After years of working to clean up my credit, I am finally down to just one baddie on my TU and EX report... Midland. They bought my debt from a 5.5 year old credit card chargeoff and although I could live having a collection on my CR, it is the way that they are reporting it that is causing me so much aggrevation. On both of my reports, they are listing the account as an Installment account with one month terms and every month they update the account as past due. For the past year, I had been getting monthly alerts from CK and CS saying that "I have become delinquent on one of my accounts" but when I logged on I could never see any new delinquency. Well, it turns out that by reporting this as an installment and updating it monthly as newly past due, it makes it appear to any creditors as though I have just recently become delinquent on an installment loan.
A couple of months ago, I applied for the Chase Freedom figuring that would be an no-brainer easy card to get (I have a 789 EQ FICO, three prime cards with 16K, 20K, and 25K lines that have always been paid in full and on time, income of $240K, and my house and cars are all paid off). Much to my surprise, I got the 7-10 day message. I called the recon line right away and spoke with the analyst who said that I was declined because it appeared to Chase that I had just become delinquent on a loan from Midland within the past few days. I explained the situation that the Midland account was nearly 6 years old but she said that the only date that she can see on her report is the most recent delinquency date, which was several days prior. I spoke with with her supervisor and got the same reply. He said that the only way they could approve me was if I got Midland to change the way they were reporting the collection so that it didn't appear as a recent delinquency.
So, after reading others advice on the forums here, I put together the following direct dispute letter and sent it to Midland:
--------------------------------
This is a Notice of Direct Dispute with Midland Funding, under the provisions of FCRA §623(a)(8)(D), concerning the accuracy of the information you have reported to my credit file.
In compliance with FCRA §623(a)(8)(D), and enacting regulations published at 16 CFR § 660.4, this Notice of Direct dispute includes:
Identification of the specific information being disputed:
Midland Funding, as shown on my Experian credit report (attached), Account #XXXX is showing incorrect information.
Basis for the dispute:
1. The type of account is listed as "Installment". Please remove this incorrect information. Midland is not a creditor and I have never entered an installment account or agreement with the company.
2. The account status is shown as “Past Due”. Please delete this incorrect information. Midland is not a creditor and therefore cannot report an account as past due or current.
3. The "Recent Balance" Midland has most recently reported is $7,073.00 and the account is listed as "seriously past due". Please remove this incorrect information. There is no payment history to report as Midland is not a creditor.
4. Terms are listed as 1 month. Please remove this incorrect information. I have no terms or installment agreement with Midland as Midland is not a creditor.
5. The Payment status is listed incorrectly as past due, as of May 2014. Please remove this incorrect information. I have no terms or installment agreement with Midland as Midland is not a creditor.
Supporting evidence:
A party who purchases a debt that is in default for the sole purpose of collecting the debt is not a creditor - FDCPA 803(4). Midland Funding is not my creditor. I have attached a copy of my credit report showing the incorrect information being reported.
Under the provisions of FCRA §623(a)(8)(E) and 16 CFR §660.4, Midland has the duty to review all of the information I have provided and to complete your investigation of this Direct Dispute within 30-days of my Notice of Direct Dispute, and report directly back to me the results of your investigation within 5-days of your completion of your investigation.
Should you find the disputed information to be inaccurate or incomplete, or if you cannot verify the accuracy or completeness of the disputed information, you are additionally required, under FCRA 623((1)(E), to promptly notify the credit reporting agencies of deletion of this information from my credit file.
--------------------------------
A few weeks later, I received a generic letter back from Midland saying that they can't process my dispute because they need more documentation. They asked for either a statement showing that the balance had been paid in full, a police report showing that I was a victim of fraud or identity theft, or a statement showing that there was a balance discrepency. Needless to say, they clearly didn't even bother reading my disupte letter. After receiving that, I filed the following complaint with the CFPB:
--------------------------------
Midland Funding is incorrectly reporting a collection account on my Experian and Transunion credit reports as an "Installment" account. I have never entered into any installment agreement with Midland Funding or any of its associates. They are updating this account monthly as "past due" so as to cause a greater negative impact to my credit score. Because of the way they are incorrectly reporting this account, it appears to any other creditors that I have recently become late on an installment loan when, in fact, I have not been late on or missed any payments with any creditors in nearly six years. This has caused me to be denied credit when I should have otherwise been approved.
