LaneBlane

Removing a $7,500+ Collection from Reports - Submitting "Paid in Full" Document

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I had a collection account added to my credit reports more than a year ago by a JDB I'm currently in arbitration with.  (The case is currently stalled and isn't before an arbitrator yet.)  It involves a few business loans I personally guaranteed, so the trade line was added to my personal credit.  Because this involves commercial debt, it's my understanding that it's not subject to FCRA violations.

Each month the JDB increases the balance.  Right now it's more than $7,500.  According to my accounting, if any balance remains, it's less than $400.  Also, I captured and printed a loan history from the OC's website that says all my loans have been "Paid in Full."

Due to the collection, my FICO score plummeted from the 700s to the low 600s.  As a result, I wasn't able to obtain a operating loan for my business after my last loan was paid in full.  This has had an impact on my ability to purchase inventory, especially during the slow months of winter we're just getting through.

I've disputed this trade line at least two times with no luck.  Therefore, I wanted to ask the community if there was a "best practice" to send documentation to the CRAs to support a dispute.  I thought about sending the CRAs a copy of the screen shot from the OC's website that shows my loan accounts have been paid in full.  If I included a notarized affidavit that verifies where and when the information was captured, do I stand a snowball's chance in having this accepted as sufficient proof to support my dispute? 

Any suggestions would be appreciated.  Thanks!

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It's the FDCPA that is not applicable to business lines of credit. The FCRA remains in full effect for anything that shows on a personal report. A creditor doesn't get a free pass to inaccurately poison a consumer report just because the debt is a business debt. 

Think about it this way. Say ACME Manufacturing slapped a personally guaranteed business debt on the personal credit report of their customer "Tom Jones",  except they get the wrong Tom Jones. If the FCRA was not applicable to business debts, the wrong Tom Jones could never get his credit report corrected.

If the CRAs are repeatedly coming back verified, I'd be contacting a couple consumer lawyers. 

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42 minutes ago, Harry Seaward said:

It's the FDCPA that is not applicable to business lines of credit. The FCRA remains in full effect for anything that shows on a personal report. A creditor doesn't get a free pass to inaccurately poison a consumer report just because the debt is a business debt. 

Thanks for clarifying this.  It's good to know I can hold them accountable for FCRA violations.

 

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There's a section titled Commercial Transactions toward the top of this article that more fully defines a consumer report vs. commercial report. It's the report itself that may or may not be considered one or the other, but the info contained therein is always subject to the FCRA because that info is provided whenever a consumer report is obtained.

https://www.infolawgroup.com/2011/07/articles/fcra-and-facta/cfpb-tasked-with-fcra-interpretation-ftc-issues-staff-report-to-aid-transition/

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10 hours ago, LaneBlane said:

Due to the collection, my FICO score plummeted from the 700s to the low 600s.  As a result, I wasn't able to obtain a operating loan for my business after my last loan was paid in full.  This has had an impact on my ability to purchase inventory, especially during the slow months of winter we're just getting through.

This is where you have a problem.  While furnishers are required to provide accurate information, credit reports obtained for business purposes are not considered to be "consumer reports".   Therefore, the credit reports obtained to determine your eligibility for a business loan were not "consumer reports".

"Numerous courts have concluded that the FCRA does not cover reports used or expected to be used only in connection with commercial business transactions." Hall v. Phenix Investigations, Inc., No. 15-10533, 2016 WL 1238602, at *3 (5th Cir. Mar. 29, 2016) (unpublished) (collecting cases); see also Ippolito v. WNS, Inc., 864 F.2d 440, 452 (7th Cir. 1988) ("In enacting the FCRA, Congress sought to regulate the dissemination of information used for consumer purposes, not business purposes."); Matthews v. Worthen Bank & Tr. Co., 741 F.2d 217, 219 (8th Cir. 1984) (noting that the "[FCRA] was intended to apply only to reports which relate to the consumer's eligibility for personal credit or other commercial benefits as a consumer, and not to the consumer's business transactions" (citation omitted)).

If you are from MN, pay attention to the 8th Circuit's ruling.

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14 minutes ago, BV80 said:

This is where you have a problem.  While furnishers are required to provide accurate information, credit reports obtained for business purposes are not considered to be "consumer reports".   Therefore, the credit reports obtained to determine your eligibility for a business loan were not "consumer reports".

Aside from a business loan, I didn't qualify for a personal loan to help me float my personal expenses so I could direct more business revenue to inventory.  Winter was rough.  Fortunately, we're starting to come out of our slow season.

