 year SOL then you have a long way to go before you cannot be sued over this debt.

 

PRA does sue and the last thing you want to do is call their attention to you that the SOL is expiring and motivate them to file a lawsuit.  

 

Let me clue you in as to what will happen if the SOL passes and you have not been sued.  They will continue to break the law and report inaccurate information.  You will dispute with the CRAs and they will do the boilerplate validation.  You try again.  Maybe two or three more times with the same results.  Then if you are up for the challenge to turf it to a consumer lawyer to sue them and the CRAs for the violations.  It is what I had to do.  My lawyer has already warned me that the law firm in my state that PRA uses to defend FDCPA and FCRA suits drags things out hoping you give up and go away.  

 

Until you can't be sued for the debt I would lay low.  It is just high enough that it would be worth the effort for them to sue.

I believe SOL is 6 yrs in Michigan so i have a long ways to go

[needsalittlehelp]

@needsalittlehelp - Looks to me as if they sold it.  /

would the fact that the original OC reported last payment different days matter? when i pulled my CR in may of 2012 it was reported as 10/21/2011 and when i just pulled CR the other day lastpayment was 10/20/2011.

[willingtocope]

would the fact that the original OC reported last payment different days matter? when i pulled my CR in may of 2012 it was reported as 10/21/2011 and when i just pulled CR the other day lastpayment was 10/20/2011.

Probably not.  1 day isn't going to matter much, and if they have "updated" their reporting recently, they could claim they've "corrected" their data.

 

And, BTW, if I recall correctly, there are two different software packages that CAs can use to report data to the CRAs.  One (the older, cheaper one) only has a code for "factored account" and doesn't differentiate between "factored" and "collection".  Calling an account that is in default a "factored" account is misleading...and, if you were to sue for FDCPA violations, you could probably include this as misleading the "least sophisticated consumer"...but, in reality, all it really means is the OC has turned the account over to someone else to collect.

[Clydesmom]

I believe SOL is 6 yrs in Michigan so i have a long ways to go

 

YIKES!  I am in Michigan right now as well and thank the good Lord up above that the SOL on the debt PRA bought expired before I moved to this state so they cannot resurrect the debt here.  PRA definitely sues in MI and my recommendation would be not to mess with them until they can't sue you or the debt gets sold again.  

 

If you lose a suit against them in MI not only can they garnish wages but bank accounts and state tax refunds.  I would lay low for awhile, get quarterly copies of my CR showing they are falsely reporting then nail them to the cross when the SOL expires and they couldn't sue me.

[needsalittlehelp]

Probably not.  1 day isn't going to matter much, and if they have "updated" their reporting recently, they could claim they've "corrected" their data.

 

And, BTW, if I recall correctly, there are two different software packages that CAs can use to report data to the CRAs.  One (the older, cheaper one) only has a code for "factored account" and doesn't differentiate between "factored" and "collection".  Calling an account that is in default a "factored" account is misleading...and, if you were to sue for FDCPA violations, you could probably include this as misleading the "least sophisticated consumer"...but, in reality, all it really means is the OC has turned the account over to someone else to collect.

but i think it was sold to portfolio not turned over. the monthly spreedsheet thing on my credit report for the credit card only went up to 5/2013. both 5/2013 and 4/2013 both had the code PAL and >PRL< in the remarks boxs.theprevious months only had >PRL<   the thing at the top said PAL = purchased by another lender.  i didnt see that before and wasnt very clear when i tried to explain that here.

[BTO429]

@BTO429 - What can you do to force them to not factor the debt?

You cannot do any thing.

A factored account takes place between the OC and the factoring company. When a business needs cash flow NOW they go to a factoring company, who takes their credit accounts, THAT ARE IN GOOD STANDING, and makes them a loan for around 80% or so on the good accounts.

 

The account that is in good standing is used a collateral on the loan. When an account is paid by the consumer the loan from the factoring company for that account is paid in full.

 

The main point I am trying to get across is, when a junk debt buyer purchases an account that has been charged of to profit and loss becomes junk debt and it is in no way factored. When the report the account as factored on a credit report the have out and out lied. Now, if they factored an account to an oc and the consumer does not pay the OC the factoring company has rights of ownership to try and collect that account. They can then state the account was factored.

 

What a person who has a tl on their credit report that states factored or factoring company has to do iis prove whether or not the debt was purchased or the debt was transferred to the ca for collections. If the debt falls under one of the two then the debt was NOT factored. They have committed fraud, fcra, fdcpa and ucc violations, and some applicable state laws. When a debt is listed as factored they can put the date that they(the ca) took over the account as date of last payment. This is due to when the OC failed to pay on the debt which would be a different date than when the consumer failed to pay the OC. These dates could vary by several months or longer.

 

So when they state factored they lie about when the actual debt went into default. Lets say they buy a debt in 2013 that went delinquent in 2002, obviously past the SOL. What the ca's do is state factored debt or factoring company and they put the date of last activity as the date when they purchased the account, it resets the SOL window.

 

This is only one scenario they use when they state factored.

