Consumers enjoy a wide range of protections under the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). However, debt collection agencies continually push the boundary between what is legal and illegal. One practice that straddles the line is called re-aging.
Re-aging debt can be a good thing for consumers. However, it can also be an illegal act designed to benefit a debt collection agency. In this article, you can gain an understanding of what re-aging is and how it works both legally and illegally. Also, you can learn about what to do if you suspect something’s not quite right with your debt.
What Is Re-Aging Debt?
Re-aging is the process of changing the dates in relation to your debt. It’s all about the date of the delinquency (when you first went delinquent with the account). For instance, you could have a debt that was originally past due in September 2019. However, when re-aged, the debt could show a delinquency date of September 2020.
Re-aging is just one name that this process goes by. You may hear it called a “rollback”. It’s also called “curing.” Both refer to the same process.
Why Is Re-Aging Done at All and Is It Legal?
Yes, re-aging is legal (in some cases). It is supposed to be used to help consumers, but unethical, predatory debt collection agencies have found a way to transform this beneficial tool into a weapon that can be used against you.
What Is Legal Re-Aging?
Legal re-aging, also called positive re-aging, is a beneficial thing that can help you improve your credit score and eliminate black marks from your credit history. Let’s say you have a debt and miss payments on the account for a couple of months. Positive re-aging would work like this:
Step 1: You work directly with your creditor to create a repayment plan.
Step 2: You make your payments on time.
Step 3: As part of the plan, your creditor agrees to re-age the account, moving it forward so that it can be marked “paid in full”.
While the process usually requires some additional steps, like working with a credit counselor, you can see the benefit of re-aging in this situation. Who wouldn’t want to uphold their financial obligations and, in return, have a delinquency wiped off their credit history?
What Is Illegal Re-Aging?
Illegal re-aging, or negative re-aging if you prefer, is something else entirely. It’s a downright sinister, amoral act that deprives consumers of the very protection offered by statutes of limitation. Here’s how this sort of situation plays out:
- Your original creditor sells your debt to a debt collection agency.
- That agency pays just pennies on the dollar for your debt.
- It will then re-age your debt and push the date of delinquency forward to achieve one of two goals:
- First, it’s to make the debt look newer, rather than an older debt. Newer debts have more impact on your credit than older ones do.
- Second, it could be done to get around the statutes of limitation on debt and provide the collection agency more time to collect, even though the debt should not be legally collectible.
Negative re-aging is a horrifying practice that is unfortunately widespread in the debt collection industry. The problem is that consumers often find it very hard to spot signs of re-aging and even if they feel that something is wrong, they are unsure what they can do about it.
The sad truth is that if your account has been re-aged illegally, there is very little that you can do that will provide immediate relief.
That’s particularly true if you’ve already started paying the debt collection agency on a re-aged debt because your payment renews the debt’s life – it gets another three to seven years just because the collection agency tricked you into making a payment.
What to Look for if You Think Something’s “Off”
You’re having a good day when you go to check the mail. Amongst the sales flyers and bills, there’s an envelope that you don’t really recognize. Opening it, you find it’s from a debt collector about something that you had completely forgotten about.
The debt collector is demanding repayment of something that you could have sworn should have fallen off your credit report by this point. Confused, you check the information that the debt collector is required to send you – the original creditor’s name, the amount due, and the date of delinquency.
That’s strange, you think. Wasn’t that date different? You’re almost positive it was, but it’s been so long that you can’t be sure. Confused, you chalk it up to bad memory and resolve to set the situation right.
What Debt Collectors Consider Before Re-Aging Your Debt
That’s where they get you, those predatory collection agencies. There is an art to what they’re doing, and some of the brushstrokes look like this:
- The debt has to be decently sized or there’s little point in going after it. After all, the reward has to match the risk.
- The debt has to be old enough that the consumer has probably forgotten when it went delinquent, exactly, although the sight of the original creditor name will probably jog the memory enough that they realize it is their debt and not someone else’s.
- The re-aged date of delinquency is usually very similar to the previous one – the year might be changed, but probably not the month. This makes it easier for their fraud to slide under the radar.
What To Do if Something Seems “Off”
It can be confusing to spot re-aged debt. Collection agencies are often very good at what they do. If you feel that something is “off” about a debt collector’s letter or phone call, here’s what you need to do:
Immediately write a letter to each credit bureau. You should ask for the following information. Also, be prepared to submit a small fee per bureau for processing.
Ask for the account name and number, the delinquency date, and the name of the agency initially reporting the date of the first delinquency (or non-payment). You will also need to ask for the Fair Credit Reporting Act (FCRA) compliance date. This date will tell you when the account first became past due and no other payments were made.