Does anyone know how likely it is for the CRAs to accept documentation to support a dispute?  The clearest evidence I have of a zero balance is a printout from the OC's website.  (It's a screen shot of the entire website page.)  I don't know if attaching a notarized affidavit to this would make it slightly more than worthless.

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4 hours ago, LaneBlane said:

Aside from a business loan, I didn't qualify for a personal loan to help me float my personal expenses so I could direct more business revenue to inventory.  Winter was rough.  Fortunately, we're starting to come out of our slow season.

Does anyone know how likely it is for the CRAs to accept documentation to support a dispute?  The clearest evidence I have of a zero balance is a printout from the OC's website.  (It's a screen shot of the entire website page.)  I don't know if attaching a notarized affidavit to this would make it slightly more than worthless.

I think denial of a personal loan would be a different story.   Read 1692n and 1692o of the FCRA.  If you can prove willfulness on furnisher's part, you can recover any actual damages you suffered.

In regard to the screenshot, does the OC's website still show a zero balance?  I don't know how reliable screenshots are.

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3 hours ago, BV80 said:

In regard to the screenshot, does the OC's website still show a zero balance?  I don't know how reliable screenshots are.

The screenshot from the OC's website includes a list of loans with loan numbers and loan dates.  The status for each loan is "Paid in Full."

I thought a screenshot would be more reliable than cutting and pasting the loan history on its own because the screen shot includes the url of the page, as well as the date and time in the lower-right corner.

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21 hours ago, LaneBlane said:

Therefore, I wanted to ask the community if there was a "best practice" to send documentation to the CRAs to support a dispute.

Best practice is an actual paid statement or receipt. In my opinion I put chances of a screenshot working at slim to none with a heavy favorite on the none.  The screenshot is not an actual document it is merely something you do not generated by the creditor showing PIF.  

Does the creditor website allow you to log in and print a final statement for each loan?  If so, do that and send those showing the account(s) are paid.

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1 minute ago, Clydesmom said:

Does the creditor website allow you to log in and print a final statement for each loan?  If so, do that and send those showing the account(s) are paid.

Unfortunately not.  The best I'm able to do is a list of my loans that all say "Paid in Full."  It's a screen shot of the entire web page, including the top navigation and company logo.  It looks official, but I'm also afraid it won't get me very far.

Thanks for your input!

 

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On 4/24/2018 at 9:50 AM, Harry Seaward said:

There's a section titled Commercial Transactions toward the top of this article that more fully defines a consumer report vs. commercial report. It's the report itself that may or may not be considered one or the other, but the info contained therein is always subject to the FCRA because that info is provided whenever a consumer report is obtained.

https://www.infolawgroup.com/2011/07/articles/fcra-and-facta/cfpb-tasked-with-fcra-interpretation-ftc-issues-staff-report-to-aid-transition/

That link was a tremendous help, Harry.  Thank you.

The article says...     the purpose of the FCRA "is to protect consumers from inaccurate or arbitrary information in a consumer report which is used as a factor in determining an individual's eligibility for credit, insurance or employment" and the FCRA "does not apply to reports used for business, commercial or professional purposes."  It appears the FCRA applies to all information reflected on a consumer credit report.  It does not apply to commercial CRAs such as Dun & Bradstreet.

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16 minutes ago, LaneBlane said:

That link was a tremendous help, Harry.  Thank you.

The article says...     the purpose of the FCRA "is to protect consumers from inaccurate or arbitrary information in a consumer report which is used as a factor in determining an individual's eligibility for credit, insurance or employment" and the FCRA "does not apply to reports used for business, commercial or professional purposes."  It appears the FCRA applies to all information reflected on a consumer credit report.  It does not apply to commercial CRAs such as Dun & Bradstreet.

Read the case law I cited.  Also, pay attention to the following from the link cited by @Harry Seaward.

"To be considered a consumer report, information communicated by a CRA must bear on a consumer’s credit worthiness, standing, or capacity, character, general reputation, personal characteristics, or mode of living. Additionally, the information must be used or expected to be used to establish the consumer’s eligibility for credit or insurance to be used primarily for personal, family, or household purposes, employment, or other purposes specifically identified in the FCRA. One point of contention has been whether and how the FCRA applies in the context of an application for business credit as opposed to personal credit. Creditors will often obtain a credit report on the sole proprietor or other principal of a business and use the report to determine whether to extend credit to the business. It was the FTC’s position in the 1990 Commentary that “a report on a consumer for credit or insurance in connection with a business operated by the consumer is not a consumer report.” Courts have held that the purpose of the FCRA “is to protect consumers from inaccurate or arbitrary information in a consumer report which is used as a factor in determining an individual’s eligibility for credit, insurance or employment” and the FCRA “does not apply to reports used for business, commercial or professional purposes.” For example, in Wrigley v. Dun & Bradstreet, Inc. a commercial reporting service issued credit reports to subscribers who used the information when deciding whether to extend commercial credit to a construction company. The reports contained the personal financial information of the construction company’s president. The court held that the credit reports were for the extension of commercial credit – even though the reports contained personal credit information – therefore the FCRA did not apply."