[admin]

When a debt is listed as factored they can put the date that they(the ca) took over the account as date of last payment. This is due to when the OC failed to pay on the debt which would be a different date than when the consumer failed to pay the OC. These dates could vary by several months or longer.

 

@BTO429 - So this is basically the date of last payment distinction that makes a difference in factoring.  That's the only reason you care. 

[BV80]

 

What a person who has a tl on their credit report that states factored or factoring company has to do iis prove whether or not the debt was purchased or the debt was transferred to the ca for collections. If the debt falls under one of the two then the debt was NOT factored. They have committed fraud, fcra, fdcpa and ucc violations, and some applicable state laws. When a debt is listed as factored they can put the date that they(the ca) took over the account as date of last payment. This is due to when the OC failed to pay on the debt which would be a different date than when the consumer failed to pay the OC. These dates could vary by several months or longer.

 

So when they state factored they lie about when the actual debt went into default. Lets say they buy a debt in 2013 that went delinquent in 2002, obviously past the SOL. What the ca's do is state factored debt or factoring company and they put the date of last activity as the date when they purchased the account, it resets the SOL window.

 

 

1.  If the JDB is showing a date of last payment that is accurate, they're not claiming the date of purchase as the date of last activity in order to restart the SOL.

 

2.  If the JDB's TL does not show a date of last activity or payment, they're not claiming any date for the purpose of resetting the SOL.

 

3.  A date on your CR does not verify the date of last payment or activity for the purpose of a debt collection lawsuit.

 

4.  The JDB's TL is going to be deleted when the OC's TL is deleted. 

[energizer]

@BV80

In reporting it accurately for a factoring company its a requirement that the date of last acitivity and date of first deliquency matches exactly? is that correct? any discrepancies in that date is grounds for what? dismissal in court, deletion from CRA or suing & winning FCRA/FDCPA violations.

[BV80]

@energizer

 

 

@BV80
In reporting it accurately for a factoring company its a requirement that the date of last acitivity and date of first deliquency matches exactly? is that correct? any discrepancies in that date is grounds for what? dismissal in court, deletion from CRA or suing & winning FCRA/FDCPA violations.

 

The date of first delinquency (DOFD) and the date of last activity are not necessarily the same.  Here's an example.

 

For years, you've made timely payments for the required amount on ABC account which have kept the account in a current status.  But due to unforeseen circumstances, you can no longer afford to make payments every month.

 

You miss a payment that was due on 2/15/2012.  The account has gone into default, and your CR shows a DOFD of 2/15/2012.   The next month you make a payment, but it's smaller that the required payment that would be necessary to make the current again.  You do this for the next 6 months.   Even though you're making payments, though small payments are not bringing the account to a current status.  It's still considered in default.  In August, you pay for the last time. 

 

Because you never brought the account current again, the DOFD will remain at 2/15/2012.  BUT the date of last activity or payment will be 8/2012. 

 

Does that make sense?

[energizer]

so u gotta have the last payment date even if its less than minimum due the DOFD doesn't change.But if you made higher than minimum due the DOFD does change? right?

[BV80]

so u gotta have the last payment date even if its less than minimum due the DOFD doesn't change.But if you made higher than minimum due the DOFD does change? right?

 

No the DOFD will not change.  The DOFD is the date you were first delinquent on a current account.   If you bring a defaulted account current, the DOFD will not change unless you're late or miss a payment again. 

 

Using the same example above, on 2/15/2013 you miss a payment, and that date becomes your DOFD.  After that, you make the required minimum payment or higher, and ABC company considers the account to be current again.  

 

For the next 6 months, you make timely payments in the required amount.  The DOFD remains the same.  However, in September, you're late or miss the payment.   Because the account had been made current again, that late payment now creates a new DOFD.  The new DOFD would be 9/2013.

[willingtocope]

Just to clarify (or further confuse) the DOFD is the date on which the account was first considered delinquent AND never brought current.  So...if you skipped a couple payments, and then made all outstanding payments to bring the "amount due this month" up to date, and then missed the next payment, the DOFD would move forward.

[BTO429]

 

 

@BTO429 - So this is basically the date of last payment distinction that makes a difference in factoring.  That's the only reason you care. 

 

No the reason I care is the fact that no court has set a clear definition as to what factoring is. Collection agencies all seem to define factoring in their own way. The reasons they claim an account was factored is first they can report it as an open account on your credit report, even if the debt is ancient.

 

Factoring occurs between the factor and the OC, no third parties are involved. So when a debt is bought that you know has changed hands more than once it was not factored. When a third party debt collector says they own it it was not factored, even though the ca defines them self as a factoring company. If the OC has long charged off and sold the account is was not factored.

 

Some debt jdbs have started using the term factoring company to misconstrue the real character of the debt. We all know when a bad debt belongs to the oc and they sell it it is nothing more than debt selling and purchasing. But some ca's consider it factoring, when in the true meaning of business financing it is not.

 

They call it agency factoring where the ca works on behalf of the OC and the oc still owns it, but we all know this is not the true definition. As I have said before the only way you can know if the debt was truly factored is to examine the contract between the OC and the factor.