I sent a direct dispute to Midland Funding on June 9th, 2014 (attached) specifying that they were incorrectly reporting a collection account as an installment loan and requesting that they correct the information. They replied on June 20th, 2014, stating that they were "unable to determine the nature of my dispute, and consequently deny that their records are inaccurate." As you can see from my attached letter to Midland, I was very specific in my direct dispute, citing every error that was being reported. Midland's response makes me believe that they did not even bother reading my letter or following up on any of my claims.
Specifically, Midland may not list this account as an installment account, as they are not a creditor and I have never entered into any installment agreement with them Midland also may not show the account as "Past Due" as they are not a creditor and may not list an account as past due or current. Midland also may not report a recent payment history as they are not a creditor. Midland also may not list the terms of the account as "1 Month", as I have no terms or installment agreement with Midland. Finally, Midland may not report my payment status as "Past Due" as of May 2014 as Midland is not a creditor and I do not have any installment agreement with Midland.
Due to the manner in which Midland is incorrectly reporting this account, they are in violation of 15 USC 1692e(2)(A), 15 USC 1692e(8), 15 USC 1692e(10), and 15 USC 1692f.
--------------------------------
Today, I received a notice from the CFPB that my case has been closed with explanation after they received the following reply from Midland:
--------------------------------
Mr. XXX, you express concern whether Midland Credit is accurately reporting the above-referenced account to the credit reporting agencies. For purposes of credit reporting, the term "Open (Portfolio Type)" has the following definition: "Accounts where the entire amount is due upon demand or that have one payment due as scheduled (i.e., Terms Duration = 001)." That indicates that the account is currently open, due and owing in one payment. Midland Credit has been advised, and the standard in the industry is that as a debt buyer, it should report accounts as: current status - collection account; type of account - open; type of loan - factoring company account; additional information - collection account. Further, E-Oscar, the online credit reporting system, provides the following definition of a factoring company: "Factoring Company - A company that purchases accounts with the intent of collecting debts owed." Midland Credit has been advised by two credit reporting agencies that it should be classified as a factoring company for credit reporting purposes.
Additionally, although Midland Credit submits updates to the reporting agencies each month, Midland Credit does not report accounts as "Past Due" to the credit reporting agencies. Depending on the current condition of a given account, Midland Credit will report that account as either "Account assigned to internal or external collections", or "Account paid in full, was a collection account." Midland Credit's business records indicate that it is appropriately reporting the above-referenced account to the three major credit reporting agencies.
You are encouraged to communicate directly with the credit bureaus should you have any further concerns about the nomenclature that Midland Credit is compelled to use in credit bureau reporting. Midland Credit has no control over said nomenclature assigned, and based on the law and guidelines governing credit reporting, it would appear that the account is being correctly reported. In addition, if you obtained your credit report from a compilation source, the information being reported may appear to vary. The credit bureaus have advised that it appears this way because they do not directly populate the fields on credit reports pulled from any source other than directly from the credit bureau itself.
If you are ready to settle the above-referenced debt, you may qualify for a reduction in your account balance. Please see Midland Credit's comprehensive response letter, which is attached, for additional information.
--------------------------------
So, I have the option to dispute the reply from Midland but, before I do, I want to make sure I have all my ducks in a row. Surely it can't be the norm for a debt-buyer/collection company to report an old collection as a installment account with a recent delinquency. Can anyone point me towards any statute or precendent that specifically says that this would be improper? The statutes I quoted in my letter are a bit more generic, basically saying that a collection company can't mis-report anything or falsely represent the character of any debt. Sorry for the lenghty post, but I wanted to provide as much information as possible. I am just befuddled that it apperas to be okay for a CA to report something in a manner that would keep someone with a high FICO score, a perfect 5.5 year payment history, a paid off mortgage/car loans, and a high income from obtaining any new credit. Thank you in advance for any advise/help!