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5 minutes ago, BV80 said:

"To be considered a consumer report, information communicated by a CRA must bear on a consumer’s credit worthiness, standing, or capacity, character, general reputation, personal characteristics, or mode of living. Additionally, the information must be used or expected to be used to establish the consumer’s eligibility for credit or insurance to be used primarily for personal, family, or household purposes, employment, or other purposes specifically identified in the FCRA.

The account was added to my consumer credit report as a collection, so it's making a huge impact on how anyone sees my personal credit worthiness.  With a score so low, my interest rates would be sky high if I applied for a personal credit card or an auto loan.  I may not even qualify.

I've had my credit limit on one of my cards reduced by $800. I've also received a notice from my home/auto insurance company saying I didn't qualify for certain discounts because of information contained on my credit reports.

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10 minutes ago, LaneBlane said:

The account was added to my consumer credit report as a collection, so it's making a huge impact on how anyone sees my personal credit worthiness.  With a score so low, my interest rates would be sky high if I applied for a personal credit card or an auto loan.  I may not even qualify.

I've had my credit limit on one of my cards reduced by $800. I've also received a notice from my home/auto insurance company saying I didn't qualify for certain discounts because of information contained on my credit reports.

I agree that it's a factor as to any personal credit for which you might apply. 

Is the entry correct?   The issue is proof.  Can they prove you owe the balance?   Can you prove you don't owe it?

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19 minutes ago, BV80 said:

I agree that it's a factor as to any personal credit for which you might apply. 

Is the entry correct?   The issue is proof.  Can they prove you owe the balance?   Can you prove you don't owe it?

Thanks for your help, BV80.

The entry isn't correct.  The JDB keeps increasing the amount each month.  Right now we're in the beginning stages of arbitration.  (The retainer fee hasn't been paid yet.)  According to the schedule of loan fees in several contracts, I was overcharged by around $1,500.  They piled on a lot of late fees and interest.  I also have records of payments I made that weren't in the JDB's accounting.

The FCRA violations I've written down include:

  • Re-aging the accounts.
  • Continuing to supply information to a CRA that it knows (or should know) is inaccurate.
  • Misstating the balance due.
  • Failure to notify the CRAs involved that I dispute the debt.
  • Failure to conduct an internal investigation of my dispute within 30-days.
  • Failure to notify me when it supplied negative credit information to a CRA.

Because the JDB hasn't provided sufficient documentation showing they own the accounts in question, this may also be a violation.  (No standing to add the trade line.)

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36 minutes ago, LaneBlane said:

The JDB keeps increasing the amount each month. 

That would depend upon your state laws or court rulings.  

 

Quote

Re-aging the accounts.

What are youj determining to be "re-aging"?

The rest of your allegations would be for you to prove.

 

36 minutes ago, LaneBlane said:

Because the JDB hasn't provided sufficient documentation showing they own the accounts in question, this may also be a violation.  (No standing to add the trade line.)

They don't have to prove "standing" right now.  All they have to show is that the entry is correct.   The entry would be based upon the information they received from the OC and laws regarding interest and whether or not they are entitled to claim interest on a debt.

That would be an allegation you would make.   In court, it would depend upon their proof.   If they provided an affidavit from the OC, they'd prove standing.

I'm not saying that you don't have a case against them, but you have some work to do.

 

 

 

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1 minute ago, BV80 said:

What are youj determining to be "re-aging"?

The "Opened Date" that appears on my reports is after the date on which they claim to have purchased the account from the OC.

2 minutes ago, BV80 said:

If they provided an affidavit from the OC, they'd prove standing.

I've seen their chain of ownership documents.  I can't go into detail about them in an open forum.  There are no affidavits.

5 minutes ago, BV80 said:

I'm not saying that you don't have a case against them, but you have some work to do.

Now that I know this trade line isn't exempt from the FCRA, I feel much better.   Nothing is easy.  I'll see what I can put together.

Thanks again!

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6 minutes ago, LaneBlane said:

The "Opened Date" that appears on my reports is after the date on which they claim to have purchased the account from the OC.

