I'm working to become debt free and an old bank account that I had closed years back just reported a "charge-off."
So here is the information from my credit report (TransUnion) and the creditor;
Payment Status: Collection/Chargeoff
Account Status: Derogatory
Amount Past Due: $64
Account Type: Deposit related
Date Account Closed: Jul 01, 2017
Date Reported: Dec 01, 2017
Remarks: Charged off as bad debt. Profit and loss write-off.
After talking to the creditor via email, they stated the account went into a negative status Oct 2012, in which they charged 2x $32 insufficient funds fee for a transfer attempt. On Jan 11, 2018, they stated as a courtesy, they refunded those fees to the account. The account is still showing open to this day, even though it was reported as charged off. The balance prior to the "refund" was $64, so not appearing to be charged off. When asked if they can delete the reporting, they responded "We regret to inform you we are unable to remove the credit reporting and apologize for any inconvenience this may cause."
So some back story, this account was requested to be closed ~2010, but they have no record of. There were never any late or delinquent notices sent to me, or notice of charge off. They stated that I was enrolled in e-statements, and provided statements from 2012 showing the timeframe the transfer request/fee was incurred.
What are your suggestions for the next step? I've already asked if this issue could be elevated, since the "$64" was refunded, and therefore never charged off. I've also started a dispute with TransUnion. Any other action? I don't have faith in the dispute process, as I've had poor experiences in the past.
Is this a checking account?
Are they agreeing that the account was never delinquent, or that they have decided to now waive legitimate fees as a courtesy, in which case there would have been a delinquent debt, but they have cancelled it?
This is a savings account.
Here is their response as to removing the fees: "As a courtesy, we have refunded the two $32.00 Overdrawn ACH fees to your basic savings."
The two attempts at withdrawl were from PayPal. I'm unsure if it was a withdrawl that I mistakenly attempted or not, as PayPal history does not go back to 2012, nor does my memory in this case.
It appears that they are continuing to hold that there was a delinquent debt, but they granted a voluntary cancellation.
The fact that there is no longer a debt does not negate the fact that there was a debt that reached the stage of delinquency that led to it being charged-off. Thus, just as payment of the debt does not negate prior delinquencies, discharge of the debt by their discretionary cancellation of the debt does not require removal of the reported charge-off.
If the delinquency began in 10/2012, the reported charge-off must be excluded from your credit report no later than 4/2020.
The CRA will likely exclude in 10/2019.
If you feel that there was never a legit delinquency, then first file a dispute, compelling an investigation and verification of the accuracy.
You must first file and receive a decision on a dispute before you can file a civil action and seek resolution in the courts.
Ok, here is some more information to add... Pulled my 3B report. On this report it has this charge-off, but guess what else it has... A $250 line of credit, which was overdraft protection on that savings account... Guess what it says, closed at consumer's request... This is because I requested for my savings account to be closed before these 2 transactions ever happened. So I'm guessing that they closed the overdraft protection, but not the savings? If this line of credit was open at the time, there would have been no fees as it would have covered the overdraft. Also, they have now disabled my access to my online account.
One last thing... I got a response from a second person at this bank. How do you interpret this message;
In order remove the charged off status, please send a check deposit in the amount of $64.00 to eliminate the negative balance. A deposit can be applied to your account by mailing a check to:
So removing the charged off status would mean delete the entry on my report?
A charge off is an accounting measure taken by a creditor.
It can be reported to the CRAs as both the event itself under payment history and separately recorded as to its initial amount, and can also be reported as the current statutus in each monthly update up to the expiration of 7 years plus 180 days from the DOFD.
They can alternately, under CRA policy, report the delinquency as either, for example, 180+ days late, or as a charge-off, which by definition is a serious delinquency level plus their determination that the debt is unlikely to be paid.
If you pay the debt, the current status will thereafter no longer be one of delinquency, and thus they can no longer report the current status as being a charge-off. The current status becomes a non-delinquency status of paid for a closed account.
However, the recordation of the fact that it was also charged-off, while no longer the current status, is not removed from record in your credit report. It remains as a separately reported fact with a required exclusion no later than 7 years plus 180 days from the reported DOFD.
In summary, the charge-off will not be removed from your credit report by paying the debt. It just can no longer be reported as the current status is subsequent updates.
After a weeek of emailing back and forth, they've agreed to remove the tradeline! Victory!
Winner winner, chicken dinner!