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Established Member
oj1963
Posts: 22
Registered: ‎05-15-2009

Collection Agency reporting as Factoring Company - Is this legal?

My credit reports are pretty similar accept Equifax is about 120 points lower. The biggest difference I see is Equifax list 3 colleciton accounts around 2 yrs old as open accounts on the cr alongside my car and credit card accounts. On TU and EX these accounts are listed under collections. When you look at accounts past due on TU and EX it says 0; on Equifax it says 3 - these 3 collection accounts: AAC, Midlands, and Palisades. Can they list these collection accounts along with normal lender accounts and also list them as >120days late?  They are listed as Factoring Company - but my understanding that these companies are collection companies and cannot be listed as Factoring company's and must be reported under collection accounts?
Established Contributor
JoeBJay20
Posts: 795
Registered: ‎04-13-2009

Re: Collection Agency reporting as Factoring Company - Is this legal?

By definition no they aren't factoring accounts, factoring account companies buy debts that are current.  It does appear to be consensus opinion that FICO scores them as collection accounts regardless.  However, the real violation is the reporting of lates, which no CA has the legal authority to do, and is a gross violation of federal law. 
Valued Contributor
nothingman02
Posts: 1,072
Registered: ‎02-15-2009

Re: Collection Agency reporting as Factoring Company - Is this legal?

AAC is a factoring company and also  JDB. But in your case, what kind of debt is it? If its a charged off debt, then Asset is a CA/JDB and can not list it as a factored debt. Thats a willfu l violation.
Mega Contributor
RobertEG
Posts: 17,456
Registered: ‎03-19-2007

Re: Collection Agency reporting as Factoring Company - Is this legal?

The FDCPA does not use the term "colletion agency."  It uses the term "debt collector" as defined in FDCPA 803(6).

It is any person or business the principal purpose of which is collection of any debt directly or indirectly owed or due on assets asserted to be owed or due to another.

A factoring company buys accounts receivable from an OC, and thus owns the debt, and collect on it. I see no reason why they would not be a legal debt collector under the FDCPA.

Established Member
oj1963
Posts: 22
Registered: ‎05-15-2009

Re: Collection Agency reporting as Factoring Company - Is this legal?

AAC/ MIDLANDS / Palisades is collecting for a old credit card / small signature loan / car repo 6 1/2 yrs ago.    In CURRENT STATUS: Collection Account  TYPE OF LOAN: FACTORING COMPANY   COMMENTS: Collection Account   >120Days Late

 

So is it a collection account or Factoring company? And does it make a difference in score.  I have read it does because they can list themselves as an account and does not age as a collection account does.  And I see that happening, EQUIFAX is over 100 points lower that TU and EX and the only difference I see is the Factoring Company and these accounts are showing up as recently deliquent status ONLY on equifax.  TU and EX show no deliquent accounts even with these 3 collection accounts.

Valued Contributor
nothingman02
Posts: 1,072
Registered: ‎02-15-2009

Re: Collection Agency reporting as Factoring Company - Is this legal?


RobertEG wrote:

The FDCPA does not use the term "colletion agency."  It uses the term "debt collector" as defined in FDCPA 803(6).

It is any person or business the principal purpose of which is collection of any debt directly or indirectly owed or due on assets asserted to be owed or due to another.

A factoring company buys accounts receivable from an OC, and thus owns the debt, and collect on it. I see no reason why they would not be a legal debt collector under the FDCPA.


Theres a distinction. FDCPA does not apply to OCs. Factoring companies are OCs. CA/JDBs are not. You have to look at third party debt collectors.

They can lie and get away with CRAs, BBB etc but certainly not in court. 

Its an absolute violation. 

 

 

Valued Member
dmanos
Posts: 37
Registered: ‎03-02-2010

Re: Collection Agency reporting as Factoring Company - Is this legal?

Apologizing for digging up an old thread but I thought it would be better than starting a new one.

 

I have a CA reporting as a factoring company and it shows up as an open account on my CRs.  When I pull from myFico it factors this balance in as open revolving debt and affects my DTI ratio.  Depending on where I pull from it is also showing as 120+ days late.  I have never DV'd or PFD'd this account.  Like many folks I had a tendency to ignore this until recently.  Additionally, it appears to me as if the CA has added a substantial amount to the original debt. 

 

 

 

How the CA is reporting:

 

B B NCO FIN/22

2XXXXXXX

Date Reported-03/10

Date Opened-04/08

DLA-08/05

$435

OPEN

$895

001 $895

$895 12 0 0 0 O9

XP

 

FACTORING COMPANY; ORIGINAL CREDITOR: NCO/ASGNE OF CAPITAL ONE

 

/TU/EF

 

 

 

Original Creditor TL from the same report:

 

B B CAP ONE

XXXXXXXXXX

Date Reported-05/08

Date Opened-02/04

DLA-06/05

$400

REV

$0

$0

$0 52 3 3 7 R9

XPTRANSFERRED TO ANOTHER LENDER; PURCHASED BY ANOTHER LENDER

 

XP/TU 

 

 

 

 

Any advice on how best to handle this situation?  Thanks in advance!!


Starting Score: 03/08/2010 612-EQ 602-TU
Current Score: 03/27/2010 624-EQ 641-TU
Goal Score: 700+


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Valued Contributor
mauve
Posts: 2,487
Registered: ‎02-18-2010

Re: Collection Agency reporting as Factoring Company - Is this legal?

NCO was on my CR as an open TL with negatives as well.  In my circumstances, I had a positive result with a DV (and only a DV), but it seems like every time I hear about NCO reporting, it's as an open account instead of as a collection, and with delinquencies.


Starting Score: EQ 583 TU04 619 EX 592 (lender pull) 2010
Previous High Score: EQ 700 TU04 712 EX 726
Current Score: EQ 740 TU(Discover) 750 EX(AMEX) 747
Goal Score: 740+ all around


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Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Collection Agency reporting as Factoring Company - Is this legal?

[ Edited ]

RobertEG wrote:

The FDCPA does not use the term "colletion agency."  It uses the term "debt collector" as defined in FDCPA 803(6).

It is any person or business the principal purpose of which is collection of any debt directly or indirectly owed or due on assets asserted to be owed or due to another.

A factoring company buys accounts receivable from an OC, and thus owns the debt, and collect on it. I see no reason why they would not be a legal debt collector under the FDCPA.


Because by definition a factoring company does not buy debts that are in default.  They buy current debt in good standing to give the OC some fast upfront cash.   A CA is not a factoring company no matter how you or they look at it.  A factoring company is NOT a debt collector.  When they buy the account they become the OC.  When a CA buys the debt, they are still a CA. 

 

CAs think by listing themselves as a factoring company it excludes them from the FDCPA, which it does not.

Valued Member
dmanos
Posts: 37
Registered: ‎03-02-2010

Re: Collection Agency reporting as Factoring Company - Is this legal?


guiness56 wrote:
CAs think by listing themselves as a factoring company it excludes them from the FDCPA, which it does not.

 

Aren't their actions of reporting the collection as an open account and 120+days late a violation of some sorts?

 


Starting Score: 03/08/2010 612-EQ 602-TU
Current Score: 03/27/2010 624-EQ 641-TU
Goal Score: 700+


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