That's the date the account was opened in the JDB's files and has no effect on the date you opened the account with the OC.

The date you opened the account with the OC is the date that matters,  The 7-year reporting period is based upon the OC's provided date.   Refer to 1681c(c) of the FCRA.  Once the SOL has passed for credit reporting, both the OC's and JDB's entries will disappear.

10 minutes ago, LaneBlane said:

I've seen their chain of ownership documents.  I can't go into detail about them in an open forum.  There are no affidavits.

That doesn't mean they wouldn't be able to provide more proof either in court or arbitration.   Outside of court, they might provide as little as necessary.

I'm not saying you're wrong.  What I am saying is that you may need more than is currently in your possession.

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3 minutes ago, BV80 said:

I'm not saying you're wrong.  What I am saying is that you may need more than is currently in your possession.

I completely understand.  At least I know what I'm up against.

 

 

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10 minutes ago, LaneBlane said:

I completely understand.  At least I know what I'm up against.

 

 

I'm not expert, especially when it cones to arbitration.  You might want to speak to an attorney.

Good luck!

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@LaneBlane 

"This article explores the broad scope and expansive reach of the FCRA. Part I describes the various individuals and entities that fall within the FCRA’s reach. Part II illustrates the potentially staggering damages that may result from an FCRA violation. Part III then explores some of the common claims that typically are asserted against employers and CRAs. Part IV explains the emerging scrutiny on furnishers of consumer information."

https://www.americanbar.org/publications/blt/2016/06/13_anthony.html

"The FCRA provides for statutory damages in the amount of $100 to $1,000, but plaintiffs must first prove a willful violation. Based on an analysis of the statutory construction of the term “willfully” in the FCRA, the U.S. Supreme Court in Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007), defined “willful” to include reckless disregard of a statutory duty. The court then defined “reckless” as an “action entailing an unjustifiably high risk of harm that is either known or so obvious that it should be known,” and further explained that, “t is this risk of harm, objectively assessed that is the essence of recklessness at common law.” The court summarized its holding as follows: “[A] company subject to FCRA does not act in reckless disregard of it unless the action is not only a violation under a reasonable reading of the statute’s terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless.” The court’s ruling thus raised the bar for a plaintiff to prove reckless disregard because evidence of a defendant’s subjective bad faith is no longer determinative; rather, courts will apply an objective lens when considering a defendant’s actions.

Although many class-action plaintiff claims hinge on this statutory damages clause, the future of such damages remains questionable after the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, 194 L. Ed. 2d 635 (2016). In Spokeo, Robins sued the “people search engine” for alleged violations of the FCRA. Specifically, Robins alleged that Spokeo published inaccurate (though not harmful per se) information about him, including that Robins had a graduate degree and was married and had children. At issue on appeal was the fact that Robins’s complaint alleged only statutory violations and no physical injury in fact. Spokeo argued that this statutory violation alone was insufficient to confer Article III standing because it did not meet the “irreducible constitutional minimum” to establish standing, which requires a plaintiff to have suffered an injury in fact by sustaining an “actual or imminent” harm that is “concrete and particularized.”

The district court originally dismissed the case, holding that Robins failed to allege any injury-in-fact and, therefore, did not have Article III standing. The Ninth Circuit reversed, holding that the alleged violation of Robins’s statutory rights alone is sufficient to satisfy Article III’s injury-in-fact requirement, regardless of whether the plaintiff can show a separate actual injury. On May 16, 2016, the U.S. Supreme Court issued its much-anticipated decision, vacating and remanding the decision of the Ninth Circuit.

Justice Alito delivered the 6–2 decision, with the majority holding that the Ninth Circuit’s injury-in-fact analysis was “incomplete” because it “focused on the second characteristic (particularity), but it overlooked the first (concreteness).” According to the court, “a ‘concrete’ injury must be ‘de facto’; that is, it must actually exist.” Through its analysis, the court indicated that a technical violation is not enough to create particularized, concrete harm. The court specifically determined that: “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Rather, “Article III standing requires a concrete injury even in the context of a statutory violation.” The court thus held that “Robins cannot satisfy the demands of Article III by alleging a bare procedural violation.” The court remanded with instructions to the Ninth Circuit to decide “whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement.”

Although Spokeo is an FCRA decision, the ruling undoubtedly will have broad implications across all types of consumer lawsuits. The decision will continue to engender arguments as to whether a named plaintiff has alleged a sufficient “concrete” injury to give rise to constitutional standing. Given the number of individual and class-action lawsuits that were stayed pending the court’s decision, it is expected that many lower courts will soon flesh out the contours of Spokeo."

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