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Collection Agency Switch

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Collection Agency Switch

I received a notification about 6 weeks ago that a collection had hit my credit history.  I never received any notification of the collection so I put in a complaint with the BBB against the collection agency.  The collection agency responded and said that they were sorry for the inconvenience blah blah blah and deleted the collection from all 3 bureaus.  Now I get a letter in the mail from a new collection agency trying to collect for the same debt.  Is that right?  Can the original creditor just continue selling the debt to another collection agency if the 1st one wasnt successful?

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1 REPLY 1
RobertEG
Legendary Contributor

Re: Collection Agency Switch

First, there is no requirement that a debt collector provide any prior notice to a consumer before reporting their collection to a CRA.

Reporting triggers their requirement to send dunning notice within 5 days thereafter.

Thus, there is no violation on their part, and their deletion was totally voluntary.

 

Second, the reporting of a collection does not necessarily mean the OC has sold the debt.  The debt collector may be only an assigned agent of the OC.

One purpose of dunning notice is that it requires identification of the party who now owns the debt, and thus who they are collecting for.

If the debt collector does not own the debt, their reporting represents only the amount they are authorized to attempt to collect, not ownership of the debt.

 

A new debt colector can report at any time they acquire collection authority, either by way of assignment from the current owner of the debt, or by purchase of the debt.

CRA policy is that a prior debt collector whose authority has been terminated should delete their reporting if the debt was unpaid.

 

The reporting of continued collection by a new debt collector is proper provided they have collection authoity.

 

 

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