Here’s a simple summary of what to ask for:
- Account name and number
- Delinquency date
- Name of agency initially reporting non-payment
- FCRA compliance date
Once the information arrives, compare it to that in the collection letter or the information that was provided to you by a collection agent over the phone. The dates should match. If the collection agency’s date is different, your account has been re-aged.
In no case should you pay this debt. Doing so could legitimize it and it will affect the statute of limitations on the debt. If the collection agency attempts to use high-pressure tactics, report them to the FTC and/or refer them to your lawyer if you have one.
5 Steps You Can Take if Your Debt is Re-Aged
If you suspect (or know for a fact) that your debt has been re-aged, there are several things that you can do. However, understand that it’s important that you are vigilant about your credit at all times.
Keep a close eye on your credit history and get your free credit reports each year. It’s highly recommended that you store a copy of the previous year so you can watch for underhanded tactics like debt re-aging.
Step 1: Know the Age of Your Debt
If you have been keeping an eye on your credit report, or you remember when the debt in question first went delinquent and the debt is outside the statute of limitations, do not pay.
Of course, it can be challenging to determine the original date. To find out that date, you will want to find the last date of activity for the account in question. After looking at your state’s statute of limitations on debt, add the number of years to the date of last activity.
After taking these steps, you should end up with the original date. If the debt collections agency has a different date, you will know the debt has been re-aged. You can simply inform the debt collection agency that the debt is outside the statute of limitations and then send them a cease and desist letter via certified mail. Make sure you keep the receipt in case the agency tries again.
Step 2: Consider Disputing the Debt
All three credit bureaus allow you to dispute debts. Use this to your advantage. If you haven’t already, pull your credit report from all three credit bureaus. With that information in hand, you should be able to compare the date of first delinquency on the debt as reported by the original creditor and the date as reported by the collection agency.
If you spot signs that the debt has been re-aged, file a dispute letter with each credit bureau that shows the debt on your report. You’ll need to provide them with documentation proving that the debt is outside the statute of limitations, but with time and a little patience, you should be able to have the debt wiped away completely.
Step 3: File with the FTC and Other Agencies
The Federal Trade Commission (FTC) is responsible for protecting consumers from predatory organizations, and that includes debt collectors willing to break the law and re-age accounts.
If a debt collector has re-aged your account illegally, file a complaint with the FTC. You should also file with the Consumer Financial Protection Bureau, as well as your state’s attorney general’s office.
Note that complaints are not the same as bringing criminal charges and may not result in immediate action, but they do provide these agencies with important information that can eventually be used against the debt collection agency. When enough complaints are filed, an investigation will be launched and, hopefully, the agency will be shut down.
Step 4: Be Prepared for Legal Action
You can (and should) file disputes and complaints if your debt has been re-aged, even if it is still within the statute of limitations according to the original delinquency date. However, if it is still legal to collect the debt, you can probably expect the collection agency to sue you. It’s always wise to have an attorney for these situations.
Step 5: Watch for Other Illegal Actions
Debt collection agencies willing to stoop to illegally re-aging your account will likely take other illegal actions in pursuit of your money. Watching for these can help clue you in that the agency isn’t on the up and up and that any information they provide is likely inaccurate at best.
For instance, if the debt collector is calling you before 8 AM or after 9 PM, if they are calling you at work, or if they are calling with the intent to harass you (multiple calls all day and night), they are breaking the law.
If the debt collector attempts to contact you at work, calls your employer directly or communicates with anyone else about your debt in any way, they are breaking the law. This includes your spouse and/or any other co-debtors.
If the debt collection agency requests anything other than your location from a third party, they are breaking the law. They cannot mention your debt in any way.
If a debt collector calls you and impersonates a police officer, a court officer, or anyone they are not, they are breaking the law.
If a debt collector calls you after you tell them that you want to communicate only by mail, they are breaking the law.
If a debt collector continues calling and communicating by mail even after you refer them to your attorney and state that all communication should go through that office, they are breaking the law.
These are just a few of the ways that collection agencies routinely break the law in pursuit of money. Get familiar with the protections offered under the Fair Debt Collection Practices Act (FDCPA) so that you can spot these issues more easily. You do have rights and there are laws in place to prevent agencies from taking advantage of you.
Takeaway
Debt can be crippling in its own right. When you throw unethical debt collection agencies into the mix, it can become incredibly hard to bear. Re-aging is an illegal act unless it is something undertaken between you and the original creditor to improve your situation.
Pay close attention to your credit report. If a debt collection agency claims that you owe something and the date does not match up, do not pay. Doing so will legitimize the claim, leaving you with no recourse and restarting the statute of limitations.
Your best defense here is to be vigilant about monitoring your financial health, paying down your debts, and watching for unscrupulous agencies that are more than happy to break the law to get you to pay.
