Sweet_T

Collection - open to closed after dispute

Recommended Posts

I received the results from my TU dispute 7/15/2017 in which a medical COLL ACCT was "verified."   I decided not to take my next step until after my EQ dispute closes next week.

Yesterday (4 days after TU dispute closed), this same medical COLL ACCT was changed by the CA from "open" to "closed", so I first assumed it meant they have given it back to the OC or have sold the debt to another CA, however, it's still showing the full balance owed. Can someone tell me why this is?

Share this post


Link to post
Share on other sites

"Open" vs. "Closed" on a collection account is mostly meaningless in terms of whether or not the CA still owns the account.

What was the reason you gave for the dispute? 

Share this post


Link to post
Share on other sites

My understanding was that if their right to collect has been terminated, they must close the account and stop reporting. Is that not correct?

Share this post


Link to post
Share on other sites

That's correct (mostly, see * below), but what I'm saying is "Open" or "Closed" on your credit report is not necessarily indicative of the actual collection status of the account.  The reason I say that is because the guidelines for credit reporting say that a collection account is supposed to be reported as "Open", but some consumers have sued collection agencies for reporting "Open" on an account that has been closed with the original creditor.  It could be that the CA in your case is thinking you may be disputing the open/closed status of the account and have just set it to "closed" to try to preclude you from suing them.  But as I said, the guidelines say they should report it as "Open".  So it's a case of damned if they do, damned if they don't.  And that's why I asked what specifically you disputed.  I wanted to see if there was something about your dispute that they were having a knee-jerk reaction to.

* As far as reporting a "closed" account, any data furnisher can continue to update any account every month, so long as they report it correctly (open, closed, sold, $0 balance, etc).  Capital One reports charged off, and even sold, debts every month for 7 years.  I don't think I've ever seen a CA continue to report a closed/sold collection account, but legally they could as long as the info they report is accurate.

Share this post


Link to post
Share on other sites
1 hour ago, Sweet_T said:

My understanding was that if their right to collect has been terminated, they must close the account and stop reporting. Is that not correct?

Returning the account to the OC means the CA can no longer update each month.   However, that does not mean the entry will be removed from your CR.   It just won't be updated anymore.

Share this post


Link to post
Share on other sites

What has thrown me off is that they did it after the TU dispute had closed. Further, I guess since my EQ has until Wed to close my dispute, that's why EQ still shows it as "open"? I'm starting to brace myself for a double-whammy for exercising my right to dispute with the CRAs.

Share this post


Link to post
Share on other sites
9 hours ago, Sweet_T said:

My understanding was that if their right to collect has been terminated, they must close the account and stop reporting. Is that not correct?

No it isn't correct.  NOTHING requires they delete the trade line simply because they are not longer managing the account for the OC.

Despite what you read on other sites about a "magic" method that will remove collections it is NOT based in fact.  The reason some medical collections get deleted when a consumer disputes them is because some providers use smaller collection agencies that do not have time or resources to respond to disputes.  When the CA does not respond (and updating the account IS a response) the CRA must delete the trade line.  For many years smaller CAs would simply not respond at all when they were no longer contracted to collect resulting in the trade line deletions on disputed accounts.  However, the climate has changed and most have educated themselves on the law(s) and that is no longer guaranteed to work.

8 hours ago, Sweet_T said:

What has thrown me off is that they did it after the TU dispute had closed. Further, I guess since my EQ has until Wed to close my dispute, that's why EQ still shows it as "open"? I'm starting to brace myself for a double-whammy for exercising my right to dispute with the CRAs.

What displays on your report is not necessarily "real time" information.  They most likely updated the account with TU but by the time the information updated and reached you technically it was after the time frame for them to respond on your chronological clock but their actual response was timely.   It is possible it does come off EQ because it is expensive to belong to the bureaus to report so it is not uncommon for smaller agencies to only belong to one of the three.  If they are no longer a member of EQ the trade line could be deleted if they don't respond.

Share this post


Link to post
Share on other sites

But I didn't say they had to delete it. They do however have to stop reporting on it every month. My understanding is that, should they sell the debt, they close the account and change the balance to $0 as they no longer have collection authority. Time will tell with this one.... right now I'm planning to wait until EQ finishes my dispute this week. If it comes back validated, I'll DV and go from there. It'll be interesting to see whether they change the status of the EQ TL also.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.