Paying of the debt to the creditor is not the act that triggers any requirement to delete a collection that has been reported on the debt.
What triggers a requirement to delete a collection is if the debt collector has their collection authority terminated prior to the payment of the debt to the creditor.
If the debt collector had legitimate collection authority at time of payment of the debt, they can report their collection for the first time, resinsert if they voluntarily did some sort of temp removal, or refuse to delete if it was reported prior to the payment of the debt.
The issue is whether they had legitimate collection assignment at time of discharge of the debt.
Deletion based on termination of collection authority on an unpaid debt is not mandated under the FCRA. It is purely CRA reporting policy, and is based on prevention of simultaneous reporting of two collections on the same debt.
If a first debt collector has their collection authority terminated prior to discharge of the debt, the owner could immediately assign colleciton authority to another debt collector, who could then report their collection to the CRA, with the possible result of two collections simultaneously included in the consumer's credit report on the same debt.
No such issue is present if the debt is paid while a first debt collector still has legitimate collection authority, as payment of the debt then terminates any subsequent assignment to a new debt collection.
CRA policy clearly instructs debt collectors not to delete based on payment of the debt, regardless of who accepts the payment.