 

A non recourse agreement means the factor(ca) has no recourse against the OC if the debt defaults. When a default occurs in this situation the factor now owns the debt. If it is a recourse agreement it means the factor has recourse against the OC and the factor does not own the debt, the OC retains ownership.

 

In the real world of business financing the debt is held by the factor as collateral and if a default occurs it is up to the factor to attempt collection. When a debt is factored, normally, a loan for around 85% is made against the debt to the OC so the debt must be in good standing. When a debt is oput right bought it is not factoring it is simply debt purchasing.

 

CA's that call themselves factoring company hide behind this when they buy debts. They try to claim it was factored when it was not.

[nascar]

No the reason I care is the fact that no court has set a clear definition as to what factoring is. Collection agencies all seem to define factoring in their own way. The reasons they claim an account was factored is first they can report it as an open account on your credit report, even if the debt is ancient.

 

I don't have any facts to support my opinion, but I suspect the algorithms used by the credit reporting agencies place more weight on a delinquent "factored" account than other available account designations. There are few, if any, things a debt collector does that is not intended to cause as much damage to the consumer as possible. Reporting collection accounts in a way that has more negative impact on the consumer's credit score would seem to be one of those things.

[BV80]

The reasons they claim an account was factored is first they can report it as an open account on your credit report, even if the debt is ancient.

 

It depends upon how "open account" is being reported.  To report an account as open based upon "type of account" is not a problem.  It's the "status" that counts.  If a JDB reports the status of a closed debt as "open", that is illegal.  Some people confuse the terms "type of account" and "status".

[BTO429]

It depends upon how "open account" is being reported.  To report an account as open based upon "type of account" is not a problem.  It's the "status" that counts.  If a JDB reports the status of a closed debt as "open", that is illegal.  Some people confuse the terms "type of account" and "status".

This is the practice I am trying to get across. Since they claim they are a factoring company and the debt was factored they try to hide the real facts. They report a charged off soled debt as an open account because they claim it was factored when in reality it was nothing more than a purchased debt.

 

What a person would have to do is prove in court whether the debt was factored before it became delinquent, they would also have to prove that the debt was not factored. The easiest way to prove this is to ask for the contract between them and the OC. we know they will not want to give this up, but if there was no contract then the debt was not factored.

 

In a court the parties’ intentions to accomplish a true sale, rather than a loan, must be expressed in the transaction documents. A court will examine the substance – rather than the form – of the transaction. Documentation that describes a transfer as a sale but that also contains indicia of a loan will not support a true sale.

 

Legally you can’t sell what you can’t identify. Accounts receivables transferred in a true sale must be identified with specificity, and if a party other than the factor is servicing the accounts receivable, the collections of such accounts should be segregated in a special collection account and not co-mingled with the servicer’s other funds. A notification of the transfer sent to the account debtors would also be proof of a true sale.

 

Some case law

Major’s Furniture Mart, Inc. v. Castle Credit Corp., 602 F.2d 538 (3d Cir. 1979) (holding that the factor did not take on the risks of a true sale as a result of, among other things, the factor’s high level of recourse to the seller and its description of its advances in a side letter as loans under a line of credit accruing interest)

 

Reaves Brokerage Company, Inc. v. Sunbelt Fruit & Vegetable Company, Inc. et al., 336 F.3d 410 (5th Cir. 2003) (holding that the combination of a factor’s excessive recourse, discretionary advances and reserves, among other things, meant that its relationship with the seller was not a true sale) (the court’s holding in this case is expressly limited to the facts and arguments presented in the case).

 A couple more cases that I need to review

Amcor, Inc. v. CIT Group/Commercial Services, Inc.

 

Nickey Gregory Co. v. AgriCap, LLC, a 2010 decision by the United States Court of Appeals for the Fourth Circuit which re-characterized a factoring transaction as a secured borrowing rather than a “true sale” of accounts.

 

In the Nickey case the court stated "the so-called factoring agreement is the functional equivalent of a secured lending agreement." Whether the agreement is a secured loan or a true purchase of receivables turns on whether there was an actual transfer of the risk of loss. A transfer of risk occurs when the account seller's debt is extinguished, and the account purchaser's "risk with regard to the performance of the accounts is direct." The court in Reaves explained that the parties had "confected" a secured loan or revolving line of credit, rather than a true sale of assets, through a percentage advance subject to the lender maintaining a reserve in any amount the lender deemed appropriate.

 

Endico Potatoes, Inc., 67 F.3d at 1069. The determination of whether there was a true purchase of receivables requires a review of the substance of the parties' relationship, and all terms and provisions of the Agreement, without regard to how the transaction is labeled.

 

A & J Produce Corporation v. Bronx Overall Economic Development Corporation, 542 F.3d 54, 58 (2d Cir.2008), the court held, in a case where the parties disputed whether the transaction was a purchase or a secured loan, that the court must first analyze the risk of loss. The Second Circuit also stated that it was "necessary . . . to first determine the substance of the transaction by analyzing the transfer of risk involved, in order to resolve whether the lien constituted a purchase for value or merely a security interest.

[needsalittlehelp]

now im even more confused lol