FCRA and reporting a balance on a settled account

[money_talks]

Where in the FCRA does it state that you cannot report a balance on a settled account? I would like to proactively remind Cap1 they would be violating the FCRA if they tell the CRAs to report the remaining balance.

I settled for less than full on a CO with the CA on a debt still being reported by Cap1 on my CR. I spoke with Cap1 and they are adamant that all they do is send the info that the account has been settled in less than full to the CRAs and it is up to each CRA on whether they report a balance or not. Cap1 Collections Manager insisted that a settled account only means that they are simply not actively collecting on the remaining amount, but the remaining balance still should be reported on the CR.

I'm really concerned now. Cap1 gives me a timeline of 22 days plus another 60-90 days for my CR to be updated to settled. I don't want to wait all that time only to find out that Cap1 sent the remaining balance to be reported. Then it will be a hassle to change it to a $0 balance.

[money_talks]

Update: I found a post by RobertEG that answers this question. See below.

But I have another question to this. What if Cap1 insists they only submit info that it was settled to the CRAs? What can I say or reference in the FCRA to Cap1 that the OC actually can send whatever they want to the CRAs to be reported? In this case, a $0 balance along with a settled notation?

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PIF-2-years-ago-but-still-showing-a-balance/t...

Your legal basis for requiring their update is FCRA 623(a)(2), which requires prompt update of any reported information that is necessary to reflect its current accuracy.

You might file that in your mind if they daudle, as it is not discretionary on thier part.

I would recommend first giving them an informal call, and reminding them of their statutory obligation.  You are correct that a formal dispute will temporarily block parts of your scoring, and the issue appears to be clear, so they will most likely simple promise to update in their next regular reporting.

If they dont comply within a reasonable time, I would then send a direct dispute rather than disputing via the CRA.  That will require them to either verify or correct within 30 days.  Unless they separately report the dispute to the CRA, the CRA will not even be aware of it, and you may avoid posting of a dispute flag.

[money_talks]

Your legal basis for requiring their update is FCRA 623(a)(2), which requires prompt update of any reported information that is necessary to reflect its current accuracy.

You might file that in your mind if they daudle, as it is not discretionary on thier part.

I would recommend first giving them an informal call, and reminding them of their statutory obligation.  You are correct that a formal dispute will temporarily block parts of your scoring, and the issue appears to be clear, so they will most likely simple promise to update in their next regular reporting.

If they dont comply within a reasonable time, I would then send a direct dispute rather than disputing via the CRA.  That will require them to either verify or correct within 30 days.  Unless they separately report the dispute to the CRA, the CRA will not even be aware of it, and you may avoid posting of a dispute flag.

[RobertEG]

The issue is the reporting of the current balance.

A satisfied debt, regardless of the amount they chose to accept as satisfaction of the debt, means there is no more debt.

The FCRA does not specficially state that a paid debt must be reported with a $0 balance, it states that they are required to promptly update ANY item previously reported in a manner necessary to reflect its current accuracy.  Section 623(a)(2) covers all reporting, without attempting to itemize all specific situations.

The assertion that paid debt = $0 balance is a fact in and of itself.

Unless they assert that the debt is not satisfied, they have an obligation under section 623(a)(2) to promptly update the current balance.