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I would assume that since your sister was a minor at the time, she was not legally responsible to the creditor. As such, I would tend to agree that reporting her as a responsible consumer for collection of a debt that was not legally hers would not be appropriate. It appears that the reporting should be restricted to your parents' CR.
If the OC has also posted to her CR, I would begin with a direct dispute addressed to them for incorrect credit reporting. I would also send a direct dispute to the debt collector, disputing their collection reporting on the grounds that the debt they are attempting to collect was not hers.