What are reasons to dispute a paid collection account?

[pierce83]

I gave up on getting Alliance One to agree to a PFD after SEVERAL attempts.   I paid my bill through the OC online.   That has been 30 days ago and it hasn't been updated yet on my credit report.  How can I go about getting this deleted?  Should I try a GW letter to Alliance One first or do I have any reason to dispute?  Thank you so much.  My credit score is 578 and I really do want to get it up.

[llecs]

Only dispute items that you positively know are not yours and/or are incorrectly reporting. If paid to the OC, the CA can still report but they must soon report a paid balance (or decide to delete on their own). If I had that I would not dispute. I'd GW to the CA. A dispute will sometimes make a GW harder to obtain. You wouldn't want that CA to update as paid.

[RobertEG]

+1

When a debt collector reports a collection, they are reporting the fact that they have authority to collect on the debt, either as an assinged agent of the OC, or as the current owner of the debt.  Subsequent payment of the debt, regardless of who payment is made, does not negate the fact that they were collecting on the debt.

The statutory requirement is that the debt collector must promptly update the balance under collection to $0, and close their collection.

There is no requiement under the FCRA for deletion of the collection, and CRA policy instructs all furnishers not to delete based on payment of the debt.

Thus, a dispute via the CRA would be for a reason contrary to their written policy.

The only time a debt collector is instructed to delete their collection is if their collection authority was terminated prior to payment of the debt.

That is not a requirement of the FCRA, but rather the policy of the CRAs in order to prevent the showing of multiple collections on the same debt, which could occur should a new debt collector report after termination of the prior collection.

Requests for deletion should be made as a good will request to the debt collector.  If you are on good terms with the OC, you might contact them and request they contact the debt collector on your behalf, and use their influence to ask the debt collector to delete.

[AeroKrix]

---

@pierce83 wrote:

I gave up on getting Alliance One to agree to a PFD after SEVERAL attempts.   I paid my bill through the OC online.   That has been 30 days ago and it hasn't been updated yet on my credit report.  How can I go about getting this deleted?  Should I try a GW letter to Alliance One first or do I have any reason to dispute?  Thank you so much.  My credit score is 578 and I really do want to get it up.

---

I am assuming you didn't get your agreement in writing prior to payment. I had this issue once. I threatened the CA that I would dispute the charge through my credit card company and once the payment is credited back to my CC, I will require a PFD agreement in writing before paying them a dime. this is a YMMV kinda thing. Some CA's are responsive to threats and some are not. A good tool to use is BBB, and submit a formal complaint against the company. 

Also, IME, sometimes it does take a few weeks to a month or so for the account to be removed. It all depends on how the CA will report it or lack thereof. Some CA's do a batch type reporting, where they report all their accounts at the same time on a specific day. So if you paid off your CA on the 1st and they agreed to delete it, they might not send out the request till the end of the month, and it might take the CRA a few days, weeks, or a month to update the tradeline.

[AndySoCal]

Do you know if the debt was sold to the collection agency or assigned to the collection agency? The original creditor could tell you if you do not have the informatrion.

[takeshi74]

---

@AeroKrix wrote:

I am assuming you didn't get your agreement in writing prior to payment. I had this issue once.

---

To me the OP reads that a PFD could not be negotiated so the collection was paid but has not been reported as paid.

[RobertEG]

+1

Disputes are limited to the accuracy or completeness of the identified information.

Most dispute to attempt to get a collection deleted, but other disputes can relate only to the accuracy of specific information reported under the collection.

Regarding disputes asseting required deletion, there is no provision under the FCRA addressing any requirement to delete based on payment of the debt.

The CRAs have two different reporting policies, one relating to payment after the debt collector's authority has been terminated, and the other related to payment while the debt collector still has authority.

The CRA reporting manual instructs debt collectors to delete their collection if their authoriity is terminated prior to satisfaction of the debt.  That includes termination by the creditor, if assigned, or sale of the debt, if they own it.  That instruction is indtended to prevent multiple collections in a consumer credit report on the same debt.

The baisis for disputing would be adminiistrative policy of the CRAm not a statutory requirement.

The CRA reporting manual insructs any furnisher not to delete reporting based on payment of the debt, and thus there is no supportable statutory or administraricw basis for dispute asserting deletion of the collection if the debt collector still had active collection authority when the debt was paid, regardless of whether the debt was paid through the debt collector or the OC.

Disputes pertaining to the accuracy of individual items under a eported collection are a different anuimal, and dont go to deletion of the collection, but rather only to correction of that item of information.  FCRA 623(a)(2) requires any furnisher to promptly update prior reporting when necessary to maintain its current accuracy, which includes prompt update to $0 balance under collection, and closing of the collection, once paid, regardless of whom payment is made through.

Agreements to delete based on payment are covered as private contracts with the furnisher, not under the FCRA.

Disputing such an issue with the CRA is problematic, as you are in fact asking them to delete for a reason directly contrary to their writtne policy.